[Congressional Record (Bound Edition), Volume 149 (2003), Part 23]
[Senate]
[Pages 31814-31817]
[From the U.S. Government Publishing Office, www.gpo.gov]




 ADMINISTRATION EFFORTS TO GUT THE ``COMPETITIVE SOURCING'' COMPROMISE

  Mrs. MURRAY. Mr. President, I rise to alert my colleagues and the 
public to a secret effort by the White House to quash the rights and 
eliminate the jobs of thousands if not millions of Federal workers.
  Right now, the White House is actively working behind the scenes--in 
closed-door meetings--to reverse a bipartisan agreement that House and 
Senate appropriators reached just 12 days ago. And I regret to say, the 
President's operatives appear to be succeeding.
  I rise to expose these backroom efforts because I believe all 
taxpayers should be made aware of the White House's efforts.
  If the White House prevails in this scheme, Federal jobs could be 
contracted out even if it costs taxpayers more money, Federal workers 
will have to compete to keep their jobs with their hands tied behind 
their backs, and Federal workers will not be able to appeal a decision 
to contract out their job while private companies can appeal a decision 
that doesn't go their way.
  If the White House gets everything it wants, Federal workers could 
actually lose their jobs and see that work shipped overseas. This 
administration has sent enough good American jobs overseas. It is 
outrageous that this White House is now questioning our agreements 
which ensure that the work of the American Government is done by 
workers here in America.

[[Page 31815]]

