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Washington, D.C.—A key point in the National Treasury Employees Union’s (NTEU) federal lawsuit against changes in government contracting out rules “has been vindicated” by a correction published today in the Federal Register by the Office of Management and Budget (OMB), NTEU President Colleen M. Kelley said.

The technical correction addressed circumstances under which interested parties can challenge agency designations of functions as “commercial,” and therefore subject to being contracted out under the Federal Activities Inventory Reform (FAIR) Act.

“We pointed out the illegal limitation on those challenge rights at the time OMB announced its massive changes” in Circular A-76, President Kelley said.

“I’m glad to see OMB is fixing this erroneous rule before any federal employees have been hurt by it. OMB should now proceed to fix the other legal violations we identified in our suit,” President Kelley said.

The OMB “technical correction” addresses the submission of a challenge to an agency’s inventory of jobs deemed by it to be commercial in nature. Under the FAIR Act, agencies are required to submit annually to OMB lists of jobs considered commercial in nature, and thus subject to being contracted to the private sector. OMB’s revised circular restricted NTEU’s ability to challenge improper agency designations of functions as commercial by permitting a challenge to that determination only if a function’s designation had been changed from the previous year.

OMB said its technical correction “is intended to clarify that an interested party may challenge the inclusion or exclusion of an activity in (a FAIR Act) inventory, including the classification or reclassification of an activity,” regardless of whether the designation had changed from the previous year.

President Kelley said that, while OMB has fixed one of A-76’s problems, many others remain. She declared that NTEU “will continue to vigorously pursue our suit” attacking the A-76 revisions, which make it easier to contract out federal jobs to the private sector by subverting the rules Congress established in the FAIR Act.

NTEU’s suit, filed in mid-June in U.S. District Court for the District of Columbia, asks the court to declare illegal OMB’s revisions to Circular A-76. In addition to charging that OMB’s changes to the FAIR Act challenge process were illegal, NTEU’s suit also alleges that OMB’s substantial narrowing of the definition of “inherently governmental” functions “illegally trumped Congress” on the sensitive issue of whether a function is “so intimately related to the public interest as to require performance by federal government employees.”

OMB is taking the lead in seeking to implement the administration’s plan to contract out the jobs of as many as 850,000 federal employees.

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