Many Contractors Pass On Job Competitions With federal employees winning about nine out of 10 public-private job competitions, many contractors are refusing to play. More than half the job competitions conducted under OMB Circular A-76 in fiscal 2004 attracted either no offers or only one offer from contractors, according to a report to be issued shortly by the Office of Management and Budget. The report shows that federal employees won 91% of the jobs that were competed last year, up from 89% in 2003. “If that percentage continues for a long period of time, I do think it will have a chilling effect on the private sector’s interest…and that would be absolutely deadly to the initiative,” said Robert Burton, associate administrator of OMB’s Office of Federal Procurement Policy. Burton described the OMB findings at a forum sponsored by the National Council for Public-Private Partnerships in Washington May 18. The low level of contractor participation is even more troubling, Burton said, because experience shows the government saves more money when several bidders compete: “If you have two or more private-sector competitors, the savings increase dramatically… Competition is good.” The Energy Department surveyed contractors about why they did not bid on job competitions, said Dennis O’Brien, director of the department’s competitive sourcing office. “We got a lot of answers back that said they didn’t think the process was fair,” he acknowledged. Other companies said they did not understand the A-76 process. But he said a frequent question from contractors was, “How do you convince us you don’t have this wired?” Alan Chvotkin, senior vice president of the Professional Services Council, said he is “skeptical” that the rules for job competitions create a level playing field. O’Brien said, “There is still a major sales job that has to be done by all the agencies” to convince industry to compete. He advocates using GSA schedules to solicit the largest number of bids, but OMB has to approve that on a case-by-case basis. The competitive sourcing initiative is a key part of President Bush’s management agenda. “This initiative will fail if the private sector retreats, if the private sector does not compete,” OFPP’s Burton said. OMB reported that agencies completed 217 competitions in 2004, involving 12,573 fulltime-equivalent positions. Competitions for almost 10,000 additional jobs were in progress when the fiscal year ended. Agencies were generally conducting larger competitions in 2004 than in the previous year. Burton said the evidence shows that the money saved per employee increases in larger competitions. Energy’s O’Brien declared, “The big savings have been consolidations,” where several offices or several functions are bundled into a single competition. He said anti-bundling rules do not apply to A-76 competitions. Officials from several agencies said one reason government employees are winning so often is that they see the competitions as a chance to transform their operations. Raymona Stickell of the Internal Revenue Service said more than 500 employees at the agency’s publication distribution centers won a competition over five private-sector bidders by combining three offices into one and introducing innovative technology. Federal employee unions and their allies in Congress continue to try to restrict the use of job competitions even though the unions’ argument that large numbers of federal workers will lose their jobs has been proved “false” by the past two years of competitions, Burton said. Last year Congress prohibited the Veterans Affairs Department from conducting competitions on health care jobs – the largest part of its workforce – and prohibited the Defense Department from accepting offers from any company that did not provide employee health insurance equal to that provided by the government. “Eliminating the legislative restraints that have been imposed on this initiative is absolutely one of our top priorities,” Burton said. “It makes no sense.” In a policy statement May 19, OMB urged the House to remove restrictions on job competitions in the Interior Department and the Agriculture Department’s Forest Service. The 2006 appropriations bill for those agencies, H.R. 2361, would limit the amount they could spend on competitions. OMB estimates competitions in 2004 will produce net savings of $1.4 billion. It said the largest savings were realized in IT competitions, $36,900 per employee. Savings of around $25,000 per employee were estimated in competitions involving maintenance and property management; logistics; human resources/personnel management; and finance and accounting.