Mr. Chairman, as I understand this amendment, it basically strikes the new OMB circular A-76 and would be replaced by the old OMB circular A-76, which all the parties were complaining about prior to this time. So the question really before…
Mr. Chairman, as I understand this amendment, it basically strikes the new OMB circular A-76 and would be replaced by the old OMB circular A-76, which all the parties were complaining about prior to this time. So the question really before the House is, is the new circular which was met, after getting input from all of the stakeholders, with a number of unanimous agreements on how this should be changed and incorporated into this, after literally 700 comments were received in developing the guidelines, if this should be changed or should we go back to the old circular A-76.
Is that a correct understanding?
I yield to the gentleman from Maryland.
Reclaiming my time, I understand the gentleman's position. To be sure, all of us who have dealt with these issues, and I have, for a number of years, there are concerns about the way the administration has gone about competitive sourcing. Two major problems that come in: One we have fixed with this bill, and that is when the administration goes to competitive sourcing, there is a cost to that because you have to hire people to evaluate it. There are costs of the government looking and revamping how they would produce a service. You are evaluating the private sector to see how they would provide the service. There are costs to that, and right now those costs are not currently recaptured.
We have put language into the underlying legislation here through our committee that will, for the first time, have the Federal Government report on those costs so that they can be adequately waived.
The second is issue is, I think in some cases the administration is moving too fast, doing too much competitive sourcing, more than they can adequately handle and evaluate. We have heard there have been a couple high-profile instances where the administration has come forward and the evaluations have probably not been appropriate, and I think they are biting off more than they can chew. But I do not think that goes to the base of the A-76 reasonable or reasonable. I like the new procedure, or if there are revamps, I would prefer not to do it through this process. I would rather go back and evaluate it in committees. We have held hearings and are continuing to look at this.
Remember, competitive sourcing is not the same as out-sourcing or privatization. Its purpose is neither to downsize the workforce or to contract jobs out. It is about harnessing the benefits of competition to produce superior performance for the taxpayer, regardless of who performs a service. And in almost every instance where competitive sourcing is applied, the government ends up with a savings. Sometimes this is done by the government employees and the government groups who have gotten together and have retooled the way they provide the service and do it more efficiently. Sometimes it is done by an outside party coming in and showing that they can do it better.
There is no way to measure efficiency in government when you are a monopoly. But if you can go out, occasionally, to the private sector and say, what can you perform, it gives us a standard of performance, a measurement of efficiency that we would not have otherwise.
Now, there is a problem with this that I readily concede, and it troubles me, and it is one that the gentleman from Maryland (Mr. Van Hollen) and I have wrestled with. And that is, who wants to come work for the Federal government and dedicate a career to civil service if your job is going to be up for evaluation every 5 years, which is what the guidelines in last year's bill called for. Twenty percent every year was going to be looked at, of inherently non-governmental services that the government is providing, and we would see if it could be competitively sourced. And, basically, that meant on average every 5 years a person's job would be evaluated, and that hurts our recruitment. It hurts our retention.
Now, the fact of the matter is, in most cases where the outside parties win, Federal employees are offered rights of first refusal. In fact, that is spelled out better in the new A-76 circular. That if, in fact, the government is displaced by an outside firm, jobs are offered to the Federal employee government to provide that service so they are not out of work. They are no longer Federal employees. They lose some benefits; they pick up some benefits in some particular cases. But to be sure, there are instances that we wrestle with.
Now on May 29, the OMB published its final revisions of the A-76 process. These revisions were the first major overhaul to the competitive sourcing process in 20 years. And this came after all parties, but particularly Federal employees, were complaining about the old system, a system that we return to if this amendment passes.
What we have now is a product of a 2-year effort that includes discussions and negotiations with all stakeholders including Federal employee groups, private sector companies. As I stated before, more than 700 comments were taken into account in developing these new guidelines. They also incorporated the core recommendations of the Commercial Activities Panel. This panel, headed by the Comptroller General, conducted a year-long review of the competitive sourcing process and issued recommendations, most of them unanimous, for comprehensive changes to process. And I think we have to give that revamped process a chance to work before we willy-nilly throw it out and go back to the old process, which everyone was complaining about.
