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Washington, D.C.—For the second year in a row, the Office of Management and Budget (OMB) has provided Congress with a faulty picture of phantom benefits supposedly to be generated by the White House’s competitive sourcing initiative, the leader of the nation’s largest independent union of federal workers said today.

“OMB continues to play a ‘shell game’ with Congress on this important issue,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU). She offered her comments in the wake of a report by OMB claiming savings of $1.4 billion over the next three to five years from public-private job competitions conducted during fiscal 2004.

In its first report, last May, OMB claimed projected savings of $1.1 billion; at the time, Kelley derided that report as ‘fiction.’

As to the current report, the NTEU leader said OMB “is very carefully asking for information (from federal agencies) that will inflate what is already a false projection of savings” in the government’s competitive sourcing program. “There is no way that agencies, relying on the guidance that OMB provided on preparing these reports, can accurately define their costs related to contracting out,” she said.

The problems start with the cover letter accompanying the guidance, Kelley said, noting that it asks for one or two narrative treatments describing “a successful competition and the practices used to achieve results”—but does not ask for any instances in which the competitive sourcing process failed, such as when costs associated with running a competition exceed any real savings, thus Congress remains unaware of these instances.

What savings that may occur are the result of reengineering efforts by agency employees in their bids to retain the work in-house, Kelley said. The much smarter move for the government, she added, would be to provide federal employees on a continuing basis with the tools they need to reengineer their work processes. “No one knows better how to do the work of the American people than front-line federal employees,” the NTEU leader said.

The most striking failure of the ability of the guidance to generate a more accurate picture of the results of federal contracting is OMB’s continuing insistence that not all costs to agencies be included.

For example, Kelley said, agencies are told not to include as a cost any work done by the agency prior to the announcement of the actual competition. However, federal contracting rules require agencies to perform significant planning—such as developing a document known as the performance work statement (PWS), which spells out the work to be done—before the announcement of a competition. That process can take up to six months, with none of those costs included in OMB’s report to Congress.

Even apart from the faulty guidance given agencies, Kelley said, the problem remains that projected savings are just that—projected—with no assurance that any savings will be realized. OMB, however, counts those figures as savings actually generated from contracting out. “These estimates have no credibility whatsoever,” Kelley said.

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