Another view: Revised circular will level A-76 playing field

Tad Anderson

Government employees have been on a hot streak when it comes to A-76 competitions. In-house teams competing against private-sector bidders for federal jobs have won about 90 percent of recent competitions.

That streak could be coming to an end'and that wouldn't be bad news if you consider that the goal of A-76 is to improve efficiency through competition. By any measure, one side winning nine of every 10 competitions isn't very competitive.

Competitive sourcing has been a hotly debated element of the President's Management Agenda. The Office of Management and Budget's Circular A-76 outlines the process for competitions between the private sector and in-house government employees for commercial functions designated by the agencies as suitable for competition.

The Bush administration revised the circular in 2003 to make competition and best value centerpieces of its management policy, with greater attention to results. Previous versions focused more heavily on government's reliance on the private sector and discouraged government from competing with industry.

The idea of competitive sourcing has garnered criticism from both predictable and unexpected sources. Union leaders criticize the administration's policy because they feel the rules for competition are stacked against employees. Conservatives say the policy abandons the goal of shrinking the size and associated cost of the bureaucracy. And many in the private sector say the rules for competitions'particularly streamlined competitions'are too easily 'gamed' by the agencies.

The results thus far provide reason for concern. A Government Accountability Office study of competitions in the Defense Department and six civilian agencies in fiscal 2002 and 2003 found that 81 percent of the work under full competition remained in-house. The results of the streamlined competitions were even more one-sided; 99 percent of the jobs remained in-house. The overall rate was about 90 percent.

Because of these results, many federal contractors no longer bid on A-76 competitions, which creates a less competitive, less efficient environment. And decreasing levels of competition will make it difficult, if not impossible, for the government to determine if it truly is getting the best value.

The GAO data, however, represent A-76 competitions under the old circular rules; the revised policy should result in a much more level playing field.

In particular, under the revised circular, the government and the private sector must both follow the same sets of rules in the Federal Acquisition Regulations. In theory, the government will now be treated like a bidder and must respond to the specific requirements in the request for proposals. In addition, the time to complete these competitions is shortened to 12 months.

The revised circular also acknowledges the importance of increasing private-sector participation for standard competitions. If vendors decline to compete, the contracting officer is required to contact potential bidders from industry to identify what the problems were with the bidding, the reasons they did not bid and changes that might be made to enhance competition.

It will be critical for OMB to continue monitoring how competitive sourcing improves under the new circular. The lack of private-sector involvement in A-76 competitions is troubling, and it is important to know the extent of private-sector bidding in these competitions. In the future, OMB should track the amount of private-sector competition, because without it, the government cannot determine if it is receiving the best bang for the buck.

Tad Anderson served as the Office of Management and Budget's associate administrator for e-government and IT before becoming vice president of government markets at Dutko Group Cos. Inc. of Washington.

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