I think the new process is, in many ways, fair. The gentleman from Maryland (Mr. Van Hollen) and I disagree. I will address more of this later. I urge that we oppose the Van Hollen amendment which would take us back to the days that everyone was complaining about and just were not working efficiently.
Mr. Chairman, again, my friend from Maryland and I have fought a lot of battles on behalf of Federal employees. I represent a lot of Federal employees, as he does. We disagree about this particular amendment. I also represent a lot of contractors, and I also represent taxpayers who at the end of the day should be the major beneficiary from this because competitive sourcing, I think, means not less government or more government, it means more efficient government, and that is the goal of this. I hope the gentleman understands that it is a question of how we get to that.
Let me make a couple of comments. I believe this is better for Federal employees in the sense that the new OMB circular A-76 allows the government instead of just providing cost estimates that are compared against competition among the private sector, it almost puts the government at a disadvantage. This allows them to compete on the same field. It allows them to be more innovative in competing with the outside companies, and I think, therefore, more likely to prevail. Government basically has a chance to respond to the private sector on the same grounds, something they do not get under the current A-76 circular and something in our hearings has been something they have complained about. That is thrown out the window with the gentleman's amendment.
Secondly, since OMB circular A-76 is not a regulation but it is simply an OMB circular, OMB can put out another provision tomorrow with minor revisions that we cannot touch. It could be worse, it could be better, but they do not have to go through the hearing process that they did by law to arrive at the conclusion they did here. So they could come back, issue a new circular tomorrow that would be very similar, could be more onerous, and we could not stop that, and that is also a fear I have.
Right now we are in a mode where we are working with them where they are communicating with us, where they are making changes and reacting to some of the results of our hearings and congressional input. I fear if this goes, that the executive branch will exercise their prerogatives and will move ahead in something that I think could be more disadvantageous to Federal employees.
Finally, this process is fair in the sense that if the private vector wins a competition, the contractor has to give any displaced Federal employees a right of first refusal for jobs. The process provides for a 10 percent cost evaluation adjustment to the incumbent services provider, Federal employees in most instances, and Federal employees offers do not have to comply with small business requirements or in many cases have their past performance evaluated. Private sector companies do.
This is not about campaign contributions. I would add to the gentleman on the other side, contributions from unions have gone to the people who are for this amendment and for other dissimilar amendments. There are interest groups on all side of this issue, but let us do what is right for the taxpayers, let us do what is right for this country. Let us defeat the Van Hollen amendment.
Mr. Chairman, I do not know where to start with my friend from Florida on this. I guess we can compare endorsements of his position on this and mine. He has listed a group of unions, some of them Federal employee unions, some who have nothing to do with Federal employment who are interested, obviously, in protecting their membership. We understand that, and that is a noble purpose.
Our purpose here is not to protect contractors; it is not to protect employees. It is to protect the taxpayers. And that is what competitive sourcing is all about, and trying to do it in an appropriate way that does not destroy the Federal workforce. In some cases, as I have said before, I am not comfortable with every aspect of what the administration has done. But we are working hard and we have language in this underlying legislation that addresses some of those concerns.
The Aerospace Industries Association, the American Congress on Surveying and Mapping, American Electronics Association, U.S. Chamber of Congress, American Institute of Architects, Associated General Contractors of America, Business Executives for National Security, Contract Services Association of America, Design Professionals Coalition, Electronic Industries Alliance, and I can go on and on with National Defense Industrial Council and the National Federation of Independent Businesses support and oppose the gentleman's amendment. So we have groups on both sides that add value to this, and our job is to try to synthesize this.
Last year, I was part of a group in the House that struck down the administration's quotas, their goals that they were going to go out and competitively source a certain percentage. I thought that was wrong. I thought that was an overreach. I thought they were biting off more than they could realistically chew and manage. And I think in some cases where they are today that issue can be addressed, but I do not think the gentleman's amendment addresses those concerns.
This would hamstring the Office of Management and Budget's new competitive sourcing process that was arrived at after weighing 700 comments, after going through the union recommendations of a council that included labor leaders and other government personnel.
