More contracting opportunities - government procurement

Nation's Business, Jan, 1988

More Contracting Opportunities

President Reagan has ordered federal bureaucrats to do all they can to contract out commercial activities currently performed by department and agency personnel.

This move by the President should create opportunities for firms seeking to do business with the federal government.

Under the recent presidential order, federal managers have until April 29 to list commercial functions that their employees perform. This list will be sent to the Office of Management and Budget (OMB).

By June 30, managers must identify and report to the OMB which of those functions could be performed more economically by the private sector.

The acceptable excuses for not contracting out are limited to a few categories: national-security concerns, statutory requirements and lack of price-competitive contractors.

Reagan ordered the OMB to compile contracting opportunities and publish them in the Federal Register.

The office also must devise a system to track the progress made by federal departments and agencies in contracting out.

"This executive order will help the cause [of firms that wish to do business with the federal government] because it puts the President's weight behind [Circular] A-76," says David Muzio, OMB's deputy associate administrator for procurement policy. Circular A-76 is a longstanding statement of federal policy requiring that, whenever possible, the government should obtain its goods and services from private companies.

Because the order will likely remain in effect in future administrations, Muzio says, it should help the lag in contracting that traditionally occurs in a change of administrations.

This slowdown occurs, he says, because members of the outgoing administration lose enthusiasm for their jobs and it takes a while for their successors to learn those jobs.

Photo: Food service at the Office of Personnel Management cafeteria in Washington was contracted out to a private-sector firm. More such opportunities should arise under a new directive from President Reagan.