By Edward Walsh Washington Post Staff Writer Friday, May 30, 2003; Page A21
The Bush administration announced yesterday a long-awaited policy to speed up a process to open up 425,000 federal jobs to competition from private companies to do the work that federal employees now perform.
Office of Management and Budget Director Mitchell E. Daniels Jr. and Angela Styles, administrator of OMB's office of federal procurement policy, unveiled the revised policy, which they said was designed to shorten and streamline the process to require competition for government work and eventually save taxpayers' money.
But officials of federal employees labor unions denounced the changes, saying they granted far too much discretion to government managers and would be aggressively used by the administration to pursue President Bush's agenda to "outsource" as much government work as possible to private contractors.
"Given this tremendous discretion, they will exercise this discretion in a way that favors contractors and pushes the work right out the [government agency] door," said Jacqueline Simon, public policy director for the American Federation of Government Employees.
Administration officials denied that Bush's goal was to farm out government workers' jobs to private companies. They said that Bush's goal is to encourage competition and that federal workers could very well win the contests and keep their jobs.
"We are indifferent as to who wins the competition" for government work, Daniels said at a news conference. "It need not result in any changes in federal employment. We'll just have to see what a more wide-open system brings."
Yesterday's announcement concerned the final revisions of what is known as Circular A-76, a regulation that was promulgated in 1966 and governs the "outsourcing" of government work. The details of the final revisions were the subject of lengthy study and intense debate within the administration and among private contractors who are interested in doing more government work and federal employees unions that want to preserve their members' jobs.
The administration has said that 850,000 federal jobs -- out of a total civilian federal workforce of 1.8 million -- are essentially "commercial" in nature and could be performed by nongovernment workers. It has set an ultimate goal of opening half of those jobs, or 425,000, to competition from private contractors. The administration's immediate goal, which Styles said will be met by a handful of agencies, is for 15 percent of the 850,000 jobs to be subject to private competition by the end of the current fiscal year.
The administration has not specified what work would most likely be opened to competition, but it appears to include property maintenance, computer work, security guards and other work routinely done in the private sector.
According to Daniels, under the old system, competitions to decide whether a particular government task could best be done by federal employees or a private contractor sometimes stretched for three or four years. He said the time required and the cost and complexity of the system discouraged many private companies from competing to perform government tasks.
Under the revised process announced yesterday, these competitions will have to be completed in one year, although that deadline could be routinely extended by six months. The new process also creates a "streamlined" competition involving 65 or fewer federal jobs that has a 90-day deadline for completion that could be extended to 135 days.
The new process also eliminates what was known as "direct conversions" under which 10 or fewer jobs at an agency were turned over to a private contractor without federal employees being given a chance to compete to keep the jobs. But under the streamlined competition, federal employees will lose a built-in 10 percent cost advantage that effectively required private contractors to propose doing a job for at least 10 percent less than the cost of keeping the jobs in a government agency.
Simon said the revised one-year, standard competition includes a new "best value" criterion that makes the cost of performing a task 50 percent of the factors used to decide who should do it. "It's tremendous discretion to award contracts on the basis of subjective factors," she said. "This is very difficult to challenge. Up to 50 percent of the factors in deciding on an award can be subjective."
Simon also complained that under the streamlined competition rules, it is up to agency managers to decide whether to give their employees a chance to develop plans for more efficient operations as an alternative to proposals to do the same work by outside contractors. She said she suspected many agency managers will not give their employees that chance.
"All of this is taking place in the context of an administration that is blatantly pro-contractor and wants to privatize as much as they can," Simon said.
Adding to the union criticism, Colleen M. Kelley, president of the National Treasury Employees Union, said, "These rules open the door to millions more taxpayer dollars being handed over to private contractors without any evidence that they can perform the work better and cheaper for the taxpayers than federal employees can."
Styles replied that a wide-open "best value" criterion with no cost component is already widely used in making government purchases. And, she said, agency heads are being encouraged to allow their employees to develop plans to compete with private contractors seeking their jobs.
"I feel we went above and beyond in taking into consideration [the unions'] concerns," she said. "The agencies are screaming at me because I'm not giving them enough flexibility. They do have valid concerns about subjectivity, and we tried hard to address those concerns, and I think we did."
Stephen Sorett, a former administrator of the government contract program at George Washington University Law School, said he understood the apprehension of federal employees. But he said that the new process should be an improvement and that there is no guarantee that private contractors would always win competitions with federal workers.
"I think the private sector has as much to worry about as the public sector on these things," he said.