  When it comes to allowing Federal workers to compete to keep their 
jobs, the White House does not want a level playing field. That's why 
they're engaging in all these backroom deals, and that's why the White 
House has seen to it that the bipartisan Transportation/Treasury 
conference report has never been filed.
  What kind of Federal workers am I talking about here? I am talking 
about people who protect our borders and keep terrorists off U.S. soil; 
people who purchase and maintain equipment for our troops, both here 
and overseas; people who help us get the Social Security checks, or 
price support payments, or unemployment insurance payments that we are 
eligible for; people who make sure our food is safe; and many, many 
more.
  These are hard-working Americans that serve the taxpayer everyday and 
deserve a fair shot at keeping their jobs. But, as my colleagues know, 
for some time the Bush administration has been trying to eliminate 
Federal jobs through what it calls ``competitive sourcing.'' This 
policy is highly controversial and with good reason.
  Just look at what happened to Federal employees of the Defense 
Finance Accounting Service in Ohio: Their work was contracted out to a 
company in Dallas, TX in January 2002; then the Pentagon's inspector 
general found that the move saved no money and actually cost the 
taxpayer an additional $20 million; and now that work is being shipped 
to yet another contractor.
  So this entire policy of contracting out Federal work needs much more 
scrutiny and oversight. But instead of allowing a balanced set of rules 
to be put in place to avoid the situation I just described, the Bush 
administration is working to undermine it.
  Let me review some of the recent events to show why this effort by 
the White House is so disturbing. On May 29 of this year, the Bush 
administration issued revisions to OMB's Circular A-76. This is the 
circular that dictates the terms and conditions through which executive 
agencies can privatize activities currently performed by Federal 
employees.
  These revisions were highly controversial and were designed in many 
ways to undermine the efforts of Federal employees to keep their jobs. 
The fairness of these revisions was questioned, and not just by 
Democrats and the Federal employee unions. Several House and Senate 
Republicans identified flaws, including the chairmen of the relevant 
authorizing committees and subcommittees.
  When the Transportation, Treasury and General Government 
Appropriations bill was brought to the House Floor, Representative Van 
Hollen offered an amendment to address these flaws. The Van Hollen 
amendment was adopted on a bipartisan vote of 220-198. The Van Hollen 
amendment effectively suspended the President's new OMB circular. It 
required any contracting out activities to be conducted according to 
the older A-76 rules. Immediately, the White House threatened a veto, 
so the Senate took a different approach.
  During Senate debate, we adopted an amendment offered by Senator 
Mikulski and Senator Collins, the authorizing committee chairman. The 
Senate also adopted an amendment offered by Senator Thomas and Senator 
Voinovich, the authorizing subcommittee chairman.
  The substance of both amendments centered on putting some basic 
fairness into the contracting out process--especially the process 
through which Federal employees and private contractors submit bids to 
retain Federal work and how those bids are compared. In some cases, the 
amendments reflected language that the President had already signed 
into law or that the Congress had already adopted on the Department of 
Defense and Department of Interior appropriations bills.
  When the conference committee convened to reconcile these two very 
different bills, we all recognized that the Van Hollen amendment could 
not be included in the conference report because of the President veto 
threat, so we put together a thoughtful and fair compromise. Our 
compromise was designed to provide a level playing-field between 
Government contractors and Federal employees. Our compromise ensured 
fairness in five ways.
  First, the compromise ensured that the rules pertaining to all the 
Federal agencies would be the same. Second, the compromise ensured that 
the administration would have to demonstrate that there are real cost 
savings that would result from a privatization effort before Federal 
employees lost their jobs to the private sector. Third, the compromise 
ensured that Federal employees--and not just private contractors--would 
have the opportunity to appeal a potentially wrongful decision to 
contract out work. Fourth, the compromise ensured that no jobs that are 
contracted out would be transferred overseas. And fifth, the compromise 
ensured that Government employees have the opportunity to put together 
their best and most efficient bid in order to compete to keep their 
jobs.
  In other words, they do not just need to submit a bid based on the 
way they currently operate. They could propose new efficiencies to make 
their bid competitive so that all taxpayers benefit.
  As I said, this was a thoughtful, carefully crafted compromise in 
which neither side got everything they wanted.
  Mr. President, I ask unanimous consent that at the conclusion of my 
remarks, the bill language reflecting this bipartisan compromise be 
printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mrs. MURRAY. Mr. President, I am placing this language in the Record 
because I have been given reason to believe that some very different 
language will appear in the omnibus appropriations act, once it is 
actually filed.
  A lot of credit belongs to Chairman Istook, Chairman Stevens, and 
Chairman Shelby for allowing the conferees on the Transportation/
Treasury bill to work through the issues and develop our original 
compromise.
  When I left the Capitol building late in the evening on Wednesday, 
November 12, all the conferees expected that compromise to be 
incorporated into the conference agreement on the Transportation/
Treasury bill that was to be filed the next day. Each and every 
Senator, Republican and Democrat, that participated in that conference 
agreement was content with the compromise and signed the conference 
report. What has happened since then has been one of the most 
astonishing and deplorable process that I have ever witnessed in my 11 
years in the Senate.
  When the Bush White House learned that the conferees decided to 
insist upon a level playing field and some demonstration of taxpayer 
benefits for Federal jobs to be contracted out, they began a quiet but 
relentless campaign to the gut the compromise. Despite the fact that 
the conference committee adjourned well over a week and a half ago, the 
White House has seen to it that the bipartisan conference agreement has 
not been filed in either the House or Senate while they work to 
emasculate the compromise.
  The administration's alternative language makes their true motives 
clear. One language change that the Bush administration has been 
promoting would effectively eliminate the requirement that the 
administration demonstrate any cost savings before throwing Federal 
employees out onto the unemployment line. Indeed, the loophole language 
they are promoting would allow them to award Federal work to private 
contractors even if the contractor's costs are considerably higher than 
letting Federal employees keep the work.
  Could it be that we are seeing yet another attempt by the Bush/Cheney 
administration to use Federally appropriated resources to reward their 
friends?
  I am told that the administration has even voiced reservations about 
the language in our compromise prohibiting Federal jobs from being 
shipped overseas. Where does it stop.
  This administration seems to see no problem with senior citizens 
picking up a phone to call Social Security Administration and the phone 
being answered by a Federal contractor in India--and it could actually 
cost taxpayers more. That's absurd.

[[Page 31816]]

