June 24, 2003
Diane Witiak
(202) 639-6419

Contractors Are Pleased With OMB's A-76 Rewrite

(Washington, D.C.)—“The new OMB Circular A-76 and OMB’s privatization quotas subordinate agency missions, goals and objectives to OMB’s political objective of stroking private contractors—an important constituency of the Bush Administration. In OMB’s view, agencies exist not to provide services, but to privatize services, jobs and the public interest,” AFGE National President Bobby L. Harnage, Sr., will tell lawmakers. (Read the Testimony)

Harnage is scheduled to testify before the House Government Reform Committee on OMB’s new Circular A-76 on Thursday, June 26, at 9:30 a.m. in Room 2154 of the Rayburn House Office Building.

Harnage will detail 12 of the union’s most significant concerns with the new circular and also the extent to which the circular reflects the principles established by the Commercial Activities Panel (CAP) in its report released last year.

Blasting the circular’s increased emphasis on using “streamlined” competitions and OMB’s claim that streamlined competitions have replaced direct conversions, Harnage will point out that direct conversions are still part of the A-76 process—the only difference is the authority has shifted from the agencies to OMB. Further, under streamlined competitions the Most Efficient Organization (in-house bid) would be optional and the minimum cost differential—which requires appreciable savings before shifting work between the federal and contractor sectors—would be eliminated.

“If we are really interested in using public-private competition to make federal agencies more efficient, as opposed to just enriching contractors, then it is imperative that in-house workforces be allowed to submit their most competitive bids,” Harnage will explain.

Harnage will note that despite the Administration’s contention that OMB’s privatization quotas and the A-76 rewrite are all about saving money for taxpayers, no goals are imposed for the establishment of reliable and comprehensive systems for ensuring taxpayer dollars entrusted to contractors are well spent.

“The emphasis is on turning the work over to contractors, not making sure it is done right,” Harnage will say. “Agencies don’t even know what work contractors are doing—let alone how well they are performing.”

The union leader will also condemn parts of the circular that: leave in place the controversial 12 percent overhead rate imposed against all in-house bids, despite concerns raised by the Defense Inspector General; permit the subjective and unprecedented “best value” process; narrow the definition of “inherently governmental;” and impose absolute competitive requirements on federal employees for acquiring new work and retaining existing work—but not contractors.

“Contractors have openly predicted that OMB’s rewrite will allow them to win more competitions than ever before,” Harnage will conclude. “In fact, it has been predicted that the new A-76 process will allow contractors to win 90 percent of all public-private competitions. Contractors have every reason to be pleased by the results of OMB’s A-76 rewrite.”

Read the Testimony

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