Spending Bill Puts Kibosh on Federal Competitive Sourcing

As if this news wasn’t bad enough, the federal competitive sourcing initiative—estimated to have saved U.S. taxpayers over $7 billion since its inception in 2003—is now officially on its death bed, thanks to provisions buried in the $410 billion omnibus spending bill approved by the Senate yesterday. According to Government Executive:

Competitive sourcing, one of the Bush administration’s most controversial government reform policies, could be coming to an end.

The 2009 omnibus appropriations bill, which passed the Senate on Tuesday, includes a provision prohibiting the use of funds governmentwide to study or hold a public-private job competition for the remainder of fiscal 2009. Sen. Richard Durbin, D-Ill., and Rep. Jose Serrano, D-N.Y., introduced the measure.

Although the omnibus halts job competitions through the end of the fiscal year on Sept. 30, it does not kill competitive sourcing, which would require further legislation.

The bill also requires civilian agencies to review current contracts and issue guidelines for considering whether new projects can be performed by federal employees, or if previously outsourced work can be brought back in-house.

Criteria for jobs subject to insourcing include: those outsourced without competition or performed by a federal employee during the past decade, jobs closely aligned with an inherently governmental function, or judged by a contracting officer to have been performed poorly “because of excessive costs or inferior quality.” The provision does not apply to Defense Department contracts.

President Barack Obama is expected to sign the bill.

Read the whole thing. Reason will have a lot more to say as this develops, but suffice to say, taxpayers are poorly served when politicians adopt policies to undermine competitiveness and efficiency in government for what are clearly political aims. My own thoughts on this tend to align with those of one of the commenters on this story:

[…] The unions have been vociferous in denigrating the benefits of competitve sourcing solely because of its potential impact on their members – and the public be damned. One of the most interesting outcomes demonstrating the value of this Bush administration initiative was seen in the apparently paradoxical outcome that well over 80% of the public – private competitions resulted in wins for “most efficient organization” (MEO) in-house government teams. The primary reason for this, however, is illuminating. The in-house MEO proposals won overwhelmingly because they submitted bids that drastically slimmed down costs and staff required to perform work that previously was far more inefficiently accomplished. This is a sad commentary on Federal managers in particular. It is their responsibility to carry out their functions in the most efficient and effective manner possible; yet it was only under the “gun to the head” threat of outsourcing that they reluctantly were forced to acknowledge in effect that their work units had not been run on anything like an efficient basis, and had to come up with MEO proposals which, de facto, recognized this state of affairs. This was a real black eye for the Federal management cadre, which now, however, won’t have to worry about the outsourcing “sword of Damocles” over their copllective heads any longer and can go back to the old easy (and inefficient) ways of doing things. And the taxpayers get it in the neck yet again.

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