Bill would put outsourcing on the wrong track

Ann Costello

The Truthfulness, Responsibility and Accountability in Contracting Act, which failed in Congress last year and has been reintroduced by Rep. Albert Wynn (D-Md.), would start off by temporarily suspending federal contracts for services.

But in this case, temporary does not necessarily mean short-term. The effects of the suspensions could be debilitating to agencies and contractors.

The bill would, among other things, require agencies to establish comprehensive reporting systems to track the costs of service contracting, suspending contracts in the meantime. It would also require public-private competitions before a contract goes to a company.

Given that the bill grants agencies six months to establish tracking systems, the temporary suspensions could be for at least that long. Contract delays would halt spending that amounts to $86 billion a year, or $7 billion a month, according to Federal Procurement Data Center statistics for 1999.

Enacting this bill would hurt agency missions and businesses alike, including many of the small businesses that Wynn claims to support.

Along with suspending nearly every decision on contracting, regardless of dollar value, the bill would require formal cost comparisons on contracts using the most efficient organization (MEO) process of the Office of Management and Budget's Circular A-76 to be made in consultation with labor representatives.

It also would allow agencies to hire employees for commercial services and for work contracted in'which ironically assures that the bill is unlikely to pass in its present form.

TRAC would then require agencies to report retroactively and in great detail on every service contract made in the two years before the bill's enactment. And the General Accounting Office would have to report to Congress every 60 days on agency compliance with the act.

The government has contracted out for commercial services for the past 45 years. But Congress has been at odds with itself over outsourcing. It has often bashed agencies for competing with the private sector. Now TRAC would vault gracelessly 180 degrees in the opposite direction, ignoring four important factors:

  • The federal work force shortage means, in most cases, there's already too much work to do without competing against the private sector.

  • Agencies contract out work to acquire skills their employees don't have'often because the people who had those skills left for the private sector.

  • The bill requires use of an A-76 MEO determination, a process that is so flawed and problematic that Congress has ordered GAO to study it.

  • The bill has misplaced priorities: Despite decades of evidence that what works best in services contracting is best value, TRAC would base outsourcing decisions purely on cost.

What we need is a reasonable process for making outsourcing decisions, one that fosters public-private partnerships rather than adversarial competition. The current process seems to encourage businesses to lust after work performed by federal employees; TRAC would encourage the opposite.

Section 832 of the 2001 Defense Authorization Act requires GAO to convene a panel to study the transfer of commercial activities. The panel has been formed and its report is due in about a year. Congress should wait for it.

Ann Costello is a principal of Acquisition Solutions Inc. of Chantilly, Va.


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