  On another provision, the administration is objecting to language 
allowing Federal employees to put forward their best and most efficient 
bid in order to keep their jobs. Why? Because the administration 
doesn't want Federal employees to retain this work no matter what the 
benefit to the taxpayer.
  This is the first year that I have served as the senior Democrat on 
the Appropriations Subcommittee overseeing these government-wide 
procurement issues. Over the course of this year, I have been 
increasingly appalled by the disrespect and disdain that the Bush 
administration holds for the thousands of Americans that come to work 
for our Government every day.
  As of today, I regret to inform the Senate that the Bush 
administration appears to be making meaningful progress in its campaign 
to gut the bipartisan compromise that was agreed to as part of the 
Transportation/Treasury conference.
  My subcommittee staff was present with language that was intended to 
be included in the omnibus appropriations bill. That language guts our 
original compromise in three fundamental ways.
  First, the rules included in the Transportation/Treasury bill will no 
longer apply to all Federal agencies. They will only apply to the 
agencies funded in the Transportation/Treasury bill. So these 
provisions will apply only to jobs being contracted out in the 
Department of Transportation, the Treasury Department, the General 
Services Administration, the Office of Personnel Management, and a few 
smaller, related agencies.
  None of these protections will apply to the hundreds of thousands of 
employees in the other major Federal civilian agencies, such as the 
State Department, Commerce Department, Agriculture Department, Labor 
Department, and the Health and Human Services Department. There will be 
a distinctly different set of rules for jobs in the Department of the 
Interior and still different rules for jobs in the Department of 
Defense.
  This makes a sham of our Federal contracting-out policy, but the Bush 
administration certainly doesn't seem to care.
  The first major change is in the scope of the agreement. Instead of 
applying to all civilian agencies, it would just apply to a few. The 
second major change undermines the fairness of our agreement. The 
language being slipped into the omnibus bill would now deny Federal 
employees the legal standing to appeal a wrongful decision to contract 
out their jobs. Under current regulations, only contractors can appeal 
a decision that doesn't go their way. Federal employees who are losing 
their jobs have no such right.
  The administration obviously does not want its decision to ever face 
a truly fair appeals process.
  The third major change effectively eliminates the requirement that 
there be any meaningful cost savings to the taxpayer before jobs are 
contracted out. That is deplorable.
  No wonder the Bush administration will only push for these changes in 
back rooms.
  I think this result is bad enough. However, I am now being told that 
the administration has not given up on weakening our provision even 
further.
  As I stand here today, the conference agreement on the omnibus 
appropriations bill, including the Transportation/Treasury section, has 
still not been filed. The back-room dealing continues and the basic 
principle of fairness and respect for our Federal employees continues 
to be under attack.
  I have to say that in my many years on the Appropriations Committee, 
I have never witnessed such a cynical effort to undermine a fair and 
equitable conference agreement.
  I want to emphasize that it is not the fault of Chairman Istook, 
Chairman Shelby, Chairman Stevens, Chairman Young, or any of the other 
members of the Transportation/Treasury conference. Those honorable 
gentlemen reached a deal at the conference room table and, I believe, 
had every intention of standing by our compromise.
  This attack on Federal workers, on fairness and on taxpayers has only 
one source--the administration of George Bush. It is the White House 
that is keeping our compromise from being enacted--or even filed--so 
that the American public can read and understand it.
  Next year, I hope that our Transportation/Treasury Subcommittee will 
hold hearings with the appropriate administration officials so that 
they can explain to us why it is so important to them to deny Federal 
employees even the most basic rights when competing to keep their jobs. 
I hope they will explain why it is important to the Bush administration 
that different Federal workers be subjected to a hodgepodge of 
differing rules depending on where they work. Perhaps they could also 
explain why they think it is appropriate that only contractors--and not 
Federal employees--have the right to appeal a ``contracting out'' 
decision.
  This issue will not go away. I can guarantee you that efforts will be 
made on next year's Transportation/Treasury bill to rectify this 
situation and restore a government-wide policy based on fairness and 
savings for the taxpayer.
  I only hope the Bush administration will have the decency to 
articulate its position before the public--and on paper--rather than in 
the back rooms in the dark of night.

                               Exhibit 1


      final a-76 compromise language for conference report on the 
  transportation, treasury and independent agencies appropriations act

       Sec. 7  . (a) Limitation on Conversion to Contractor 
     Performance.--None of the funds appropriated by this or any 
     other Act shall be available to convert to contractor 
     performance an activity or function of an executive agency, 
     on or after the date of enactment of this Act, is performed 
     by more than ten federal employees unless the
       (1) the conversion is based on the result of a public-
     private competition plan that includes a most efficient and 
     cost effective organization plan developed by such activity 
     or function; and
       (2) the Competitive Sourcing Official determines that, over 
     all performance periods stated in the solicitation of offers 
     for performance of the activity or function, the cost of 
     performance of the activity or function by a contractor would 
     be less costly to the executive agency by an amount that 
     equals or exceeds the lesser of--
       (A) 10 percent of the most efficient organization's 
     personnel-related costs for performance of that activity or 
     function by federal employees; or
       (B) $10,000,000.
       (b) Exceptions for the Department of Defense.--
       (1) This section and subsections (a), (b), and (c) of 
     section 2461 of title 10, United States Code do not apply 
     with respect to the performance of a commercial or industrial 
     type function of the Department of Defense that--
       (A) is included on the procurement list established 
     pursuant to section 2 of the Javits-Wagner-O'Day Act (41 
     U.S.C. 47);
       (B) is planned to be converted to performance by a 
     qualified nonprofit agency for the blind or by a qualified 
     nonprofit agency for other severely handicapped individuals 
     in accordance with that Act; or
       (C) is planned to be converted to performance by a 
     qualified firm under at least 51 percent ownership by an 
     Indian tribe, as defined in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)), or a Native Hawaiian Organization, as defined in 
     section 8(a)(15) of the Small Business Act (15 U.S.C. 
     637(a)(15)).
       (2) This section shall not apply to depot contracts for 
     depot maintenance as provided in sections 2469 and 2474 of 
     title 10, United States Code.
       (3) Treatment of Conversion--The conversion of any activity 
     or function of the Department of Defense under the authority 
     provided by this section shall be credited toward any 
     competitive outsourcing goal, target, or measurement that may 
     be established by statute, regulation, or policy and is 
     deemed to be awarded under the authority of, and in 
     compliance with, subsection (h) of section 2304 of title 10, 
     United States Code, for the competition or outsourcing of 
     commercial activities.
       (c) Not later than 120 days following the enactment of this 
     Act and not later than December 31 of each year thereafter, 
     the head of each executive agency shall submit to Congress 
     (instead of the report required by section 642) a report on 
     the competitive sourcing activities on the list required 
     under the Federal Activities Inventory Reform Act of 1998 
     (Public Law 105-270; 31 U.S.C. 501 note) that were performed 
     for such executive agency during the previous fiscal year by 
     Federal Government sources. The report shall include--

