Competitive Sourcing Plan Hits Snag
House Votes Against Rules That Would Speed Up Competition for Federal Jobs

By Christopher Lee
Washington Post Staff Writer
Thursday, September 11, 2003; Page A21

A key program in President Bush's drive to make government run more like a business is under attack -- and showing the bruises.

Bush has promised to require hundreds of thousands of federal workers to prove they can do their jobs better and more cheaply than private contractors. Such public-private competition promotes government efficiency and saves taxpayer dollars even if the jobs stay in-house, he says.

But in recent months, the president's "competitive sourcing" initiative has been battered by growing concerns in Congress, opposition by federal employee unions, departures of key aides and the slowness of federal agencies to embrace change.

The latest setback came Tuesday night. House members, including 26 Republicans, passed an amendment to an appropriations bill that would block the Office of Management and Budget from using newly revised rules designed to speed up the job competitions government-wide. The language, which so far is not in the Senate's version of the bill, would force a return to an older, more cumbersome version of rules known as Circular A-76 -- a move opponents said could cripple Bush's policy.

"If this were to become law, the union agenda will have succeeded, which is to stop competition," said Stan Soloway, president of the Professional Services Council, a contractor group.

Clay Johnson III, deputy director for management at OMB, said in a statement yesterday that reverting to the old rules would revive a "burdensome" process with "no guarantee that a competition will result in better value for the taxpayer."

"We are committed to the revised competitive sourcing process that ensures taxpayers receive best value and federal employees are treated fairly," Johnson said.

Before the vote, the administration issued a statement suggesting that Bush would veto the Transportation/Treasury appropriations bill if it contained language to impede competitive sourcing. Johnson's statement did not say if the veto threat still held.

Rep. Chris Van Hollen (D-Md.), who sponsored the amendment, said it would merely require OMB to use the old rules until better ones could be devised.

"What I want is a fair process that benefits the taxpayer ultimately," he said. "What they did was create a system in which federal employees were competing with one hand tied behind their back, which is unfair."

Whether the Senate will adopt a similar measure remains unclear. Sen. Craig Thomas (R-Wyo.), who supports the Bush policy, said yesterday the initiative is "fairly controversial," and opinion in the Senate "fairly evenly divided." But anyone who wants to involve the private sector more and limit the size of government should oppose a return to the old rules, Thomas said.

"Frankly, the old process was broken," he said.

Sen. Joseph I. Lieberman (D-Conn.), ranking Democrat on the Senate Governmental Affairs Committee, disagreed. "OMB's new rules reflect the president's ideological agenda of privatizing government work at all costs," he said in a statement. "The House vote is good news and I hope the Senate follows suit."

The Bush initiative has run into several other obstacles, as well.

In July, the House, concerned about the millions of dollars spent by some agencies to comply with the policy, passed measures to block funding for job competitions at the Agriculture and Interior departments.

The same month, the House refused a White House request to allow the Veterans Administration to spend as much as $75 million to conduct job competitions in the government's second largest department. The VA, which has 220,000 employees, suspended most such studies in May after its general counsel ruled that federal law prohibits the VA from spending money on them without Congress's approval.

After persistent criticism from lawmakers and union leaders, the administration announced recently it would no longer require agencies to meet numerical targets for competitions. Before that, the White House had insisted that agencies put 15 percent of eligible jobs up for competition by the end of this month, with the larger goal of evaluating 425,000 jobs over the next few years. Critics said the quotas were "arbitrary" and noted that most agencies were struggling to meet the aggressive timetable.

The administration also has lost three in-house champions of competitive sourcing. Former OMB Director Mitchell E. Daniels Jr. resigned his post in June to run for governor in Indiana. Mark W. Everson, former OMB deputy director for management, left to head the Internal Revenue Service. And Angela B. Styles, the OMB official who led the rewrite of the rules and is responsible for implementing the policy, is returning to the private sector next week, in part because the grind of the job was wearing her down, she said.

"I think the worm is turning here," said John Gage, president of the American Federation of Government Employees, which opposes the Bush policy. "The administration has clearly been rolling on this whole contracting issue, and this is the first major sign that the people are saying, 'Maybe that's enough.' "

Colleen M. Kelley, president of the National Treasury Employees Union, said: "We do have a lot more people asking important questions, and they are not satisfied with the answers."

The full House and a Senate committee, for instance, have approved measures that would require every agency to submit an annual report detailing how many jobs were put up for competition and the cost of doing so, as well as the savings achieved.

Even some supporters of the policy say improvements are needed.

"I think in some cases the administration is moving too fast, doing too much competitive sourcing, more than they can adequately handle and evaluate," Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said Tuesday during the floor debate on Van Hollen's amendment. Davis nevertheless opposed it, saying the old rules were worse than the new ones.

Rep. Jo Ann S. Davis (R-Va.) voted with Van Hollen, even though she was "no big fan" of his amendment.

"I do believe that the A-76 process has some problems. I've heard it loud and clear from my district," Davis said. "I just want to make sure that we revisit it and make sure that before we do any outsourcing that it's done fairly and honestly with the federal workers. . . . We may be rushing it a little bit. We need to make sure that whatever we do, we do it right the first time."