GAO panel recommends ending A-76 process

A panel of federal, academic, union and business representatives recommended April 30 that the government replace the A-76 process for public-private competitions with a new competitive process based largely on existing Federal Acquisition Regulations.

The Commercial Activities Panel, mandated by Congress in 2001 and chaired by David Walker, U.S. comptroller general, concluded that the existing process, based on rules set out in the Office of Management and Budget Circular A-76, "has been stretched beyond its original purpose, which was to determine the low-cost provider of a defined set of services."

The panel concluded that in an era of rapid technological infusion into almost every aspect of government, A-76 procedures focus on cost savings to the detriment of considering long-term benefits and non-cost factors.

"A-76 doesn't work, it's not trusted by anybody, and it's a process for another era," said Stan Soloway, president of the Professional Services Council and a member of the panel. "FAR has been in place for decades, it matches procurement to requirement, and it requires you to treat bidders equally, with the same responsibilities and rights ? which A-76 doesn't have, by design."

The goal of treating all parties involved fairly served as the starting premise of the panel's work, said Gary Engebretson, president of the Contract Services Association of America, a trade association representing companies that contract their services to the government.

"This premise of fairness has led to the unanimous, and I stress, unanimous, adoption of ten fundamental principles that deal with the overall issues of people, performance and fairness itself," Engebretson said. "The matter then became, 'How to implement these goals?' And this has led to a logical result: replacing A-76 with a FAR-based process that is proven, tested, fair, accountable, and allows for 'best value.'"

The panel presented four recommendations. The first recommendation, which was unanimously approved, outlined 10 principles to be used in designing a new competitive mechanism. The principles cover such requirements as recognizing that inherently governmental functions should be performed by federal workers, and creating incentives and processes to foster high-performing, efficient and effective organizations throughout the government.

The remaining three recommendations were not approved unanimously, but earned the needed two-thirds "supermajority" to be passed. They included putting an end to the existing A-76 system and replacing it with what the panel termed an "integrated competition process;" modifying the A-76 process on an interim basis while a new procedure is created; and establishing the means to identify and reward "high-performing organizations." The panel's report does not describe what is a high-performing organization.

Included in the report are statements by each of the panel members, making clear those areas where they support or disagree with the entire group's recommendations.

Stephen Goldsmith, senior vice president of Affiliated Computer Services Inc., Dallas, and former mayor of Indianapolis, said the panel's report "is too cautious."

"The need to make sure that changes work well caused the panel to spend too much time on what could go wrong and how to guard against it. The resulting recommendations then, though good, appear tentative," he wrote.

On the other side of the argument, Bobby Harnage, national president of the American Federation of Government Employees, also a panelist, expressed serious disappointment in the report's recommendations.

"The recommendations in the report, if implemented, would do absolutely nothing to improve outsourcing policies, accountability to taxpayers, or the government's human capital crisis," he wrote. "Much worse, these recommendations would actually increase the potential for politics, conflicts of interest, as well as Enron-style waste, fraud and abuse in government sourcing."

The report has been forwarded to the Senate and House of Representatives for consideration.

A copy of the report can be found at www.gao.gov.