[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[Senate]
[Pages 4313-4314]
[From the U.S. Government Publishing Office, www.gpo.gov]




                GAO FEBRUARY COMPETITIVE SOURCING REPORT

  Mr. AKAKA. Mr. President, I have repeatedly voiced my opposition to 
the Administration's aggressive out-sourcing agenda which I believe 
comes at too high a cost to Federal workers and to Government 
accountability and cost-effectiveness. My concerns are confirmed by a 
February 2004 General Accounting Office, GAO, report entitled, 
``Competitive Sourcing: Greater Emphasis Needed on Increasing 
Efficiency and Improving Performance,'' GAO-04-367. I highly recommend 
this report to my colleagues.
  The GAO reviewed the Federal outsourcing agenda at seven agencies: 
the Departments of Defense, Health and Human Services, Interior, 
Agriculture, Education, and Veteran's Affairs. These agencies contain 
84 percent of Federal jobs eligible for outsourcing. The administration 
has identified 304,800 Federal jobs for outsourcing at the Departments 
of Defense, Health and Human Services, and Interior alone, which 
represent nearly 42 percent of the total workforce of these agencies.
  GAO found that the examined Federal agencies are focusing more on 
implementing Office of Management and Budget, OMB, mandates on the 
number of competitions at the expense of cost-efficiency. In 2001, the 
administration had established the goal of privatizing up to 50 percent 
of federal jobs. However on July 23, 2003, the OMB's Administrator for 
Procurement Policy, Angela Styles, testified before the Governmental 
Affairs Committee that contracting quotas would be terminated and 
replaced by agency-specific plans.
  This shift in policy came after repeated criticisms from both sides 
of the aisle in the Senate and the House of Representatives. For 
example, the FY03 Transportation, Treasury, and General Government 
Appropriations Act severely restricted the use of contracting quotas as 
a result of strong bipartisan opposition.
  There are important steps we can take now to improve the cost-
effectiveness and fairness of public-private competitions. As ranking 
member of the Governmental Affairs Financial Management Subcommittee 
and the Senate Armed Services Readiness Subcommittee, I am working to 
improve the financial transparency and cost-savings of Federal 
outsourcing policies. Federal contracts should be required to generate 
at least 10 percent savings over agency costs. The Federal Procurement 
Data System, FPDS, reports that the Federal Government spent 
approximately $250 billion on Federal contracts in 2002. The Senate 
passed FY04 Omnibus Appropriations Act would have required a minimum of 
10 percent cost-savings before Federal jobs are contracted out. 
Unfortunately, this measure was stripped from the FY04 Omnibus 
Appropriation Act.
  The GAO report reaffirms the need for a minimum cost-savings in 
Federal procurement policies. By law, the Department of Defense, DOD, 
is required to achieve cost-savings before jobs are contracted out. DOD 
is the largest buyer of contracted services and according to recent 
FPDS data spent over $164 billion in 2002.
  We can also improve fairness in public-private competitions. Before 
decisions are made to contract out Federal work, agencies need the 
personnel, funding, and technology to ensure that the work is performed 
in a timely and cost-effective manner. We cannot expect Federal 
employees to oversee billions of dollars of contracts without these 
resources, which is why I was disappointed to learn that GAO found that 
six out of the seven agency offices examined had only one or two 
employees overseeing outsourcing activities.
  Moreover, we should level the playing field so that Federal workers 
have

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the right to appeal the loss of a competition just as contractors do 
today. Fair competition must ensure that affected employees have proper 
appeals and protest rights. Unlike Federal employees, Federal 
contractors have the right to protest OMB Circular A-76 decisions 
before the GAO. I am disappointed that the FY04 Omnibus Appropriation 
Act stripped a provision that would have provided Federal workers the 
same appeal rights as contractors.
  I look forward to continuing to work with my colleagues to ensure 
that Federal procurement policies offer the best return on the dollar 
and are fair to Federal workers. The results of this GAO review 
reaffirms that there is more work to be done in this area.

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