Statement of President Colleen M. Kelley on OMB Contracting Out Claims

Press Release July 30, 2007

Runaway federal contracting is a shell game masking the true costs of government to America’s taxpayers and handing the crucial work of the government to a less accountable workforce. I would suggest that administration officials are the ones spinning tales of wildly speculative savings to promote an agenda of turning as much work as possible over to the private sector. For example, a May 2007 OMB report on contracting out results for fiscal 2006 claimed savings in the fiscal year of $35 million from an award to an Internal Revenue Service (IRS) contractor even though the contractor—IAP Worldwide, Inc.—has missed several deadlines under the contract, leaving IRS employees to perform the bulk of the work.

A February 3, 2007 New York Times article stated that “Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government. On the rise for decades, spending on federal contracts has soared during the Bush administration, to about $400 billion last year from $207 billion in 2000, fueled by the war in Iraq, domestic security and Hurricane Katrina, but also by a philosophy that encourages outsourcing almost everything government does.”

A prime example of the danger in outsourcing inherently government work is the Internal Revenue Services’ program to contract out the tax collection work of the IRS—when IRS commissioners have testified that IRS employees can do the work at a significantly lower cost and return more dollars to the treasury. Taxpayers’ financial information is put at risk and private debt collectors are permitted to operate under a veil of secrecy.

Inherently governmental work should not be given to contractors. And, agencies that have contracted out non-inherently governmental work should be required to hold periodic re-competitions to determine whether the work should be brought back in-house. Instead, contracts get renewed automatically with little or no scrutiny and this shadow army of contractors continues to grow.

If federal employees do not speak out against this outrage, then who will? As federal employees, we know better than anyone the dangers of handing over government work to the private sector. We have seen the inefficiencies and waste firsthand. Given the tools and resources to do their jobs, no one does the work of the federal government better than federal employees. This waste of taxpayer dollars must stop.

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