Contractors Score Few Victories in Job Competitions Federal employees have won the overwhelming majority of job competitions conducted so far under the Bush administration’s initiative, according to a survey by Government Executive magazine. Through late December, the biggest win posted by contractors was in a competition for 120 property management jobs at the Veterans Administration, the magazine reported. Contractors were shut out in practically all streamlined competitions involving 65 or fewer employees. In the streamlined procedure, agencies conduct market research to estimate what it would cost for a contractor to do the work, rather than soliciting bids, and compare the private-sector cost with their existing in-house costs rather than allowing government employees to restructure their operations. Stan Soloway, president of the Professional Services Council, called the findings “a major red flag.” He told the magazine, “If you had that kind of ratio of private sector wins, you would have (union-backed) legislation on the Hill in five minutes, because the assumption would be that the process was rigged.” Among the findings of the survey: •Forest Service employees have retained 2,187 of 2,474 jobs put up for competition •Employees of the Centers for Medicare and Medicaid Services won all 17 competitions conducted during fiscal 2003. •At the National Institutes of Health, 1,464 employees kept their jobs in two major competitions, by virtue of a reorganization that eliminated 468 jobs. •Of 1,206 jobs that were competed at the Agriculture Department’s Natural Resources Conservation Service last year, most of them in streamlined competitions, only six positions went to contractors. The recent success of federal employees is unusual by historical standards. The Defense Department reported that its employees won about two-thirds of competitions between 1995 and 2003. But the results of the smaller streamlined competitions in DOD have been even more favorable to government employees in the past, according to the Pentagon’s competitive sourcing chief, Joe Sikes. He said the streamlined competitions “generate a reason not to (outsource).” (SAA, 6/27/03) The Office of Management and Budget has not compiled governmentwide figures on the results of the administration’s highly touted and highly controversial competitive sourcing initiative. Two lawsuits by federal employee unions against the revised OMB Circular A-76, which sets the rules of competitions, are pending and congressional sniping has been heavy. Congress further muddied the waters in the 2004 appropriations bills, establishing different rules for competitions in different agencies. Some of the new restrictions will make it tougher for contractors to win. The biggest change will affect the Defense, Transportation, Treasury and Interior departments. The Federal Acquisition Institute says appropriations for those departments “effectively eliminating the ability to conduct streamlined competitions” by requiring that government employees be allowed to present a cost-cutting plan Rules for those agencies also require contractors to beat the in-house team’s bid by 10% for studies involving more than 10 positions. Other agencies are not required to apply the 10% cost differential in competitions involving 65 or fewer jobs. All agencies must apply the differential in larger competitions. Appropriations for the Energy Department and the Agriculture Department’s Forest Service set limits on how much the agencies may spend on competitions. Agriculture’s activities relating to rural development or farm loan programs are exempt from competitions, according to the market research firm Input. Congressional conferees bowed to administration pressure and killed a provision that would have permitted federal employees and their unions to appeal competitive sourcing decisions to the General Accounting Office. GAO asked for comments last year on whether such appeals should be allowed, but it has not released a decision.