[Congressional Record Volume 143, Number 34 (Monday, March 17, 1997)]
[Senate]
[Pages S2337-S2339]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FREEDOM FROM GOVERNMENT COMPETITION ACT

  Mr. THOMAS. Mr. President, I have a couple of things I wanted to 
visit about this morning. The first one of the priorities that I and a 
number of people have for the 105th Congress is S. 314, the Freedom 
From Government Competition Act.
  This is an effort, along with many other things, to seek to reduce 
the size of the central Government, which most people agree we should 
do. It is one of the reasons we try to have a balanced budget 
amendment, so that we can control the size of the growth of the Federal 
Government by our willingness to pay for it.
  One of the other areas, of course, that we have been very interested 
in, and continue to be, is the idea of ``devolution''--kind of a new 
word. It means move some of the functions down to State and local 
governments so that we do, in keeping with the Founding Fathers, keep 
the size of central Government relatively limited and do those things 
that are essential to be done on the national level, and there are 
many, and yet not do the things that could better be done either at the 
local level in government or, indeed, in the private sector. The 
private sector is what I want to talk about a little today.
  In general, from the title, we are simply saying that we want to 
remove the

[[Page S2338]]

competition of the Federal Government in those things that could as 
well or, indeed, better be done in the private sector. So S. 314 is 
called the Freedom From Government Competition Act. This bill is 
supported by a broad cross-section of business groups, and I have a 
list of those.
  I ask unanimous consent to have the list printed in the Record, along 
with several letters of endorsement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     Groups Supporting the Freedom From Government Competition Act

     National Federation of Independent Businesses (NFIB).
     U.S. Chamber of Commerce.
     Associated General Contractors of America (AGC).
     National Association of Women Business Owners.
     American Consulting Engineers Council (ACEC).
     ACIL (Formerly the American Council of Independent 
         Laboratories).
     Business Coalition for Fair Competition (BCFC).
     Business Executives for National Security (BENS).
     Contract Services Association.
     Design Professionals Coalition.
     Management Association for Private Photogrammetric Surveyors 
         (MAPPS).
     Procurement Roundtable.
     Professional Services Council (PSC).
     Small Business Legislative Council.
                                                                    ____

                                            National Federation of


                                         Independent Business,

                                Washington, DC, February 11, 1997.
     Hon. Craig Thomas,
     U.S. Senate, Washington, DC.
       Dear Senator Thomas: On behalf of the 600,000 members of 
     the National Federation of Independent Business (NFIB), I 
     commend you for introducing the Freedom From Government 
     Competition Act of 1997.
       Today government agencies are competing against small 
     businesses in an increasing number of areas. Virtually all 
     goods and services offered by government agencies are 
     available from the private sector, which provides them more 
     efficiently. Small business owners who face government 
     competition spend thousands of dollars to develop their 
     businesses, while their federally funded competitors are tax 
     exempt.
       NFIB opposes the government's commercial activities that 
     compete directly with small firms in the private sector. In 
     fact, in a recent survey, 70 percent of small business owners 
     expressed their opposition to government agencies being 
     allowed to compete against private businesses. Additionally, 
     unfair government competition was one of the top 
     recommendations of the 1995 White House Conference on Small 
     Business.
       Your legislation would allow small businesses to compete 
     fairly, and allow small business to do what they do best, 
     create new jobs and grow the economy, while still providing a 
     quality product in an efficient manner.
       NFIB strongly supports your legislation and stands ready to 
     assist you to stop the practice of unfair government 
     competition against our nation's small businesses.
           Sincerely,

                                                   Dan Danner,

                                                   Vice President,
     Federal Governmental Relations.
                                                                    ____

                                            The Associated General


                                       Contractors of America,

                                    Washington, DC, March 7, 1997.
     Hon. Craig Thomas,
     Washington, DC.
       Dear Senator Thomas: The Associated General Contractors of 
     America (AGC) thanks you for your leadership on the Freedom 
     from Government Competition Act of 1997, S. 314. AGC strongly 
     supports the concept that the government should not compete 
     with its citizenry. Full and open, fair competition provides 
     low cost, highly qualified contractors for government work.
       Contracting out government procurement more effectively and 
     efficiently utilizes taxpayer dollars. This bill will 
     encourage the growth of small business and further the 
     competitiveness of large business. In determining commercial 
     areas in which the government unfairly competes with the 
     private sector, common sense outsourcing decisions will be 
     made using the process outlined in the bill.
       Sound public policy, however, dictates that the government 
     must maintain its stewardship role to safeguard fairness of 
     competition. Oversight of the outsourcing program, ensures 
     that the end result is fair competition. Successful examples 
     of this type of oversight can be seen in the contracting 
     actions of the General Services Administration's Federal 
     Building Fund, U.S. Army Corps of Engineers, and the Naval 
     Engineering Facilities Command.
       AGC stands ready to assist as you to continue your efforts 
     to establish free market competition. Your invaluable 
     leadership on this issue will be needed as Federal Government 
     allows the entrepreneurial spirit to flourish.
           Sincerely,
                                              Stephen E. Sandherr,
     Executive Vice President.
                                                                    ____

                                           National Association of


                                        Women Business Owners,

                                Washington, DC, February 27, 1997.
     Hon. Craig Thomas,
     U.S. Senate, Washington, DC.
       Dear Senator Thomas: Today government agencies are 
     competing against small businesses in an increasing number of 
     areas. Virtually all goods and services offered by government 
     agencies are available from the private sector, which 
     provides them more efficiently. Small business owners who 
     face government competition spend thousands of dollars to 
     develop their businesses, while their federally funded 
     competitors are tax exempt.
       Your legislation would allow small businesses to compete 
     fairly, and allow small business to do what they do best, 
     create new jobs and grow the economy, while still providing a 
     quality product in an efficient manner.
       On behalf of the members of the National Association of 
     Women Business Owners (NAWBO), I commend you for introducing 
     the Freedom From Government Competition Act of 1997.
       NAWBO opposes the government's commercial activities that 
     compete directly with small firms in the private sector. In 
     fact, in a recent survey, 70 percent of small business owners 
     expressed their opposition to government agencies being 
     allowed to compete against private businesses. Additionally, 
     unfair government competition was one of the top 
     recommendations of the 1995 White House Conference on Small 
     Business.
       NAWBO strongly supports your legislation and stands ready 
     to assist you to stop the practice of unfair government 
     competition against our nation's small businesses.
           Sincerely,
                                                      Terry Neese,
                             Corporate and Public Affairs Liaison.

