The A-76: Process over management?

By Shirl Kinney Nelson

Angela Styles and her staff at
the Office of Federal Procurement Policy deserve high praise for the process
improvements proposed for OMB Circular A-76.

They've crafted a process
that is fairer to the private sector and less drawn out for federal employees.'
However, we think the new A-76 uses 'process' to try solving what are
essentially management issues.''

Gone is the policy to rely on
the private sector for performance of commercial activities.' In its place
is public-private competition for all commercial activities performed by federal
employees.' And all federal activities are presumed to be 'commercial'
until proven inherently governmental.

About 850,000 federal positions
are currently reported in agency Federal Activities Inventory Reporting Act
inventories, and while OMB still wants to compete half of those positions, they
will negotiate goals on an agency-by-agency basis.' Compete and recompete,
that is.' Agencies that fail to perform will not have their options
exercised and their 'letters of obligation' may be terminated.' Whether
the agency performs well or not, the in-house function will be subjected to
recompetition at the end of the performance period.

The justification for all this
turmoil, if true, is tough to refute. The claim is that taxpayers reap a 30
percent savings regardless of who wins these competitions.' If only that
were true.' We'd like to believe it, but we just can't.' How can
anyone believe it when the vast majority of the government never has used'and
is far from having the capability to use'activity-based cost accounting.

Does anyone really know how
much it costs to perform a given function?' No one knows even what it costs
to conduct a cost-comparison study.' The figures used by Defense agencies,
the IRS and other agencies vary from about $3,300 to $5,800 per full-time
equivalent studied.' But those figures include primarily'if not
only'the cost of contracted support to conduct the study.' Not the
considerable two to four years of cost for the agency A-76 official, nor the
cost of the most-efficient organization, or MEO, team, the source selection
official, the independent review official; and certainly not the cost of lost
productivity of the staff under study.' Even the relatively meager
identified costs are ignored when calculating the cost savings.' If this
vision for continual competition and recompetition comes to pass, agencies will
need to develop a whole new functional expertise in proposal preparation.

A new government function for
managing A-76 studies may be required for every agency.

Even if government knew the
costs of conducting a competition, the costs would not begin to account for the
toll on public service caused by the constant turmoil of public servants
continually preparing proposals to compete for their own jobs.' Considering
the human capital crisis facing agencies today, the prospect of the diminished
work force working on proposals, not to mention the increased demands on the
federal acquisition and human resources workforce, raises real concern.

Don't get me wrong.' I
believe passionately in competition.' I just think it's misapplied in the
context of public service.'' Yet there is no doubt that agency
officials need to decide whether to continue to perform certain functions
in-house.' We also need to improve the performance and accountability of
public servants.' How do we do that, if not through public-private

At Acquisition Solutions, this
is what we believe:


Agency sourcing decisions
should be made strategically, in the context of the Government Performance and
Results Act.' Federal managers should be free to use a business case
analysis of whether a function should be performed in-house or under contract.

As for the performance and
accountability of public servants, it seems that OMB is attempting to use A-76
to do what the civil service rules and procedures have failed to do:' give
federal managers the ability to manage performance and move out nonperformers.'
'OMB is substituting the procurement process for a management

Instead of a public-private
competition policy, the government needs a strategic sourcing policy.' We
also need new federal hiring, firing and performance management flexibilities
such as the administration envisions for the Department of Homeland Security.


Shirl Kinney Nelson is a
principal with Acquisition Solutions, Inc.' She is a former procurement
executive and deputy assistant secretary for the Department of Commerce.


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