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50th Anniversary of Competition in Federal Government

Geoffrey Segal
January 9, 2005, 9:26am

Saturday marks the 50th anniversary of the federal government's initial policy statement on the use of private enterprise. On January 15, 1955 President Dwight Eisenhower issued Bureau of the Budget (now the Office of Management and Budget) Bulletin 55-4 to declare that the federal government should rely on the private sector for goods and services. More directly the policy stated, that: "(I)t is the policy of the Government of the United States to rely on commercial sources to supply the products and services the government needs. The Government shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source." The directive had one goal: avoid direct competition with the private sector. Even while this policy has been supported and applied by every administration since, today, more than 800,000 federal employees are in jobs that the agencies themselves consider "commercial" in nature – like cutting grass on federal property and writing software – these, and countless others are readily available in the private economy. Upon entering office President Bush initiated an ambitious plan to subject these jobs to competition from the private sector. Competitive sourcing, as Bush's plan is known as, may be a slight departure from the intent of the Eisenhower bulletin, but it is still good for taxpayers. In 2003, competitive sourcing saved taxpayers $1.1 billion. On the 50th anniversary of the policy, it is time to recommit to the 1955 Eisenhower policy.


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