Out of Control Policy Blog

Where Now for Federal Privatization?

Stan Soloway at Washington Technology offers an insightful take on President Obama's recent memo on federal contracting:

Nowhere is there any discussion about extending his philosophy of accountability, efficiency and performance to internal agency activities. Instead, it’s all about contracting. There seems to be an assumption that contractors are an evil to be tolerated rather than an important partner with whom to collaborate. It’s almost as if things would be better if we could just get back to the good old days, whatever those were. But this isn’t the 1960s, and for many reasons, the face of government has changed.

Already this year, we’ve seen several — generally one-sided — hearings on the role of contractors and challenges in federal acquisition. Legislation has been introduced to prohibit any A-76 or competitive sourcing studies and establish a governmentwide preference for “in-sourcing,” which would enable agencies to bring contracted work back into the government without benefit of any cost, performance or other analytical rationale. Sen. Barbara Mikulski (D-Md.), who as far as I can tell has never hidden her disdain for federal contractors, said the bill would “level the playing field for federal employees.” It doesn’t level the playing field; it obliterates it. And it flies in the face of the management philosophy Obama has set forth.

The president has set in motion a series of activities designed to enhance competition, government performance and accountability, all on behalf of the taxpayers. for whom the real question is whether and how well the government delivers; whether it's by federal employee or contractor makes no difference. We owe the taxpayers the benefit of an intellectually honest, consistent and analytically sound process that can achieve the president's goals. Then, let the chips fall where they may.

This also caught my eye yesterday:

Obama has talked about shifting government work away from contractors and bolstering the acquisition workforce to do more government work in-house. He also wants to shift toward fixed-price contracts and increase competition for contracts.

This should go without saying, but you can't do both. Shifting government work away from contractors and bringing these functions in-house will necessarily limit competition, an outcome completely at cross-purposes with the other goal of increasing competition for the contracts that are left over. One way for President Obama to demonstrate his committment to transparency and performance is to ignore the anti-privatization ideologues in Congress and start an open and honest debate on best practices in competitive service delivery.

In a pre-election debate, the President said that we need to apply a scalpel to the federal budget rather than use the crude tool of across-the-board spending cuts. But on federal contracting, the administration appears to have some crude tools of its own—arbitrary reductions in contracting, protective halos around federal jobs just because they're federal jobs, etc. The President should follow his own advice and apply the scalpel by just letting federal employees compete. Taxpayers get shortchanged when government workers get a free pass.

With the current economy, now is the time to place all viable options on the table, not put the strong tools you don't like back into the box.

Leonard Gilroy is Director of Government Reform


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