Davis suggests spinning off FSS as private office May 18, 1998

Rep. Tom Davis wants to privatize the General Services
Administration’s Federal Supply Service to make it more flexible and competitive.


The change would likely free FSS from the constraint of federal rules,
including Civil Service regulations that restrict pay and compensation, the Virginia
Republican said.


A privatized FSS would have its own board of directors and would set its
own rules and regulations, Davis said.


GSA Administrator David Barram opposed the idea last month, when he and
Davis held preliminary discussions about the change, Davis said. FSS, which runs
GSA’s Multiple-Award Schedule, pays for its operation by the money it generates and
receives only a token appropriation in the agency’s annual budget.


A privatized FSS would better serve federal agencies, reduce overhead and
other expenses, create a results-oriented buying force, and encourage partnership among
buyers, contractors and users, members of Davis’s staff said.


FSS commissioner Frank P. Pugliese Jr., who proposed privatizing GSA three
years ago when the agency was under fire by Congress, said he likes the
idea. “It’s a matter of going that next step of saying you really are a
business-based organization,” he said.


If privatized, FSS could share profits more equitably with its employees
and reinvest money into its organization, Davis said.


The congressman said he would probably not seek a privatization bill,
because Congress has not been effective at privatizing federal agencies.


Davis said he wants to prompt the administration to undertake the
privatization plan.


A member of the House Government Reform and Oversight Committee, Davis
said he plans to hold hearings on the proposal but has not yet scheduled them.


Some industry experts said they doubt GSA or the administration will agree
to privatize FSS.


“I think he’s got a long way to go to sell that program,”
said Thomas L. Hewitt, chairman and chief executive officer for Federal Sources Inc. of
McLean, Va.


“I think it would work and would be successful, but it’s the
public policy questions that are the issue,” said Robert J. Woods, Federal Sources
president and former commissioner of GSA’s Federal Technology Service.


Pugliese said the idea would have to take on a life of its own. “You
would need so many stars aligned, it’s not even funny,” he said.


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