The Senate approved legislation last week that would allow the Internal Revenue Service to use private debt collectors to pursue overdue taxes. The measure was opposed by the National Treasury Employees Union, which claimed that the IRS would collect tax debt more efficiently if the agency increased its staffing levels.

In the House, the Armed Services Committee adopted an amendment that Rep. James R. Langevin (D-R.I.) said would eliminate loopholes that he contends the Pentagon has used to contract out work performed by Defense employees. The Contract Services Association, which represents more than 300 companies, criticized the amendment as harmful to small businesses and as a rollback of rules issued last year aimed at streamlining the contracting process.

Although the issues underlying each bill are different, they signal that on Capitol Hill, steam once again is building over outsourcing. Federal unions are lobbying against the Bush administration's "competitive sourcing" initiative and hope to make it an election-year issue.

The administration sees public-private competitions as a way to force efficiencies into government operations and save taxpayer dollars. But the job competitions have roiled the federal workforce and, according to some employees, lowered morale inside agencies.

Langevin said more than 11,500 federal jobs were contracted out in fiscal 2002 and 2003, with about 75 percent of those at the Defense Department. The Pentagon, he contended, "plays a little game" of dividing up work in ways that have prevented numerous Defense employees from competing for the jobs.

Rep. Jim Cooper (D-Tenn.) joined Langevin in sponsoring the amendment to the fiscal 2005 defense authorization bill. The amendment passed on a voice vote with bipartisan backing, and John Gage, president of the American Federation of Government Employees, praised Republicans -- including Reps. Tom Cole (Okla.), Rob Simmons (Conn.), John M. McHugh (N.Y.) and Frank LoBiondo (N.J.) -- for their support.

The Langevin-Cooper amendment would retain certain outsourcing restrictions from last year's defense bill; establish a pilot project to allow civil service employees at Defense to compete for new work and contractor work; and put the House on record in support of giving Defense employees the same appeals rights as contractors.

Gregory Junemann, president of the International Federation of Professional and Technical Engineers, said his union hopes that the amendment's appeals right will lead to changes in a 1984 law permitting contractors, but not federal workers, to protest cases at the General Accounting Office.

On the issue of contracting out tax collection, Colleen M. Kelley, president of NTEU, said the union would continue to fight the proposal. She said a past study showed that every $1 spent on IRS staffing would produce a $29 return to the Treasury, and that every $1 spent on private collectors -- who would collect commissions -- would return only $3 to the Treasury.

The debt-collection measure is part of a large corporate tax bill that the Senate approved, 92 to 5. The provision would limit contracts for tax collection to five years and require a biennial report to Congress showing costs and benefits of the effort.

Kelley said previous efforts to use private debt collectors failed, but representatives of collection companies said they have a good track record in tracking down delinquent student loans.

IRS officials have said private collectors are the best way to go because of staffing problems and competing priorities for congressional appropriations.

Diploma Mills, Cont.

After last week's Senate hearings, which showed that some federal agencies have paid for employees to enroll in "diploma mills" to obtain phony degrees, Kay Coles James, director of the Office of Personnel Management, issued a memo reminding agencies that issues raised by Sen. Susan Collins (R-Maine) and Rep. Thomas M. Davis III (R-Va.) are "of central importance to the entire government."

In the memo, James said, "Our position is clear: There is no place in federal employment for degrees or credentials from diploma mills." The memo provided criteria for agencies to use in deciding whether to reimburse tuition or repay student loans on behalf of federal workers.

E-mail: barrs@washpost.com