[[Page 31817]]

       (1) the total number of competitions completed;
       (2) the total number of the competitions announced, 
     together with a list of the activities covered by such 
     competitions;
       (3) the total number (expressed as a full-time employee 
     equivalent number) of the Federal employees studied under 
     completed competitions;
       (4) the total number (expressed as a full-time employee 
     equivalent number) of the Federal employees that are being 
     studied under competitions announced but not completed;
       (5) the incremental cost directly attributable to 
     conducting the competitions identified under paragraphs (1) 
     and (2), including costs attributable to paying outside 
     consultants and contractors;
       (6) an estimate of the total anticipated savings, or a 
     quantifiable description of improvements in service or 
     performance, derived from completed competitions;
       (7) actual savings, or a quantifiable description of 
     improvements in service or performance, derived from the 
     implementation of competitions completed after May 29, 2003;
       (8) the total projected number (expressed as a full-time 
     employee equivalent number) of the Federal employees that are 
     to be covered by the next report required under this section; 
     and
       (9) a general description of how the competitive sourcing 
     decisionmaking processes of the executive agency are aligned 
     with the strategic workforce plan of that executive agency.
       (d) The head of an executive agency may not be required, 
     under Office of Management and Budget Circular A-76 or any 
     other policy, directive, or regulation, to automatically 
     limit to 5 years or less the performance period in a letter 
     of obligation, or other agreement, issued to executive agency 
     employees, if such a letter or other agreement was issued as 
     the result of a public-private competition conduced in 
     accordance with the circular.
       (e) Hereafter, the head of an executive agency may expend 
     funds appropriated or otherwise made available for any 
     purpose to the executive agency under this or any other Act 
     to monitor (in the administration of responsibilities under 
     Office of Management and Budget circular A-76 or any related 
     policy, directive, or regulation) the performance of an 
     activity or function of the executive agency that has 
     previously been subjected to a public-private competition 
     under such circular.
       (f) For the purposes of subchapter V of chapter 35 of title 
     31, United States Code--
       (1) the person designated to represent employees of the 
     Federal Government in a public-private competition regarding 
     the performance of an executive agency activity or function 
     under Office of Management and Budget Circular A-76--
       (A) shall be treated as an interested party on behalf of 
     such employees; and
       (B) may submit a protest with respect to such public-
     private competition on behalf of such employees; and
       (2) the Comptroller General shall dispose of such a protest 
     in accordance with the policies and procedures applicable to 
     protests described in section 3551(1) of such title under the 
     procurement protests system provided under such subchapter.
       (3) The person designated to represent employees of the 
     Federal Government shall be either:
       (A) the agency tender official who submitted the agency 
     competition proposal; or
       (B) a single individual appointed by a majority of directly 
     affected employees; or
       (C) in the event of a dispute between the two individuals 
     cited in (A) or (B) above, either of said individuals, to be 
     determined by the U.S. General Accounting Office.
       (g) An activity or function of an executive agency that is 
     converted to contractor performance under Office of 
     Management and Budget Circular A-76 may not be performed by 
     the contractor at a location outside the United States except 
     to the extent that such activity or function was previously 
     been performed by Federal Government employees outside the 
     United States.
       (h) In this section, the term ``executive agency'' has the 
     meaning given such term in section 4 of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 403).

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