Congress Restricts Outsourcing in Small Units Congress has voted to restrict outsourcing of small units in the Interior and Energy departments and the Agriculture Department’s Forest Service. Under a provision of the Interior and Related Agencies Appropriations Act, H.R. 2691, a contractor would be required to beat the government’s cost by at least 10% in streamlined job competitions involving units of from 10 to 65 employees, according to the conference report on the bill. The appropriations bill was passed by both houses and sent to the White House for President Bush’s signature. The law also permits federal employees in those small units to reorganize their work and create a “most efficient organization” before the competition begins. A similar provision for Defense Department competitions was enacted in this year’s defense appropriations bill. (SAA, 10/3) The Bush administration abolished the 10% cost advantage for small units as part of its revision of OMB Circular A-76, which sets the rules for job competitions. Under the new rules, the 10% cost advantage for federal employees does apply in competitions involving 65 or more employees. The House had voted to block competitions in Interior and the Forest Service, but the Senate refused to go along. The final appropriations bill limits funds for competitive sourcing competitions to $2.5 million for Interior and $500,000 for Energy. The Forest Service may spend up to $5 million on the competitions. The three agencies are required to report on their competitive sourcing studies by Dec. 30. The House has voted to kill the new Circular A-76. That provision is part of the Transportation-Treasury appropriations bill, H.R. 2989, now pending in a conference committee.