Unions, industry seek changes to new A-76 rules

Industry and union representatives called for changes to the new rules for public-private competition of federal work at a hearing today before the House Government Reform committee.

Rep. Tom Davis, chairman of the committee, responded by asking union leaders to submit to the committee their proposed rewrites to the circular.

Davis told Bobby Harnage, national president of the American Federation of Government Employees, that the committee could influence the regulatory process to change the new Office of Management and Budget Circular A-76, which sets out the competition rules. Davis said later, however, that the committee was gathering information about the new circular, and had no immediate plans to pursue changes to it.

"We can legislate, but the process is burdensome ? I don't think there is reason to be real optimistic from where you sit, given the current alignment [of Congress]," Davis told Harnage. "However, we can influence the regulatory process in a fairly significant way, and I'm happy to do that. I want to get a fair understanding because I don't think there is any question that competitive sourcing is a management tool that should and can be utilized and be helpful in many instances."

The problems with the new circular identified by the National Treasury Employees Union make the new policy worse than the old one, said Colleen Kelley, national president.

"We are asking this committee to block its implementation until these problems can be addressed," she said.

Industry groups, on the other hand, testified that the new circular was an improvement over the old one, which was criticized as unfair, time consuming and hard to understand. They did ask for some changes, however.

The Professional Services Council asked that the circular be changed to allow all agencies to make acquisition decisions based on "best value" rather than lowest cost, Currently, the use of best value is limited to information technology work, contracted commercial activities, expanded work and new work. In addition, the Defense Department is prevented by statue from considering anything but lowest cost in its A-76 competitions. PSC also asked for elimination of the requirement that cost be at least 50 percent of a best-value decision.

"It is easy to conceive of circumstances in which cost, while clearly an important evaluation factor, does not make up 50 percent of the overall source selection criteria. By imposing this arbitrary 50 percent requirement, the administration is thus significantly limiting the ability of agency procurement officials to make smart business decisions," said PSC President Stan Soloway.

Kelley and Harnage complained about the "streamlined" competition process in the new circular, as well as the circular's use of the term "substantial discretion" to define jobs classified as inherently governmental, and thus not subject to competition.

AFGE and NTEU argued that a more restrictive definition of what is inherently governmental will open up more jobs to competition ? jobs that should be restricted to the public sector. NTEU, in fact, has filed a lawsuit seeking a halt to implementation of the circular because of the more restrictive definition.

Angela Styles, administrator of the Office of Federal Procurement Policy, testified that because the term "substantial discretion" has been contained in OMB policy since 1992, the administration does not believe it represents a major policy change. Rather, the choice of "substantial discretion" instead of "discretion" eliminates apparent conflicts in OMB guidance, she said.

The streamlined competition process ? to be used for competition of 65 or fewer jobs ? would not allow agencies enough time to develop a competitive bid, the unions said. Streamlined competitions are to be conducted in 90 days.

"Streamlined studies are nothing more than sugar-coated direct conversions, in which federal jobs are transferred to contractors without first giving federal employees an opportunity to put forth a competitive proposal," Kelley said.

Davis said he thought Styles, who led the team rewriting the circular, "has taken a good stab at it."

"I would have hoped we'd have more consensus," he added.