Bush Plan To Contract Federal Jobs Falls Short

The unions are not happy, either. They cite another troubled competition, this one at the Internal Revenue Service. In 2005, about 1,100 agency employees initially won in their bid to keep jobs to manage paper tax returns at seven IRS service centers. After a company protest, though, the agency reversed itself and hired IAP Worldwide Services.

Shortly before IAP was to take over in late 2006, it notified the IRS that it was not prepared to do the work at all locations. By then, federal employees were already moving to other jobs. The contractor did not get fully on board until late last year. Yet in a report issued last spring, the OMB claimed about $35 million in savings, said Kelley, the NTEU president.

"This, for me, is just an example that OMB's projections of savings from federal contracting are wildly speculative and they are completely unsupported by any evidence," she said.

The OMB's Johnson said agencies are doing more to validate savings claims.

"The bottom line," he said, "is the federal government can be more focused on its cost and its performance. We should always look at what it costs us to do everything -- IT, human resources, building maintenance, everything. And if we ever stop doing that, then we are being poor stewards of the taxpayers' money."

At West Point, the workers won, but they are not celebrating. Some displaced employees found other academy jobs. Some took early retirement.

Soft landings are getting harder to come by, and more competitions are on the way, said Don Hale, president of the AFGE Local 2367, which represents 1,600 workers at the academy.

"When we first started the competitive sourcing initiative, we had some fat here," he said. "Now it's at a point where we're going to start losing people because we can't gain any efficiencies."