Congress is again debating what kinds of federal work should be turned over to contractors, particularly at three bastions of civil service employment -- the Departments of Defense and Homeland Security and the Internal Revenue Service.

As part of the fiscal 2005 defense authorization bill, the Senate approved amendments Monday that would place controls on the Pentagon's use of contractors.

Sens. Ron Wyden (D-Ore.) and Byron L. Dorgan (D-N.D.) added a provision aimed at ensuring that only Defense Department employees oversee contracts. Their amendment was prompted by concerns that the Pentagon is relying on companies to manage contracts for the rebuilding of Iraq, even though some of the companies performing contract oversight have business relationships with the companies that they oversee.

"It seems to me we have to get the oversight back where it belongs, and that is in the hands of the Department of Defense and not in the hands of the private contractors," Wyden said. "Oversight is inherently a governmental function because accountability must be first and foremost to taxpayers."

Under an amendment sponsored by Sens. Edward M. Kennedy (D-Mass.) and Saxby Chambliss (R-Ga.), the Pentagon would be required to continue formal cost studies when outsourcing the work of 10 or more Defense employees, to give "fair consideration" to Defense employees for new work that might be contracted out and to send Congress a report next year showing that it has adequate staff to carry out and administer contracts.

The Senate also approved an amendment sponsored by Sens. Susan Collins (R-Maine) and Carl M. Levin (D-Mich.) to ensure that all federal employees -- not just Defense workers -- would have the right to protest job competition decisions to the General Accounting Office.

Collins said that private-sector bidders have appeal rights and that the amendment would level "the playing field for all parties."

A job competition underway at the Department of Homeland Security, involving about 1,100 immigration information officers, appears to be drawing increased scrutiny from Senate Democrats. The employees handle work permits and green card renewals and guard against fraudulent claims.

Yesterday, Sens. Joseph I. Lieberman (D-Conn.), Patrick J. Leahy (D-Vt.), Robert C. Byrd (D-W.Va.) and Kennedy wrote Homeland Security Secretary Tom Ridge asking him to cancel the competition because of new information casting doubt on whether turning immigration services over to the private sector would improve efficiency.

In particular, the letter said, documents obtained by the senators show that officials in U.S. Citizenship and Immigration Services questioned whether the jobs had been properly classified as "not inherently governmental."

"The concerns of the department's experienced immigration agency officials were rejected by DHS leadership," the senators wrote.

Charles Showalter, president of the American Federation of Government Employees Department of Homeland Security Council 117, welcomed the senators' letter. "These are dedicated officers, and it is doing a disservice to the American taxpayer to lose these officers," he said.

But Homeland Security spokeswoman Valerie Smith said the department had conducted "a full review" of the job competition. "Senior immigration officials were part of the decision-making process and were on board with that decision," she said.

Elsewhere on the privatization front, the House Ways and Means Committee approved a tax bill that would permit the Internal Revenue Service to use debt collection companies to locate delinquent taxpayers and collect overdue taxes from them.

The bill, shaped by committee Chairman Bill Thomas (R-Calif.), may be brought to the House floor this week for a vote.

Colleen M. Kelley, president of the National Treasury Employees Union, said the proposal "presents a very grave danger to taxpayer privacy" and "would return to the U.S. Treasury only a fraction of the money that IRS employees would generate if taxpayer compliance efforts were funded with sufficient resources."

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