Reform drama

White House wants action, Congress prefers slow motion<@VM>Inside the report

Angela Styles, administrator of OMB's Office of Federal Procurement Policy, plans to implement the recommendations of the Commercial Activities Panel.

The White House intends to act quickly on recommendations by a high-level government panel that call for sweeping changes in conducting public-private competitions. But Congress could slow implementation of some of the planned reforms until it has a chance to review administration proposals and put its own stamp on the new rules.

Angela Styles, administrator of the Office of Management and Budget's Office of Federal Procurement Policy, told Washington Technology she will implement recommendations by the Commercial Activities Panel, which filed its report April 30.

The panel said rules on public-private competitions in OMB Circular A-76 should be jettisoned in favor of a new "integrated competition process" based on existing federal acquisition regulations, known as the FAR.

A hearing is set for June 20 before the House Government Reform subcommittee on technology and procurement policy, chaired by Rep. Tom Davis, R-Va., to review the panel recommendations.

"In reviewing them, any possible need for legislative implementation would be discussed," said David Marin, Davis' spokesman. "We believe a majority of the [panel's] recommendations could be implemented administratively, if there were consensus between the administration and Congress that that would be a good thing."

The panel, chaired by David Walker, U.S. comptroller general, also recommended the federal government create "high-performing organizations" that are rewarded for improving operations even without the spur of direct competition from the private sector.

Styles said a group of volunteers from a variety of federal agencies is already coming together to address changes that can be made, as well as to begin laying the groundwork for a new process.

NASA Administrator Sean O'Keefe, who served as deputy director of OMB until his current appointment in December 2001, has already expressed interest in some of his staff working on the changes, Styles said. There also are discussions under way with other agencies and the Defense Department about personnel.

The Bush administration hopes this approach for deciding who should provide government services ? the private sector or public agencies ? will garner more widespread support than the A-76 process.

"There has been something of a fundamental shift in this administration, as opposed to previous [Republican] administrations that have dealt with this," Styles said. "We recognize that the public sector ... oftentimes can perform as well as or better than the private sector. [The] A-76 from the 1950s built in the presumption that the private sector can [always] do better."

The White House intends over time to implement all four recommendations of the Commercial Activities Panel for improving the government's sourcing conditions, Styles said. The panel, mandated by Congress in 2001, was comprised of a dozen individuals from the federal government, unions, academia and industry.

However, only one recommendation, a list of 10 sourcing principles, was unanimously adopted by the panel. These principles said, for example, that procurement practices should recognize that inherently governmental functions should be performed by federal workers, and that when competitions between the public and private sectors are held, they should be conducted as fairly as possible and consider both quality and cost.

The other three recommendations were approved in a block vote by a two-thirds majority, but were opposed by four panelists. Among these recommendations, the panel called for adopting the new integrated competition process and encouraging high-performance organizations within government.

Although the union representatives don't like the A-76 process, they also oppose any new process that doesn't track a contractor's performance in a manner comparable to in-house government workers.

"Contractors can't win regularly when they compete on the basis of costs," said Bobby Harnage Sr., national president of the American Federation of Government Employees and a panel member.

Harnage said the recommended process based on the FAR does not improve efficiency, it merely changes the rules of the game. Contractors, he said, "want to replace the current system with a subjective one that encourages agencies to make award decisions on the basis of projections and expectations, thereby significantly increasing the role of bias and politics."

"It seems a little disingenuous for panelists to give lip service to cost and efficiency and not take actions to require contractors to track costs," said Gary Storrs, a labor economist with the American Federation of State, County and Municipal Employees, who testified at one of the three public hearings held by the panel. "The majority wanted some kind of dictum that competition should be the norm in government service."

Storrs said there are some things in the panel's report his organization "could support conceptually, but not [if they] didn't put a higher requirement on tracking contractors costs."

The challenge is to structure a level playing field where both sides private industry and government employees ? believe they are being evaluated fairly, he said.

Despite union opposition, Walker told Washington Technology, the administration should move expeditiously "to implement all the items they have the discretionary authority to do so within current law."

OMB can adopt procurement rules incorporating the panel's recommendations, since it already has regulatory authority over the A-76 process itself, he said.

The key is "for OMB to make sure, in using their discretionary authority, that their actions are consistent with the principles that were adopted unanimously," Walker said.

Chip Mather, a principal with Acquisition Solutions Inc., a Chantilly, Va., firm specializing in consulting on acquisition processes, praised the panel's report but said he expects the recommendations to be worked over by Congress and other interested parties.

"Everybody's going to get their hands on this," he said. "I think that's why A-76 looked the way it did, because it was designed by a committee."

Paul Lombardi, president and chief executive officer of DynCorp, a Reston, Va., systems integrator, and chairman of the Professional Services Council, said many lawmakers seem to be lining up to interfere with the proposed changes.

"If for any reason they are blocked by legislation, that's going in the wrong direction," Lombardi said. "The worst thing that could happen is nothing. ... It wouldn't surprise me to see them stonewalled."

One bill supported by the unions is the Truthfulness, Responsibility and Accountability in Contracting Act, legislation introduced by Rep. Albert Wynn, D-Md., which would temporarily freeze government outsourcing until agencies can better track the cost savings generated by the outside contractors.

The interested parties all have their own motives, Lombardi said. Lawmakers are in it for the votes, unions are in it for the dues, and business is in it for competition and the profit motive.

"It isn't a matter of right or wrong. It's politics," Lombardi said.

Walker said if Congress decides to weigh in on this issue, it should "make sure, to the extent it legislates in this area, that it is consistent with the 10 principles."

Walker also has great hopes that the notion of high-performance organizations within government would take hold.

"One of the frustrations for me and others [is that] whoever wins a public-private competition, there's always 20 percent to 30 percent savings," Walker said. Savings of that magnitude can be realized not just in those areas subject to competition, but also in those that will never face competition from outside contractors because they are inherently governmental in nature.

"It's a very worthwhile concept," he said, regarding high-performance operations, "and I think we ought to try very hard to make it a reality."

Staff Writer Patience Wait can be reached at pwait@postnewsweektech.com.The Commercial Activities Panel report, "Improving the Sourcing Decisions of the Government," made four recommendations for improving the government's sourcing process.

The panel unanimously approved 10 "sourcing
principles," which state that decisions should:



  • Support agency missions, goals and objectives;

  • Be consistent with practices designed to attract, motivate, retain and reward a high-performing federal work force;

  • Recognize that inherently governmental and certain other functions should be performed by federal workers;

  • Create incentives and processes to foster high-performing, efficient and effective organizations throughout the federal government;

  • Be based on a clear, transparent and consistently applied process;

  • Avoid arbitrary full-time or numerical goals;

  • Establish a process that, for activities performed by either the public or the private sector, would permit public and private sources to compete for work performed in-house, contracted to the private sector and for new work;

  • Ensure competitions are conducted fairly, effectively and efficiently;

  • Ensure competitions consider quality and cost;

  • Provide accountability in all sourcing decisions.



Two-thirds of the panel recommended:

  • All parties would be better served by conducting public-private competitions under the framework of the Federal Acquisition Regulation, a so-called "integrated competition process," while using appropriate elements of the current A-76 process.

  • Modifying some of the existing A-76 processes, because it will take time for the integrated competition process to be implemented.

  • That "the government take steps to encourage high-performing organizations ... and continuous improvement throughout the federal government, independent of the use of public-private competitions."


  • The full report can be found at www.gao.gov.

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