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Washington D.C.—In comments submitted to the Office of Management and Budget (OMB) regarding a proposed policy letter revising federal contracting out rules, the leader of the National Treasury Employees Union (NTEU) praised the letter’s direction, but added that it does not go far enough to ensure a proper balance between federal employees and private-sector contractors.

This spring, OMB’s Office of Federal Procurement Policy issued a proposed policy letter on “inherently governmental” that adopted the Federal Activities Inventory Reform (FAIR) Act definition, as advocated by NTEU. The law defines “inherently governmental” as a function which is so intimately related to the public interest as to mandate performance by government employees.

“We applaud OMB for proposing a policy letter that takes important steps toward protecting federal employees and the federal government from ill-advised contracting out decisions,” NTEU President Colleen M. Kelley said.

But, in the hands of someone who is opposed to federal employee performance of the work, she added, the policy letter could be read to insulate only the highest agency positions from outsourcing.

“The proposed policy letter’s interpretation of the FAIR Act definition and its guidance on what type of work qualifies as ‘inherently governmental’ are too narrow and subject to abuse,” Kelley said.

In 2003, OMB revised its Circular A-76, which governs federal contracting, to open up significantly more federal work to the private sector. As a result of those rule changes, federal contracting soared, reaching some $400 billion in 2008, up from about $200 billion in 2000. In recent years, NTEU has led efforts to curb the runaway contracting to the private sector of government work.

President Kelley commended the job that OMB has done in redirecting the federal contracting out process, but said that additional measures were need to ensure lasting change. “The drastic increase in the size of the contractor workforce that occurred during the previous administration has eroded agencies’ capacity to perform critical functions,” said President Kelley, who has often cited the Department of Homeland Security as an example of the risks to the agency’s missions that can arise from overreliance on contractors. By the agency’s own estimate, it has 180,000 civilian employees and 200,000 contractors.

“The proposed policy letter is an important first step toward undoing eight years of misguided pressures to outsource federal employee work,” President Kelley said. “NTEU believes that OMB has already gone most of the way in developing the additional guidance we are now proposing, but has fallen just short of what NTEU maintains would be the best approach to protect the federal government’s interest in having inherently governmental functions performed by federal employees.”

NTEU continues to support pending legislation in the House and Senate addressing a variety of federal contracting issues, including reforming Circular A-76 and giving federal employees a chance to compete for certain types of work that already has been outsourced by agencies. The companion measures are H.R. 2736, introduced by Rep. John Sarbanes (D-Md.), and S. 924, introduced by Sen. Barbara Mikulski (D-Md.)

NTEU is the largest independent federal union, representing some 150,000 employees in 31 agencies and departments.