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Washington, D.C.—Guidance to federal agencies from the Office of Management and Budget (OMB) on how to report to Congress about their contracting out activities will lead to unreliable cost estimates—and it provides no mechanism for reporting about deteriorating contractor services, the leader of the nation’s largest independent union of federal workers said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) said the OMB guidance about reporting on the costs of agency contracting out activities is “completely skewed,” which will lead agencies to underreport actual costs connected either with studying a move of federal work to the private sector or actually moving the jobs to contractors. The reports are called for in the fiscal 2004 Omnibus Appropriations bill.

President Kelley criticized the OMB guidance for asking agencies to include a quantifiable description of improvements in service or performance as a result of contracting out, but failing to ask for a description of deteriorating service.

Another problem, she said, is that the reports to Congress must be cleared by OMB, “leaving lots of room for OMB’s pro-contracting biases to be included” in the final documents.

On the matter of accounting for all costs, Kelley said the OMB guidance specifically requires

that agencies omit certain costs that are directly related to public-private competitions, as well as

telling agencies to exclude the costs of in-house staff that may have spent time on the competition during regular working hours.

“These and similar problems get in the way of an accurate accounting of the true cost of sending government work to the private sector,” Kelley said, “and the purpose of the reporting requirement is to provide members of Congress with complete and accurate information about this misguided administration policy.”

NTEU has been leading the fight against the administration’s efforts to contract one out of every two federal jobs to the private sector.

Kelley said NTEU will continue to seek “an honest accounting” of the costs to taxpayers of public-private competitions for government work, and will seek to have added “a requirement of

independent third-party audits” of such costs and claimed benefits.

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