November 17, 2005
Emily Ryan
(202) 639-6421
[email protected]

Contracting Out Reform a Huge Victory for Taxpayers, Feds

(Washington)—The American Federation of Government Employees (AFGE) today applauded the conferees to the Transportation-Treasury-HUD Appropriations Bill for making the Office of Management and Budget’s (OMB) privatization scheme less unfair to federal employees and more accountable to taxpayers. “Inclusion of the Bond-Mikulski reform provisions is a big first step towards eliminating waste in the OMB Circular A-76 privatization process,” declared AFGE National President John Gage.

The conferees agreed to require that all agencies must subject functions that are last performed by 10 or more federal employees to public-private competitions before such work can be given to contractors. As part of such public-private competitions, federal employees will always be able to submit their best bids (Most Efficient Organization plans), and contractors will always have to at least show savings sufficient to cover the costs of conducting privatization reviews (Minimum Cost Differentials). These reform provisions also will limit the use of the controversial and highly subjective “best value” process—by which agencies can give work performed by federal employees to contractors even when the in-house workforce submits more responsive and less expensive bids. Instead, agencies will be able to specify the levels of quality they need, and technically qualified bidders will then compete on which one can provide the service at the lowest cost.

These long-overdue reforms were forced out of the FY04 and FY05 conference reports because of OMB objections, even though this same language has applied to the Department of Defense since FY04. This year, however, these reforms were included thanks to the bipartisan leadership of Senate Chairman Christopher Bond (R-Mo.) and Senator Barbara Mikulski (D-Md.). AFGE also is appreciative of the efforts of Senate Ranking Member Patty Murray (D-Wash.); House Chairman Joe Knollenberg (R-Mich.); House Ranking Member John Olver (D-Mass.); and Rep. Steny Hoyer (D-Md.).

These reforms are no overnight success. Indeed, they exist only because of the incredible courage and persistence of Sen. Mikulski and Rep. Chris Van Hollen (D-Md.). Rep. Van Hollen has successfully offered floor amendments to the Transportation-Treasury Appropriations Bill for each of the last three years that were designed specifically to allow the Congress to make these reforms in conference. “It is a great tribute to their skills as legislators as well as to the strength of their characters that Senator Mikulski and Representative Van Hollen never gave up this important fight and ultimately won a big victory for taxpayers and federal employees,” Gage said. “Senator Mikulski’s work with Chairman Bond and other conferees to craft this bipartisan compromise has been extraordinary.”

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