New OMB report hails competitive sourcing

The Office of Management and Budget today issued a report aimed at quelling employee fears and proving that the administration's policy of competing federal positions that are considered commercial improves the way the federal government runs.

OMB reviewed 650 competitions either completed in 2003 or the early part of 2004 and found they reduced operating costs by more than $1 billion and increased efficiency roughly 15 percent.

'The agency data confirms what other studies of competitive sourcing have shown for years: competition delivers results for taxpayers, government service recipients and government employees,' said Clay Johnson, OMB's deputy director for management.

Johnson added that this new information makes a 'compelling case for the use of competitive sourcing as a standard management tool.'

The annual report is required by a provision in the 2004 Omnibus Appropriations Bill calling for agencies to submit a summary of how they are competing their eligible federal jobs with private-sector bidders under OMB Circular A-76.

The administration's competitive sourcing initiative, which is one of the five President's Management Agenda items, has continually come under fire from federal-employee unions and lawmakers because they believe the White House wants to send federal jobs to the private sector.

Last summer, lawmakers placed provisions in the Treasury, Transportation and General Government appropriations bill as well as the Defense and Interior departments' spending bills to curb or stop the initiative. Many of these provisions were removed in conference committee'mostly at the administration's behest.

The administration hopes the report will show lawmakers the benefits of A-76.

OMB found that taxpayers saved $12,000 annually in savings or cost avoidance per position studied.

In 2003, federal employees offered the best service 89 percent of the time, OMB found. Johnson said this underscores the high quality of their work and internal improvements that agencies are making.

OMB said agency success is tied to sound planning, especially with the human resources division to close competency gaps. OMB also found that grouping activities in ways that will generate private-sector interest is important.

OMB will put all this information into a new competitive-sourcing database, which will provide more complete information to Congress. Officials have not said when they will implement the database.

The database will be 'a mechanism for agencies to leverage their collective knowledge and experiences using competitive sourcing as a management strategy to improve the efficiency and effectiveness of the government's commercial operations,' Johnson said recently.

Reactions to the report were predictable.

The Contract Services Association of America trade group, in a statement attributed to its president Chris Jahn, said, 'This report proves what CSA has advocated all along. When the private sector competes, taxpayers win.'

The American Federation of Government Employees countered 'the Office of Management and Budget's latest attempt to sell its unpopular privatization initiative cannot withstand public scrutiny.'

In a statement, the union that represents 600,000 federal and D.C. government workers, continued, 'given its highly political approach to privatization, no savings estimates from OMB can be taken seriously without an independent third party review.'

(Posted 12:28 p.m. May 25 and updated 10:04 a.m. May 26)

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