Senators press OMB nominee on contracting reforms

Senators questioned Jacob Lew, President Barack Obama’s nominee to head the Office of Management and Budget, at his confirmation hearing on Sept. 16 about government’s performance management, the acquisition workforce and other contracting reforms, including the controversial proposed High Road preference.

Sen. Susan Collins (R-Maine), ranking member of the Homeland Security and Governmental Affairs Committee, pushed Lew, to promise he would not approve a contracting policy such as the High Road labor preference, but Lew refused to commit. Lew said he knew too little about the policy to commit.

The High Road preference would require acquisition officials to give advantages in awarding contracts to companies that adopt labor practices beyond those currently required by federal labor laws, such as paying more than minimally required for certain jobs.

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Lew said such a policy considers two sides of procurement: Competition for contracts and the protections for employees in the workplace.

Collins reiterated her concerns for the "dramatic," governmentwide procurement policy. She said the policy would hurt small companies in competing for federal work, increase the costs of contracts, and “jeopardize the integrity of the federal procurement system.”

Moreover, the policy would be contrary to statutes regarding contracts, including the Competition in Contracting Act.

Lew also fielded questions on other issues. Regarding the acquisition workforce, he said federal agencies are “woefully understaffed” with contract specialists. Large contracts are easier to manage and if agencies break large contracts down to smaller contracts to create bites for small businesses, the workforce would face a much larger workload.

“They’re going to need some help,” Lew said, referring to small businesses.

He was also asked about measuring agencies’ performance.

As OMB director, Lew said his challenge would be to not let the budget side of the agency dominate his time, but to work on the most important priorities to make the government run better. When Lew was at OMB during the Clinton administration, officials were setting up new performance management programs under the Government Performance and Results Act.

“I think it’s still coming of age,” he said.

Early on, agencies worried about funding cuts if a program’s performance was found to be weak. He said it should not be that way. Instead, programs that are centered on core priorities need to shift their resources toward new ways to reach the goals, not automatically lose money.

“I think that’s a culture change. If agencies fear that an honest assessment means they’ll lose money, we’ll never get honest assessments,” he said.

Several senators said they would support Lew’s nomination for OMB director. Sen. Joe Lieberman (I-Conn.), the committee chairman, said the panel might vote on Lew's nomination next week.