OMB Wrestles with Competitive Sourcing Rules The Office of Management and Budget is considering a streamlined competition procedure to determine whether contractors can take over the work of small government offices, replacing the current practice of direct conversion, which gives federal employees in those small units no opportunity to compete for their jobs. With the Bush administration pushing competitive sourcing, many agencies have expressed concern that direct conversion would be widely used to contract out services in units with 10 employees or fewer, acknowledged Angela Styles, administrator of OMB’s Office of Federal Procurement Policy. She testified March 25 before the Readiness Subcommittee of the House Armed Services Committee She said OMB is considering what she called “a highly simplified and streamlined” competition process for those small units. OMB is preparing a final revision of its Circular A-76, which governs public-private job competitions. (SAA, 11/29/02) The proposed revision drew more than 700 comments, many of them from federal agencies and employees opposing the changes. The Interior Department, which has many small units at its facilities across the country, is using an “Express Review” as an alternative to direct conversions. The review bypasses a formal bidding process. “We are looking for businesses in local communities...and calling them up and asking for oral or written bids,” Scott Cameron, deputy assistant secretary for performance and management, explained last year. (SAA, 7/26/02) Responding to the chorus of opposition from many federal agencies, employee unions and members of Congress, Styles said, “I cannot emphasize enough that competitive sourcing is not about outsourcing; nor is it about downsizing the workforce.   Rather, competitive sourcing is about creating incentives and opportunities for efficiency and innovation through competition. “No one in this Administration cares who wins a public-private competition.” A centerpiece of the proposed A-76 revision is a 12-month deadline for completing what is called a “standard competition,” compared to the three years that an average competition now takes. Many agencies called the timetable impractical, but contractor groups say the long and complex nature of current competitions scares many companies away. OMB’s draft says agencies may extend the 12-month deadline if they determine in advance that a particular competition is especially complex. At the hearing, Michael Wynne, principal deputy undersecretary of Defense for acquisition, technology and logistics, said the Defense Department plans to begin competitions on half its commercial jobs — 226,000 positions — by the end of fiscal 2005. He said DOD is “on track” to meet the White House goal of competing 15% of commercial jobs – 67,800 positions — by the end of the current fiscal year. The Defense Department has asked Congress to allow the use of best-value standards in conducting job competitions. Other agencies can use best value, but Defense is required by law to consider only cost savings in deciding whether to outsource. Styles said civilian agencies are making progress in conducting job competitions, but added, “Overall use of competitive sourcing remains weak.”