By Stephen Barr
Wednesday, October 3, 2007

It's an issue that often leaves federal employees feeling anxious and contractors frustrated. It also has prompted annual battles between Congress and the White House.

The fight is over a long-standing Bush administration effort to put large numbers of federal jobs up for competition with the private sector. The idea is to determine whether federal work is being performed in the most efficient manner and, if not, whether the jobs should be turned over to the private sector.

The battle took a new turn Monday evening, when the Senate approved an amendment that would make it more difficult for companies to bid for government work under the administration's "competitive sourcing" initiative, known as A-76 in federal budget offices. The measure, approved 51 to 44, mostly along party lines, would extend or make permanent previous legislative limits on outsourcing.

One of the amendment's chief sponsors, Sen. Edward M. Kennedy (D-Mass.), called the Senate vote "a victory for fairness." Another chief sponsor, Sen. Barbara A. Mikulski (D-Md.), said the Bush administration had forced federal employees "to spend time and money competing for their jobs instead of doing their jobs."

The amendment, a priority for the American Federation of Government Employees and other unions, includes a series of requirements that Mikulski said would "level the playing field."

The amendment, for example, would require contractors to show a savings of at least 10 percent or $10 million over the federal cost to win a competition. Federal employees also would get the right to ask the Government Accountability Office, an arm of Congress, to review a contracting decision if the employees thought it was unfair or biased against them.

Those provisions would apply across the government. Because the amendment was part of a large bill authorizing fiscal 2008 funding and programs for the military, some outsourcing requirements applied only to the Defense Department.

For example, the amendment would exclude health care and retirement costs from cost comparisons in Defense competitions, on the grounds that Congress has mandated the benefits for federal employees and that contractors should not gain an advantage if they provide less generous benefits or no benefits.

The Defense Department also would be required to issue guidelines "for ensuring that consideration is given to using federal government employees on a regular basis" for new work and for work currently done by contractors.

During a brief debate, Sen. John Thune (R-S.D.) protested the amendment, saying it would "cause the A-76 process to become so cumbersome and expensive that it would effectively eliminate the ability of the federal government to conduct any future A-76 competitions."

The House version of the fiscal 2008 defense authorization bill also tightens up outsourcing procedures. The White House has objected to several provisions in the House and Senate bills, raising the prospect of a veto.

Business groups are concerned that Congress may not be inclined to compromise on outsourcing issues, as it has in the past.

"This provision goes way beyond what they have ever done before," said Colleen Preston, senior vice president at the Contract Services Association. "The fact that it is in the House and Senate bill is going to be a real killer."

Stan Z. Soloway, president of the Professional Services Council, predicted fewer companies would compete for federal work. "At a time when Congress is pressing for competition everywhere else, it is ironic that they would kill competition in areas that could benefit from it," he said.

John Potter, the postmaster general, and MaryAnn Musumeci, a medical center director for the Veterans Affairs Department, will be honored with the 2007 Roger W. Jones Award for Executive Leadership tomorrow evening.

The award, in its 30th year, is presented by American University's School of Public Affairs. Mark Everson, the head of the American Red Cross and a former Internal Revenue Service commissioner, will give the keynote address, "Thoughts From a Recovering Political Appointee."

Potter began his career in the Postal Service as a clerk in New York in 1978. He has sorted and delivered mail and served in executive positions in the field and at postal headquarters. As postmaster general since 2001, he has reduced post office operating costs and increased productivity.

Musumeci has been the director of the Bronx/James J. Peters Veterans Affairs Medical Center for 13 years. She began her federal career in 1972 as a registered nurse, and has held nursing and administrative positions in the VA. She was honored with the presidential rank award in 2001 and 2006.

The award recognizes public servants who have improved the effectiveness of their organizations and demonstrated a commitment to training and educating managers and executives. It is named for Jones, who served as chairman of the old Civil Service Commission and later at the State Department and the White House budget office.