The Office of Management and Budget sent a letter Wednesday to Rep. Bill Young, R-Fla., chairman of the House Appropriations Committee, warning that the president's senior advisers would recommend a veto if language trimming the competitive sourcing initiative remained in the fiscal 2005 omnibus appropriations bill that Congress was crafting.
The language, backed by Rep. Chris Van Hollen, D-Md., and Sen. Barbara Mikulski, D-Md., focused on the rules governing job competitions and how the winners of such competitions are chosen.
Labor union leaders rallied to keep the provisions in the bill, but shortly before midnight Friday, lawmakers agreed to drop the language, helping to pave the way for passage of the omnibus bill over the weekend.
Rep. Steny Hoyer, D-Md., said in a statement that he was "deeply disturbed that all outsourcing protections for federal employees were dropped ... despite strong bipartisan support." He added, "Heavy-handed tactics by the Bush administration and a compliant Congress once again have thwarted the will of a majority."
The OMB letter, signed by director Joshua Bolten, said, "The administration strongly objects to several provisions ... that would limit the effectiveness of competitive sourcing in improving performance and reducing costs when the government obtains commercial services."
Specifically, the administration opposed limits on competitions in the appropriations measures for the Agriculture and Interior departments. Those measures were rolled into the omnibus spending bill. The Interior language also requires contractors to show their bids would generate enough savings to compensate for the cost of holding competitions.
The administration also singled out requirements in appropriations bills for the Transportation and Treasury departments and independent agencies that would require decisions on winners in job competitions involving more than 10 employees to be chosen based solely on cost, not quality. And the White House opposed language prohibiting the use of funds to implement OMB's May 2003 revisions to Circular A-76, which sets the rules for job competitions.
"If either of these provisions is included in the final version of the bill, the president's senior advisers would recommend he veto the bill," the OMB letter stated.
Federal contractors were quick to praise Congress' action. "The American taxpayer is the big winner under this legislation," said Chris Jahn, president of the Contract Services Association, in a statement released Saturday. "By allowing President Bush's competitive sourcing initiative to move forward, Congress chose competition over complacency."
Stan Soloway, president of the Professional Services Council, which represents 170 companies that provide services to the government, said the rejected amendments "would have significantly set back more than a decade of bipartisan efforts to utilize the known benefits of competition."
In a statement issued Thursday, American Federation of Government Employees President John Gage said, "Bush administration officials have consistently opposed all attempts to make the privatization process more accountable to taxpayers and more fair to federal employees."