By Jason Miller
Executive Editor
FederalNewsRadio

In the eight-year fight over how and what non-inherently governmental jobs should be competed with the private sector, the federal employee unions clearly won most of the battles.

But former and current Bush administration officials say when looking back on the impact competitive sourcing has had on agencies the controversial initiative has made a significant difference.

“We looked at our support costs and the work we had reengineered and we produced savings of over $1 billion a year,” says Clay Johnson, the Office of Management and Budget’s deputy director for management, who oversaw all the initiatives under the President’s Management Agenda. “We applied competition to a lot of federal work that is considered commercial in nature and that in itself made us better.”

Angela Styles, the first administration with the Office of Federal Procurement Policy under President Bush, says despite employee union opposition and several congressional roadblocks, the fact that more than just the Defense Department is using Circular A-76 to conduct these competitions is a sign of success.

Styles, who now is a partner with Crowell and Moring in Washington, led the rewrite of A-76, which governs the competitive sourcing process.

“The goals of taking a management initiative and applying it to the civilian agencies and expanding its use at DoD were achieved,” she says. “Really at the end of the day, we would have been happy if people took competitive sourcing and learned how to best use the new management tool.”

By and large, most agencies have used A-76 to compete commercial government jobs over the last eight years.

According to OMB’s 2007 report to Congress on competitive sourcing, agencies held 1,375 competitions between fiscal 2003 and 2007. OMB estimates these competitions will save taxpayers more than $7.2 billion over all performance periods. The report says the majority of these savings are expected to be realized over the next five years.

Despite OMB’s claims of success, Johnson and Styles admit that federal employee union’s all-out assault on the initiative had a great impact.

“Competitive sourcing was the one PMA initiative that fell furthest short of our expectations,” Johnson says. “Unions did a good job of mischaracterizing this, and congressmen with a large number of federal employees in their states or districts resisted this.”

Styles agrees with Johnson’s assessment.

“The Hill didn’t like it no matter what we did,” she says. “It was tough no matter what we did.”

Colleen Kelley, president of the National Treasury Employees Union, says competitive sourcing had a tough time because the administration was not upfront with their goals from the start.

“From the beginning, they said this initiative was about saving taxpayers’ money and that was bogus when you look at the things they contracted out,” says Kelley, whose organization led several successful fights against competitions won by industry but were eventually brought back into the government. “The initiative had nothing to do with saving money. It was all about moving work to contractors.”

Kelley points to a competition at the IRS for managing paper file returns. IRS employees initially won, but the vendor protested. After the protest, the contractor received the award.

Kelley says the contractor didn’t deliver on its promises for two years and when the contract came up for renewal in 2008, IRS brought the work back into the agency because they realized it was a huge mistake.

“Every IRS commissioner who testified to Congress says federal employees can do the work better and more efficiently than the private sector,” she says.

Kelley says NTEU and other employee unions tried on several occasions to talk to OMB about the initiative, but the conversations were mostly one-sided.

She says the unions were left with no choice but to take their concerns to Congress.

“We have some serious questions about OMB’s data that alleges cost savings,” Kelley says. “With the IRS example, OMB claimed $35 million in savings even though the contractor was failing to deliver on the contract. I’m also suspect on OMB’s claim that federal employees win 80 percent of the competitions. They are not looking at the number of jobs, but just the competitions. The number of jobs is a better measure.”

Kelley adds that OMB should have started the conversation about the initiative differently. She says instead of just issuing a list of 850,000 non-inherently governmental jobs, the administration should have worked with the unions more closely on what jobs could be competed.

“I would have asked OMB to make sure agencies had the resources and tools they need to compete,” she says. “I had one conversation with Clay Johnson about bringing work back into the government. He said there was no prohibition to bring work back, but there was not process to do it.”

Kelley says NTEU asked the incoming Obama administration to suspend all competitions for a year, made some policy and legislative recommendations and set new definitions for A-76.

Styles agrees with Kelley that agencies are burnt out of A-76 and it should be put on hold in the short term.

“There was not anything that I can point to that worked well,” Kelley says. “They never started with the right questions, they started off with quotas and from the beginning their intent was clear, they wanted to decrease the federal workforce.”

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On the Web:

OMB- 2007 Report to Congress on Competitive Sourcing (pdf)

FederalNewsRadio – Part 1 of looking back at the PMA: E-government’s promise partially fulfilled

FederalNewsRadio – OMB broadens initiative to make agencies more effective

FederalNewsRadio – An initiative by any other name . . .

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