Home Media Center News Releases

Washington, D.C.—A group of politically-appointed top federal executives has advanced wildly speculative estimates of savings to be gained from pursuit of the administration’s effort to turn over as much work as possible to the private sector, the leader of the nation’s largest independent union of federal employees said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) called the government-wide savings projection by the President’s Management Council of some $5.59 billion over the next 10 years stemming from completed public-private job competitions over the fiscal 2003-2005 period “as good as being pulled from thin air.” The Management Council is made up of agency chief operating officers, mainly deputy secretaries and deputy administrators.

President Kelley previously criticized earlier Office of Management and Budget (OMB) projections of savings from competitive sourcing for being based on faulty guidance to federal agencies about how they should report their costs of conducting public-private job competitions. The OMB guidance to agencies required them to ignore such significant and substantial costs as the time in-house staff may have spent on competitions during regular work hours.

“I see nothing in the Management Council’s report to the president that addresses serious questions surrounding earlier OMB projections of savings from contracting out,” Kelley said.

The Management Council’s projected 10-year savings assumes that fully half the activities identified as suitable for public-private competition on agencies’ fiscal 2005 Federal Activities Inventory Reform (FAIR) Act lists will be competed over time.

For the agencies listed, however, an average of only 17 percent of the activities deemed by them to be commercial in nature on their fiscal 2005 lists were subject to competition in the 2003-2005 period covered by the report.

Moreover, the Council noted, “the actual level and pace of competition at a given agency will be shaped by workforce needs, feasibility analyses, and the strategic goals of the agency.” That, President Kelley said, “casts even more doubt on the reliability of guesses on estimated savings.”

NTEU has been leading the fight against runaway federal contracting, warning about the costs to taxpayers of waste, fraud and abuse in turning federal work over to the private sector—and the dangers inherent in privatizing inherently governmental work, such as tax collection—along with the history of lax oversight of their contractors by federal agencies.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments.