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Washington, D.C.—The head of the National Treasury Employees Union (NTEU) today criticized as “premature and speculative” government estimates of savings from contracting out—and warned that continuing efforts to turn over federal work to the private sector is taking a substantial toll on the institutional knowledge agencies need to fulfill their missions.

NTEU President Colleen M. Kelley offered these assessments in response to a report by the Office of Management and Budget (OMB) that projected savings of $1.4 billion over the next five years from administration efforts to force federal workers to compete with the private sector for their jobs.

“The projected savings figures are exaggerated,” Kelley said. “Time will tell if that kind of money is saved, and I believe it will not be.” NTEU has been critical of such OMB reports in the past, noting that OMB guidance to federal agencies on how to report their costs of conducting public-private competitions requires them to ignore such significant and substantial costs as the time in-house staff may have spent on competitions during regular work hours.

“The figures OMB demands from the agencies in no way reflect the true costs to the agencies of being forced to conduct public-private job competitions,” the union leader said. Kelley has been leading the fight against the administration’s continuing effort to make available to the private sector as many as one out of every two federal jobs.

“Hundreds and sometimes thousands of federal employees are immediately and adversely impacted by the decision to conduct a competitive sourcing study,” Kelley said. “Employees whose jobs are part of the study often opt for reassignments and early retirements, rather than wait for the outcome of the study. So even if the employees retain the work, many talented and experienced federal workers are no longer at their jobs.”

This is an overlooked impact of competitive sourcing, she added. “There is a tremendous loss of institutional knowledge and experience, along with the effect these competitions have on employee morale.”

And these are the most important costs to employees, their agencies and taxpayers, Kelley said. “How does having employees worried about losing their jobs to the private sector help the federal government attract and retain the best possible workforce?” she asked.

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