OMB Supplemental Report Adds Little To Contracting Out Rationale, Kelley Says

Press Release October 6, 2003

Washington, D.C.—A second administration report seeking to justify its increasing efforts to contract out government jobs to the private sector “adds very little” to a government report earlier this year that failed to provide any meaningful rationale for its massive privatization effort, 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) offered that assessment about a document issued Friday by the Office of Management and Budget (OMB). The latest report supplements one issued in July, and seeks to portray how OMB changes in the rules covering government contracting practices are good for both federal workers and taxpayers.

“Just like its July report, OMB’s supplemental document provides insufficient documentation on some of the vital questions surrounding its contracting out initiative,” Kelley said—including the costs to agencies of administering the program and any claimed savings enjoyed by taxpayers from the use of contractors.

“Without the answers to these questions, and unless and until tracking systems are put in place that can monitor in a meaningful ways costs and savings, the administration’s contracting out initiative will continue to be unfair to employees and unwise for taxpayers,” the NTEU leader said.

President Kelley was particularly critical that agencies are being forced to conduct privatization studies using funds drawn from other parts of their budgets. “It is clear to anyone willing to look that taking money from agency operating budgets for this purpose shortchanges taxpayers,” she said.

Kelley also criticized OMB for its contracting out “scorecard,” a device it uses to grade whether or not agencies are complying with its directives to contract out more jobs. Its use of various criteria under the “scorecard” system actually creates disincentives for agencies and employees, making it much more difficult for them to compete with the private sector, Kelley said.

Moreover, she noted, while OMB claims credit for having eliminated the numeric quotas of jobs to be contracted that generated so much criticism, “the fact is that agencies are now expected to compete 100 percent” of their potentially commercial activities, the NTEU president said. “Dropping the quotas is, in fact, a distinction without a difference,” she said.

“Whatever the administration’s rhetoric, and whatever mechanism it is pushing at any given time,” President Kelley said, “the objective is to move as many federal jobs as possible to the private sector.” NTEU is leading the fight against the administration’s stated goal of contracting out as many as 850,000 federal jobs.

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

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