Out of Control Policy Blog

Federal Anti-Outsourcing Measure Scuttled

...but lawmakers still want to make it more difficult to achieve the President's competitive sourcing goals. From the Federal Times:

    Democrat and Republican lawmakers have struck a deal to scuttle a controversial anti-outsourcing measure contained in a House-passed spending bill.

    The measure, sponsored by Rep. Chris Van Hollen, D-Md., is contained in the Transportation spending bill and has prompted an administration veto threat because it would effectively stop agencies from subjecting federal jobs to possible outsourcing.

    Capitol Hill, industry and union officials familiar with the negotiations say House and Senate lawmakers agreed to eject the Van Hollen measure from the House-Senate conference report and replace it with a measure considered less destructive to the Bush administration's plan to open federal jobs to possible outsourcing.

    The Senate passed its version of the 2006 Transportation, Treasury and Housing and Urban Development spending bill Oct. 20, and both chambers are heading for a conference to reconcile the differences between the two versions.

    House and Senate lawmakers agreed to include in the conference report a Senate-passed provision that would bar agencies from awarding more than 10 federal jobs to a contractor unless its bid is cheaper by $10 million or 10 percent – whichever is lower – below the federal team's bid.

    . . .

    OMB threatened a presidential veto of the Transportation bill if this Senate provision is left intact, saying it would force agencies to decide competitions based on cost only.

    "By marginalizing the consideration of quality, this provision would weaken competitive sourcing as a management tool to achieve the best overall value for the taxpayer," OMB said in an Oct. 19 statement to the Senate.

See Reason's 2005 Annual Privatization Report for the latest data on the federal competitive sourcing front. With $2.5 billion in savings over the next several years, and a return of $20 for every $1 spent on competitive sourcing, the effort has generated impressive results to date. Taxpayers stand to lose if the Senate provision stays and a veto is not forthcoming.

Leonard Gilroy is Director of Government Reform


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