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Washington, D.C.—A government report that claims savings from contracting out activities by federal agencies was derided today as “fiction” by the leader of the nation’s largest independent union of federal employees.

The Office of Management and Budget (OMB) made the claim in a report to Congress about the costs to federal agencies of contracting out work. The report was called for in the fiscal 2004 Omnibus Appropriations bill.

“There is no way that federal agencies, relying on the guidance that OMB provided on preparing these reports, can accurately define their costs related to contracting out,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU).

What’s more, she said, OMB’s own language undercuts its conclusion of savings derived from contracting out federal work. Kelley quoted OMB’s report as saying “few agencies reported actual savings. Almost all reported savings are projected estimates.”

The NTEU leader previously was sharply critical of the guidance OMB provided to agencies about reporting on the costs of their contracting out activities. OMB ordered the agencies to omit

significant costs directly related to public-private job competitions, Kelley said, including omitting the costs of in-house staff that may have spent time on the competition during regular working hours.

“The figures OMB demanded from the agencies in no way reflect the true cost of these agencies being forced to conduct public-private job competitions,” the NTEU leader said.

Kelley, who has been leading the fight against the administration’s drive to contract hundreds of thousands of federal jobs to private companies, took note of OMB’s claim that in-house teams of federal workers have won a wide majority of public-private job competitions.

While this supports NTEU’s contention that no one can perform the work of the federal government more efficiently or effectively than federal workers, she said, “OMB took no note of the reality” that the in-house team often sharply trims a function’s workforce in order to be a factor in the job competition.

“Even if there are savings—and there’s no real proof the savings are either real or substantial—there is undeniably a cost to taxpayers in the form of reduced services affecting important programs. After a public-private competition for federal work, there often simply aren’t enough agency employees left to provide the service at the level the public wants, needs and expects,” President Kelley said.

As the largest independent federal union, NTEU represents some 150,000 employees in 29 agencies and departments.