The federal government spent $110 million last year to determine whether 12,573 federal jobs could be done more efficiently by private contractors, with in-house workers winning 91 percent of the time, according to an Office of Management and Budget report.
The annual report on President Bush's "competitive sourcing" initiative said that the government spent $74 million on the public-private job competitions at Cabinet departments and major agencies, and $36 million on the "fixed costs" of overseeing the program.
More than 9,600 other jobs were also studied in competitions begun but not completed in 2004.
OMB officials say the expenditures will be more than offset by the anticipated savings of $1.4 billion over five years from forcing agencies to grapple with how to provide services more efficiently, either through restructuring or hiring contractors.
"Competition has opened the door to new and better ways of completing jobs in the government," David H. Safavian, OMB's administrator for federal procurement policy, said yesterday in a written statement. "We are seeing an unmistakable link between the strategic application of competition and an agency's ability to save taxpayer dollars through consolidations, results-oriented performance standards and the leveraging of technology."
Leaders of federal employee unions doubt the administration's claims of future savings. They say the 91 percent win rate of the in-house teams underscores their contention that the Bush initiative does more to provoke anxiety among federal workers than to save money for taxpayers.
"Their projected savings figures are exaggerated," Colleen M. Kelley, president of the National Treasury Employees Union, said in an interview. "Time will tell if that kind of money is saved, and I believe it will not be."
John Gage, president of the American Federation of Government Employees, said in a statement that OMB should "finally acknowledge the superiority of the in-house workforce it has so slandered and bullied over the last several years."
Leaders of contractor organizations said the report shows that the participation of contractors is crucial to achieving savings, and that OMB should do more to ensure a level playing field.
Stan Z. Soloway, president of the Professional Services Council, noted that more than half of the competitions involved bids from only one contractor or no contractor at all. The biggest projected savings were found in cases in which one or more contractors were angling for the work, he said in an interview.
"Competition, we know, is a key factor here," he said.
In 2003, federal agencies studied 17,595 federal jobs and found civil servants to be superior to contractors 89 percent of the time. The competitions cost agencies $88 million that year, and OMB officials projected $1.1 billion in savings.
Chris Jahn, president of Contract Services Association of America, said the initiative has helped taxpayers, but contractors have too often been on the losing side.
"You've got the pubic sector winning 90 percent of the time several years running now," Jahn said. "And what is going to happen is that these tremendous savings are going to go away, because the private sector isn't going to compete. And you are already seeing evidence of that."