January 03, 2010
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Congress is Cleaning Up the Contracting Out Mess; However, Much Still Depends on Executive Branch Compliance

As part of the Congressional effort in 2009 to deal with the mess caused by the Bush Administration’s wholesale privatization effort, lawmakers repeatedly borrowed language and principles from a comprehensive contracting out reform bill introduced earlier this year—the Correction of Longstanding Errors in Agencies’ Unsustainable Procurements (CLEAN UP) Act (S. 924, H.R. 2736) that was introduced by Senator Barbara Mikulski (D-MD) and Representative John Sarbanes (D-MD).

The CLEAN UP Act, which is championed by AFGE, includes or inspired a number of provisions which are now law, including:

  1. a requirement in the FY10 Omnibus Appropriations Bill that non-Department of Defense (DoD) agencies establish inventories of service contracts to determine which are unproductive and should be cancelled; or should be insourced so the work can be done by reliable and experienced federal employees because of poor or the critical nature of the jobs.

  2. a requirement in the FY09 Omnibus Appropriations Bill that non-DoD agencies develop insourcing policies for new work and outsourced work, particularly outsourced work that is poorly performed, was contracted out without competition, or that includes work that is closely associated with inherently governmental functions;

  3. a government-wide prohibition against starting new OMB Circular A-76 studies that was included in both the FY09 and FY10 Omnibus Appropriations Bills;

  4. a prohibition in the FY10 Defense Appropriations Bill against carrying out all A-76 studies and conversions in DoD, the only agency still carrying out privatization reviews;

  5. a prohibition in the FY10 Defense Authorization Bill against DoD from carrying out future A-76 studies that last past 24 months, measured from preliminary planning to binding performance decisions, absent extraordinary circumstances;

  6. a prohibition in the FY10 Defense Authorization Bill against starting new A-76 studies in DoD until it has been determined by the Government Accountability Office that, among other things, the department has in place a contractor inventory as well as systems to track costs and savings from privatization studies and that the circular’s minimum cost differential (a.k.a., 10% rule) and in-house overhead rate reflect appropriate costs; and

  7. prohibitions in the FY10 Defense Authorization Bill and the FY09 Omnibus Appropriations Bill against direct conversions (i.e., converting work performed by federal employees to contractor performance without first conducting lawful public-private competitions).

“There is no question,” declared AFGE National President John Gage, “that this has been a banner year for our efforts to create laws and policies that make sourcing more accountable to agencies and taxpayers and more fair to federal employees. Our union is grateful to Senator Mikulski and Representative Sarbanes for their courageous leadership. AFGE will obviously continue to work with Congress in 2010 to clean up the contracting out mess left behind by the Bush Administration. However, next year the focus will shift in part to the Obama Administration, as it fully and faithfully complies with requirements to develop contractor inventories, promote insourcing, prevent direct conversions, and reform the A-76 process.”

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