Federal Job Competitions Save $1.25B in 2004

Here’s yet another example of the benefits of competition from GovExec.com:

“The Office of Management and Budget is set to report that savings from job competitions between federal employees and private workers grew to about $1.25 billion in 2004 from $1.1 billion in 2003, according to people who have seen figures provided by the agency. Those figures represent the projected savings over three to five years for the competitions held in each fiscal year.

In an off-the-record meeting with contracting groups last week, David Safavian, head of OMB’s Office of Federal Procurement Policy, said 80 to 90 percent of competitions are still being won by in-house teams. He provided preliminary estimates of the savings OMB is expected to announce officially on Saturday.

The roughly $1.25 billion in savings translates into about $20,000 per full-time equivalent employee. The savings were likely from a combination of restructuring and eliminating positions, as well as other factors.”

Obviously this is great news for taxpayers. And with over 80% of competed jobs staying in-house, one would hope that this would send a message to public employees unions that their fears and rhetoric about competition are overblown. Of course, Reason has been on top of this issue. Check out this recent policy brief for some perspective on competitive sourcing, and drop by Reason’s Federal Government Reform Resource Center for more of our work on the topic.