Competitive sourcing, also known as public-private competition, is simply a process of determining if the government's commercial functions, like computer services, food services or maintenance, should be performed by Federal agencies or by private sector companies. Our job is to try to get the best services for the taxpayer, the best value, the lowest-cost value, the overall best value. One of the problems with the gentleman's amendment is it strikes at the heart of best-value determinations.
The Hastings amendment limits the agency's use of best value in determining whether a commercial function should be performed in-house or by the private sector. This does not make sense in my judgment, because under our acquisition system, the government buys its more sophisticated goods and services using this best-value method. It permits the government to consider quality as well as cost, and that helps Federal employees, because the quality element has to be clearly set forth in the solicitation. And cost, of course, has to be a factor, but value is not new. It has been used for decades by the government, and it makes no sense to limit its use here.
Our Federal employees ought to be able to use their experience and their expertise in high-quality performance to their advantage in public-private competition, and the gentleman's amendment takes that away. That is a concern. I think it is well meaning, but I think it takes away the advantage that incumbents who were performing this have in terms of quality. Commercial entities and private citizens would not buy services without considering the quality, so why should the government? And the gentleman's amendment strikes that.
Now is not the time to tinker with these revisions in this setting, in my opinion. Again, the revisions are the product of more than 2 years of efforts. Seven hundred comments were considered in the development of the new procedures. They incorporated the core recommendations of the Commercial Activities Panel. This panel, again, headed by the Comptroller General in a year-long effort, reviewed the competitive sourcing process, which was clearly flawed, and which all sides, from Federal employees to contractors to
taxpayers, everyone felt it was flawed and needed revamping. They issued recommendations, this panel did, for comprehensive changes to the process. These efforts resulted in the revisions to Circular A-76, which the gentleman now wishes to strike. It was issued on May 29.
We have held hearings on this. I have some concerns, as the gentleman does, about this as well; but I would rather not throw literally the baby out with the bath water, good things like competitive sourcing that come with this. We recently held a hearing to examine the recent revisions to the competitive sourcing A-76 process, and the Comptroller General testified that significant savings result no matter who wins the competition.
The Office of Management and Budget has just submitted a report to Congress on the methods used by the administration to measure agency progress in implementing the competitive sourcing initiative. OMB has pledged to keep Congress fully apprised of that progress and to conduct the initiative in an open and transparent manner. Let us give them a chance.
And, again, we have put some underlying language in this bill that puts some strict reporting requirements on the costs to the government of competitive sourcing so we can come back and properly evaluate this. This is something we did not have before.
The Hastings amendment derails the administration's efforts to increase the efficiency of government operations. You can say you are for efficiency, you can say you are against wasteful spending, but if you cannot compare how the government is providing a service to how someone else may be able to provide that same service, I do not know how you get at the waste, fraud and abuse. Because waste, fraud and abuse does not come in neatly tied packages in line items and budgets. It is marbled throughout the bureaucracy in the way we do business.
Competitive sourcing, particularly the new A-76 Circular, gives our government employees an opportunity to compete on an even basis under the Federal Acquisition Regulation, something they cannot do now. Right now they have to come up with projections and respond to competitive sourcing on the part of the private sector; the private sector winner is then compared against the government price. This allows them to compete even up, to be more innovative, and to, in many cases, improve the way employees deliver that service.
In my experience, I have found that some of the best savings and efficiencies we get do not come from the managers in the Federal Government or the higher-ups. They come from that employee out the window who is doing the job every day that may come up with that key idea or innovation in the way we can do this.
The new A-76 circular takes that into account and basically gives additional empowerment to that employee at the window to be able to come forward with their ideas and incorporate those into the government bid. Under the old circular, that was not really the case.
I understand the gentleman's frustration. I think all of us feel a frustration, as I have said before. Our concern is constant competitive sourcing can hurt the recruitment and retention abilities to develop a strong Federal workforce, and yet it is a useful tool that needs to be employed. I think perhaps it has been overemployed. There are probably costs that we are not aware of at this point, but we have tried to get at this with underlying language, but I think the gentleman's amendment goes too far.
We want to harness the benefits of competition to produce superior performance for the taxpayer, regardless of who performs the service because at the end of the day, our job is to make sure that taxpayers are getting the best value for their dollar. The gentleman's amendment undermines our ability to do that, so I urge we vote against the Hastings amendment.