Opportunities for Small Firms in New Sourcing Rules New streamlined competitive sourcing procedures under the revised OMB Circular A-76 will open opportunities for small firms, but the rules also could make it easier for agencies to keep work in-house, according to government and industry officials. Under the new rules, units with 65 or fewer employees are eligible for the streamlined competition. Those competitions are to be completed within 90 to 135 days from the time they are announced, compared with 12 to 18 months for larger competitions. For the first time, contractors will not have to beat the in-house bid by 10% in order to win a streamlined competition. Business and government executives examined the impact of the new rules at a June 11 conference in Arlington, VA, sponsored by the Professional Services Council and the Washington law firm of Wiley, Rein and Fielding. “There is a great incentive to filet the work into (units) of 65 or less,” said Ron Knecht, senior vice president of Science Applications International Corp. “You can do it a lot faster.” He also pointed to a General Accounting Office ruling last month that the Army improperly bundled a logistics support contract. In an A-76 competition at Fort Riley, KS, the Army said it was more efficient to include food service with unrelated base, vehicle and aircraft maintenance. GAO ruled that administrative convenience was not a justification for the bundling. (SAA, 5/30) The decision “is going to cast a long shadow,” Knecht said. A key issue is whether agencies will judge the competitions fairly, said John DeLane, CEO of Del-Jen Inc., which has participated in many sourcing competitions. When streamlined procedures were used under the old rules, he said, the agencies’ in-house teams won more than 90% of the competitions. Joe Sikes, director of the Defense Department’s competitive sourcing office, agreed: “The history in DOD is that streamlined competitions don’t generate work for the private sector. They generate a reason not to (outsource)…And that’s what we’ve got to change.” The Interior Department, which has many units with just a few employees, has been using a version of streamlined competitions for some time, and its experience has been different. Scott Cameron, deputy assistant secretary of Interior, said, “Roughly half those jobs have gone out to the private sector,” mostly to small businesses. Cameron said federal employee unions believe contractors will win more often because the in-house team no longer enjoys a 10% cost advantage. Under the new rules for a streamlined competition, an agency does not have to solicit formal bids from contractors before deciding whether to outsource. It can conduct market research to determine the cost of having work performed by a contractor or can ask for bids through GSA schedules. The OMB rules provide no right to appeal or protest the outcome of a streamlined competition. But Robert Burton, associate administrator of the Office of Federal Procurement Policy, said OMB will be watching the results: “We are going to hold agency officials accountable for decisions. “The bottom line is, what’s most cost-effective for the taxpayer?” He spoke at GSA’s Federal Acquisition Conference in Tysons Corner, VA, June 12.