Congress Limits on Defense Outsourcing Congress has approved restrictions on outsourcing of small units at the Defense Department. The $368 billion defense appropriations bill passed by both houses includes an amendment killing two provisions of the revised OMB Circular A-76: In streamlined competitions, involving 65 or fewer employees, it requires that contractors must beat the DOD employees’ bid by at least 10% in order to win the work; and DOD employees must be allowed to restructure their work into a Most Efficient Organization before the sourcing competition begins. Under the revised A-76, a streamlined competition requires a federal agency to compare its existing costs against the cost of contracting out the work. Critics, including federal employee unions, argued that this gives government workers no chance to make their units more efficient before competing with the private sector. The amendment was sponsored by Sens. Edward Kennedy (D-MA) and Saxby Chambliss (R-GA). However, an OMB spokesman told the Washington Post the provision won’t hurt the competitive sourcing initiative, which is a key part of President Bush’s management agenda. The streamlined competitions for small governmental units are designed to be completed within 90 to 135 days. Those rules have drawn fire because, unlike larger competitions, contractors are not required to show a 10% cost saving in order to win. But so far there is little evidence that the new rules stack the decks against federal employees. The Agriculture Department’s Natural Resources Conservation Service has completed dozens of streamlined competitions at small offices across the country, and has decided not to outsource the work in almost every case. The Centers for Medicare and Medicaid Services, a part of HHS, conducted streamlined competitions involving more than 300 jobs, and did not outsource any of them. “Each of the 17 competitive sourcing studies conducted during FY 2003 showed that it was more cost effective to maintain the function in house than to outsource it,” Leslie Norwalk, the centers’ acting deputy administrator, wrote in a report obtained by GovExec.com. Other attacks on competitive sourcing are awaiting action by congressional conference committees. OMB has said it would recommend a presidential veto of some of those bills. The House voted Sept. 9 to kill the revised A-76 rules and return to the old rules, which were widely criticized for their complexity. The amendment was attached to the $89 billion Transportation-Treasury appropriations bill, H.R. 2989. That provision was one of those targeted by OMB for a veto. (SAA, 9/19) The House has voted to block funding for competitions in the Interior Department and the Agriculture Department’s Forest Service, but the Senate rejected a similar amendment in its version of the Interior appropriations bill. The House also rejected a request for funds to conduct competitions in the Department of Veterans Affairs. But a conference committee watered down a prohibition on competitions at the Federal Aviation Administration, voting instead for a four-year freeze on outsourcing of air traffic control jobs.