  Mr. THOMAS. Let me just go over some of these folks who do support 
it: National Federation of Independent Businesses, U.S. Chamber, 
Associated General Contractors of America, National Association of 
Women Business Owners, Consulting Engineers Council, Business Coalition 
for Fair Competition, Design Professionals Coalition, and many others.
  So it is designed to say basically that in those areas of Government 
activities and Government operations, for those things that are done 
that are basically commercial, there ought to at least be an 
opportunity for the private sector to compete. It is designed to open 
the potential market of $30 billion nationally for businesses, for the 
private sector, both large and small. And as a matter of fact, most of 
the contracts would go to small business.
  It is designed to level the playing field--those are words we use a 
lot, but they have meaning--for thousands of businesses in the whole 
economy of this country from the very ordinary kinds of things to high-
technology things--janitorial services, hospitality and recreation 
service businesses, engineering services, laboratory and testing 
services.
  As a matter of fact, I really became involved in this in the 
legislature in the State of Wyoming where we had government competing 
for laboratory services, where the private sector was available there 
to do that with the same kind of quality or even better and at less 
cost. So that is what we decided to do.
  It will provide for better value to taxpayers because it capitalizes 
on talent and expertise available in the competitive private sector. It 
has been Federal policy for a very long time--as a matter of fact, some 
40 years--that contracting out to the private sector would be, indeed, 
a function of the Federal Government, but the fact is that it has not 
really worked out that way. So we need a legislative solution. We say 
we are going to do it, but we do not do it. And I understand that. Part 
of the reason, of course, is that in an agency you have your own 
operation and your own staff and would prefer to do it.
  The other is often when there has been some effort to try to 
determine the efficiency of it, we find that testing is really not very 
fair and so you end up saying, well, Government can do it cheaper, but 
you have not really analyzed it in a very fair way.
  We have a lot of things that the Federal Government should be doing, 
and they take too much time and money on goods and services, in my 
view, that could better be delivered by the private sector.
  The Congressional Budget Office has estimated in the past that 1.4 
million Federal employees do work that is basically commercial in 
nature. This competition, of course, is tougher on the private sector. 
It kills small business, stifles economic growth, and lowers the tax 
base, particularly in States such as mine where 50 percent of the

[[Page S2339]]

State belongs to the Federal Government, and it is difficult to keep 
the private sector and the tax base going. It hurts small business. So 
it has been a concern of small business.
  We have had White House small business conferences in 1980, 1986, and 
1994, and in all three of these conferences this has been the major 
concern.
  Let me just briefly explain the bill. I indicated that for some 
time--like 40 years--we have had a policy to do contracting, to bring 
the private sector in to do things, but they really have not done that. 
So we are now saying statutorily there is a system for giving small 
business that opportunity. It does not say that it has to do that. It 
says that when there is a commercial activity, the private sector 
should be given an even chance to see if they can do it more 
efficiently than the Government. And there are exceptions to that, of 
course. There are legitimate, inherent activities of Government, and 
those will be the exceptions--national security, where the Federal 
Government can provide a better value, and we recognize that that can 
be. We are not asking that it be given to the private sector if, 
indeed, the Federal Government agency can do it more efficiently, or in 
the case, of course, where the private sector cannot provide the goods 
and services.
  So this bill establishes a system and a process where the Office of 
Management and Budget in the executive branch will identify those 
Government functions that are ``inherently and basically commercial in 
nature.''
  It also establishes an Office of Commercial Activities within OMB to 
implement the bill. So now you do not have the agency that is going to 
do the contracting making the decision as to whether they do it or not.
  There will be an outside effort made to identify the functions that 
could best be done that way and to establish provisions for the 
transition of Federal employees if there should be some reduction 
there.
  The climate, I think, is right for action of this kind. Almost 
everybody agrees we ought to direct the money, if we can save money by 
better Government--there are lots of underlying issues, whether it be 
defense, whether it be health care, whether it be Medicare--to where we 
can better use those dollars rather than doing the things that someone 
else could do more efficiently.
  The Senate was in support of the concept of this bill; last year, the 
Senate voted 59 to 39 in favor of a Treasury-Postal appropriations 
amendment that would have prevented unfair Government competition. It 
was dropped, unfortunately, from the omnibus appropriations bill.
  If we are going to balance the budget, we are going to have to make 
some fundamental changes. The Federal Government operating commercial 
needs is one that we can change and eliminate and reduce. Various 
studies indicate that we could save up to $30 billion by utilizing 
private sector resources. The Heritage Foundation estimates we could 
save $9 billion annually. The Defense Science Board concluded the 
Defense Department alone could save $30 billion annually.
  So, the Freedom From Government Competition Act will help to create 
jobs in the private sector, help open up markets to private business, 
save billions of dollars and make Government more efficient. I 
certainly commend this bill to my associates here in the Senate, to see 
if we could not make a way to increase and strengthen the private 
sector as well as save money to be used on these things that are 
fundamentally Governmental in nature.

                          ____________________