New A-76 rules under attack

"We knew it would be bad, so as soon as [the circular] came out, we were talking to Congress ... If we waited for it to be implemented, it would take five years to make changes and it would be too late." ? Bobby Harnage, AFGE

J. Adam Fenster

Angela Styles, administrator of OMB's Office of Federal Procurement Policy, said the administration would fight efforts to slow or prevent public-private competition.

J. Adam Fenster

The legislative efforts to halt job competitions are "devastating to the agencies," said Stan Soloway, president of the Professional Services Council.

J. Adam Fenster

Legislation, union lawsuit would blunt Bush competitive sourcing plan

Just one month after the White House published new procedures for public-private competition of government jobs, federal unions and lawmakers are moving to stall or prevent new competitions.

The opposition to the revised Office of Management and Budget Circular A-76, which lays out the competition rules, comes as some agencies are preparing to move forward in the next phase of the Bush administration's competitive sourcing agenda.

Resistance to the administration's competitive sourcing agenda has surfaced in amendments to spending bills, new legislation and a lawsuit.

A provision added to the Interior Department and Forest Service's fiscal 2004 funding bill would block funding for new public-private competitions next year. The National Park Service, a bureau in the Interior Department, came under fire from Congress for the high cost of its competitive sourcing program.

Another provision, added to the Agriculture Department funding bill, would halt spending on job competitions and completion of job inventories at the department until it provides information on its "contracting out policies, including agency budgets for contracting out."

A Senate amendment to the Federal Aviation Administration Reauthorization Act of 2004 would prohibit conversion of any FAA facilities or functions from federal to private-sector performance, and a bill introduced June 26 by Sen. Harry Reid, D-Nev., would block job competitions at the National Park Service.

Bobby Harnage, national president of the American Federation of Government Employees, or AFGE, said the union was responsible for the backlash against A-76.

"We knew it would be bad, so as soon as [the circular] came out, we were talking to Congress," Harnage said at a hearing June 26 before the House Government Reform Committee. "If we waited for it to be implemented, it would take five years to make changes and it would be too late."

In addition, the National Treasury Employees Union filed a lawsuit seeking to halt implementation of the circular. Harnage said the lawsuit "has real potential" and there is a "strong possibility" AFGE will join the suit.

In the suit, the union charged that OMB's rewrite of the circular is illegal, because it requires that jobs classified as inherently governmental, and thus not subject to competition, call for workers' use of "substantial discretion," rather than "discretion," the term Congress adopted in the Federal Activities Inventory Reform Act of 1998.

Union leaders argue that this narrower definition of "inherently governmental" would open additional jobs to competition that should be performed by government employees.

"Jobs could end up being inappropriately competed" if agencies interpret "substantial discretion" much more narrowly than "discretion," said Colleen Kelley, the union's national president.

[IMGCAP(2)]OMB issued the revised Circular A-76 May 28 to address industry and government complaints that the old process for public-private competitions was too complicated, time consuming and unfair. The Bush administration wants to increase significantly the number of public-private competitions for government jobs.

Angela Styles, administrator of OMB's Office of Federal Procurement Policy, said the administration would oppose efforts to undermine its competitive souring program.

"We will see this at every agency, as people try to pick off these [competition] efforts one by one. We will fight every one of these, and fight them hard," she said at a June 24 speech before industry and government employees.

At the House hearing, Styles 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.

Kelley said union leaders thought about delaying a lawsuit until after agencies had some experience in using the new circular, but changed their minds after seeing the rewrite. "We were hoping these things would be taken care of in the rewrite," she said.

A return to the old circular, which the union seeks, would mean that 10 or fewer government positions could be converted directly to the private sector without competition.

Kelley said that while the union opposes direct conversions, a return to the old circular would be better than the new "streamlined" competition process in the new circular. Under the streamlined process, competitions of 65 or fewer jobs are to be conducted within three months. Other competitions are to be conducted within 12 months.

The streamlined competition process would not allow agencies enough time to develop a competitive bid, union leaders said at the hearing.

"We believe that when implemented, streamlined studies will be nothing more than sugar-coated direct conversions," Kelley said.

Industry sources said legislative attempts to block job competitions are more onerous than the lawsuit, which they don't believe will go far.

"As a legal matter, this [suit] is likely to be considered premature by the court," said Agnes Dover, a partner with Hogan & Hartson LLP in Washington. The union would have to show that the changed definition had caused real-life harm. It might not be able to do so because the circular is so new, Dover said.

"It is common for agencies to interpret statutes using slightly different words. The question for the court will be does that [altered definition] make a difference in a real-world situation. This is a theoretical issue at this point," said Dover, who advises the Information Technology Association of America, a trade group in Arlington, Va.

[IMGCAP(3)]The legislative efforts to halt job competitions are "devastating to the agencies," said Stan Soloway, president of the Professional Services Council, a trade group in Arlington, Va.

"They are telling the agencies they can't manage," Soloway said. "To the extent they don't want to do the competitions, I'm sure some of them are relieved. But those who are interested in performance-driven management have to look at using the competitive marketplace whenever possible."

Soloway said PSC is working to educate members of Congress about the revised A-76 process. He said some legislators have voted for the amendments based on "sound-bite quality information."

For example, most senators voting for the FAA authorization amendment thought they were voting to restrict privatization of air-traffic control, when they were really voting to restrict competition for the infrastructure that supports air-traffic control, Soloway said.

"It was never debated in committee, there was a brief discussion, and boom -- it passes. That's not a good way to make public policy," he said.

Helen Bradwell-Lynch, the Interior Department's director of competitive sourcing, said the proposed amendment to its funding bill would basically stop all competitive-sourcing work.

"There's no way it wouldn't" affect us, if Congress told the department it couldn't spend any more money on A-76 competitions, she said.

Styles said her office is looking into the Interior Department lawsuit. She said she believes lawmakers are most interested in knowing how the department is spending its money on competitive sourcing.

"I don't think it is a strict prohibition [on competitions] from the committee. I think they want to know what we are doing and how much it will cost," Styles said.

But, she added, "We can't create a special interest group for air traffic controllers, for the Park Service and for everyone else who asks for it." *

Staff Writers Gail Repsher Emery and Jason Miller can be reached at and

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