Congress chips at competitive sourcing

Chipping away at A-76

May 19: The Bush administration objects to any defense authorization language that requires Defense Department employees to compete for a certain percentage of work currently performed by contractors.

May 12: The House Armed Services Committee approves an amendment to the 2005 Defense Authorization Act that requires Defense Department employees to be allowed to compete for 10 percent of all new work and contractor work.

June 14: The Senate approves an amendment to the 2005 Defense Authorization Act that lets federal workers appeal the loss of public-private job competitions to the General Accounting Office. It allows protests from the agency tender official, the representative of the government employees, as well as an official chosen by a majority of employees.

?The Senate also approves an amendment to the bill that requires Defense Department employees to be considered for new work, and gives them a 10 percent or $10 million cost advantage on competitions of 10 or more jobs.

June 18: The House approves an amendment to the 2005 Homeland Security appropriations bill that stops spending on the public-private competition of more than 1,100 positions for immigration information officers, contact representatives and investigative assistants in the Citizenship and Immigration Services bureau. Proponents of the measure say the jobs should not be performed by the private sector.

June 16: The White House objects to language in the House 2005 Interior appropriations bill that limits Energy Department, Forest Service and Interior Department spending to conduct public-private competitions. All three entities are operating under spending caps in 2004.

Angela Styles, former administrator of the Office of Federal Procurement Policy, said she agreed with giving protest rights to a second federal employee representative.

J. Adam Fenster

Worker rights get a boost under A-76

The administration's competitive sourcing initiative will have a few more dings in it after this year's legislative session is done, industry and union observers said.

Proposed changes to the public-private competition process include enhanced protest rights for federal workers, caps on the amount spent to conduct competitions at three agencies and a requirement that the Defense Department consider letting employees compete for new work.

"The tendency seems to be to support the White House message on competitive sourcing. But when you get to specific measures like capturing the cost of competitions or protest rights, there is bipartisan support on many of these issues [for change]," said Colleen Kelley, national president of the National Treasury Employees Union.

But the danger of such changes is that agencies may begin to shy away from competitions because they're too much trouble, said Cathy Garman, senior vice president of public policy at the Contract Services Association of America in Washington.

"This will slow down or stop competitions at the agencies. It's a death by a thousand cuts, so to speak," Garman said.

A rocky start

The competitive sourcing process is governed by rules laid out in Office of Management and Budget Circular A-76. A revised circular was published in May 2003 after a year of review by a panel with members from government, industry and academia. Since then, lawmakers have made numerous attempts to alter the process through legislation.

Sen. Susan Collins, R-Maine, introduced an amendment that would give federal employees rights to protest competition decisions at the General Accounting Office, a right that only contractors enjoy. The amendment was incorporated into the Senate's 2005 Defense Authorization Act. The House added a provision to its version of the bill that says defense employees and contractors should have comparable legal standing.

Union leaders said this right is only fair.

Collins' provision "would help us move to a level playing field," Kelley said. "We will continue to push to maintain bipartisan support [for the measure]."

Industry representatives, however, said Collins' legislation goes too far because it would give protest rights to the agency tender official as well as an employee chosen to represent the group competing for their jobs.

The ATO is the closest official to a corporate executive and should be the official that has protest rights, said Stan Soloway, president of the Professional Services Council, an Arlington, Va., trade group. Giving protest rights to a second public-sector employee wouldn't be fair to the private sector because only a private-sector corporate executive has protest rights, he said.

But Angela Styles, former administrator of the Office of Federal Procurement Policy, said she agreed with giving protest rights to a second federal employee representative.

"The agency tender official will rarely, if ever, protest an agency award to a contractor. The agency tender official lacks the independence, autonomy, resources or incentive to bring a lawsuit against their own employer," Styles said in a May paper written for the American Federation of Government Employees.

Styles, along with Kelley, Soloway and Bobby Harnage, then-president of AFGE, sat on the Commercial Activities Panel that rewrote Circular A-76. Styles is now a government contracts attorney at Miller & Chevalier Chartered in Washington.

Collins' provision does not give federal employees protest rights to the U.S. Court of Federal Claims, rights that the private sector has.

Benefits for feds

An amendment to the Senate Defense Authorization Act, S. 2400, sponsored by Sens. Edward Kennedy, D-Mass., and Saxby Chambliss, R-Ga., would give federal employee bidders a 10 percent or $10 million cost advantage in job competitions involving 10 or more federal jobs.

The old circular had this benefit. The new circular gives this advantage to the government in competitions of more than 65 employees.

Restoring the benefit to competitions with 10 or fewer jobs will ensure that the government accounts for the cost of conducting the competition and moving the work to the private sector, Kelley said.

But making this change will hurt small businesses because they won't be able to beat the 10 percent or $10 million cost differential, Garman said. Small businesses are most likely to compete for jobs of 65 or fewer employees, she said.

"I don't know any small business that can do that," she said.

Another provision, offered by Reps. James Langevin, D-R.I., and Jim Cooper, D-Tenn., and added to the House Defense Authorization Act, H.R. 4200, requires over two years that federal employees be allowed to compete for 10 percent of new work and contractor work based on how many federal employee jobs are competed. If 500 jobs are competed, for example, federal workers could compete for 50. President Bush said he'll veto the bill if this provision stays.

Sens. Kennedy and Chambliss responded to the veto threat by writing language that doesn't call for specific percentages of work to be competed. Their amendment says the Defense Department shall ensure defense workers are considered for new work.

"They are two different approaches to the same problem. That problem being that DOD refuses federal employees opportunities to perform new work and federal contractor work," said John Threlkeld, legislative representative for the American Federation of Government Employees, which represents 600,000 federal and District of Columbia workers.

But the legislative language won't serve as an incentive, Garman said.

"I think agencies will think twice about doing these competitions if in-sourcing and looking at new work is mandated," she said. "They will just say this is getting too hard to do, and we're not going to bother."

Even without the proposed legislative changes to A-76, some industry and former government executives said the public-private competition process has already taken a hit because many competitions conducted under the new circular are inadequate.

According to an OMB report in May, federal employees won 89 percent of public-private competitions conducted in fiscal 2003. Industry executives and Styles said that fair competitions should not yield such a high win rate for either federal employees or the private sector.

"It's not that we don't think the government shouldn't ever win, but [the numbers] couldn't be that high," Soloway said.

Styles said that at first look, she thought OMB's results meant that the whole competitive-sourcing initiative had failed.

"I think it probably means people need to manage these competitions more closely so they are fair," she said.

Soloway said the main problem PSC identified in a review of about 250 competitions was that agencies don't put up significant numbers of jobs for competition, so private-sector companies aren't likely to bid for them.

The council found studies of 0.08 positions and 0.59 positions ? each less than one full-time job ? which show that agencies appear to be trying to meet administration requirements for conducting competitions rather than concentrating on conducting good ones, Soloway said.

Staff Writer Gail Repsher Emery can be reached at

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