The big brawl over Bush administration plans for "competitive sourcing": the Office of Management and Budget claims up to 40 percent savings can result when government workers and private contractors bid to see who can do the public's work for less

Workforce, Sept, 2003 by Sheila Anne Feeney

WITH A SIGH, SUSAN WELLS makes this admission; "I'm in denial," says the acting chief of the archaeological division for the Western Archaeological and Conservation Center in Tucson, referring to the possible loss of her job. 'I'll get irritated when it's time."

Wells is an ebullient G.S. 12 and a 20-year veteran of the National Park Service who supervises collections of spear points, pottery shards, sandals and petrified human feces ("coprolites"). She's also in charge of identifying and mapping all potential archaeological sites in 60 different parks, lest someone decide to locate a sewage lagoon over a potential cache of Indian artifacts.

Wells is one of about 858,000 of the country's 1.8 million civil service employees who work in jobs that have been classified by the Bush administration as "commercial." That means that the agencies they work for have been ordered to subject these jobs to "competitive sourcing" to meet an unprecedented push to inject free-market competition into government activities. In the coming months, a team of efficiency experts will descend on the conservation center to study how Wells and others do their jobs, and write up "performance work statements" that allow the government workers and private contractors to stage a gladiatorial bidding battle to see who can do the work most cheaply. "I'm very apprehensive, both about the amount of lime it's going to take and what the results will be," Wells says. "It's not a witch hunt, but I don't even know what business model they're using."

Critics say that the "A-76" campaign to hawk jobs like Wells's is just so much coprolite. The aggressive push to quantify and then bid cult such positions, they say, is in itself a horrific waste of taxpayers' money. While the administration insists that conducting public-private competitions "is not an outsourcing initiative," detractors say that is exactly what it is an ill-considered ideological crusade to divert as many civil service jobs as possible into the private sector. Doing so, they claim, not only places sacred national treasures and critical missions in the hands of profiteers who will put Smokey the Bear into Mickey Mouse ears, but also imperils resources that belong to the American public. Bush administration spokesmen insist that competition will result in a leaner, higher-performance government and will whittle the federal payroll. The fight is an interesting one, in part because it raises the very provocative question of exactly how much money, if any, can be saved by putting federal jobs in play.

"Our ultimate objective is to have competition for commercial activities," says Trent Dully, a spokesman for the Office of Management and Budget, the agency in charge of the president's management agenda. Implementation of A-76 has been protracted and tumultuous, in part because Congress often springs to the defense of embattled agencies. (The House already has passed a bill introduced by congressmen from Nebraska and Florida, for example, to halt 2004 funding for the archaeological-center job competitions in Nebraska and Florida.) Agencies were supposed to have completed competitions on 15 percent of their target jobs by the end of fiscal year 2003, but the numerical criteria were scrapped this spring, After implementation problems and complaints from both unions and private contractors that the process was grossly unfair, modifications were de creed. Direct conversions to the private sector were almost completely eliminated, agencies must now notify OMB of their progress by submitting quarterly reports and tracking competition results, and the competition process was shortened dramatically, to be completed within a year, with a possible six-month extension.

"These competitions under the old way took four years," Dully says. "It you're a small business, you don't have the time and staying power to do it; it was a de facto barrier to competition By reducing the process by a factor of four, we've greatly streamlined and simplified the process, which leads to cost savings."

The OMB says that studies from both the public and private sectors show that subjecting in-house operations to competition results in savings of 10 to 40 percent no matter who wins. "Just by holding a competition, you have savings of 30 percent," Duffy says. That's because the A-76 process unearths redundancies and inefficiencies that can be eliminated, giving civil service employees a road map to perform in a more cost-efficient manner, he says.

The OMB claims that it costs between $2,000 and $5,000 for each position studied, but there will be an $85,000 savings per position over five years. Government workers have wound tip "winning" (retaining their jobs) in more than 50 percent of the public-private competitions held. Detractors counter that these claims are a perfect example of Enron accounting. They point out that no appropriations accompanied the order to conduct the costly performance work statements on which the competitions are based That means that agencies are being diverted from their mandated missions to participate in the competitions. Millions of dollars that could be spent by already cash-strapped agencies on public service is instead devoted to counting wastebaskets, digging up ancient paperwork and cooperating with consultants. (The OMB says that agencies will be able to work the estimated costs of the competitions into their fiscal year 2005 budgets.)