In a new report, the Bush administration says its three-year effort to put some federal work up for competition with private firms will save about $5.6 billion over the next decade. Officials are pushing ahead with the “competitive sourcing” plan, but Capitol Hill critics have slowed it down through appropriations provisions. The battle is expected to continue.

Engineering industry officials support the program, although it has involved little design or construction-related work so far. “Generally speaking, progress has been mixed,” says Steve Hall, American Council of Engineering Companies’ vice president for government affairs. “Some agencies are making more progress than others.” He adds that ACEC believes the “underlying effort is a very good one because it seeks to open commercial activities to competition from the private sector for the first time.”

White House Score Card For Public-Private Competitions
Fiscal Years 2003-2005
Number of Federal Worker-Contractor Competitions:
Federal Worker Jobs Competed:
Competitions Won By Federal Workers:
Incremental Cost:
$210 Million
Estimated Net Savings (Over 5-10 Years):
$5.6 Billion

*As percent of total federal worker full-time jobs competed
SOURCE: Office of Management and Budget

In a report sent to Congress April 20, the Office of Management and Budget says that since the program started in fiscal 2003, 1,060 public-private competitions have been completed, and pegs savings at $5.6 billion over five to 10 years. OMB’s report notes that federal employees have done well in those contests, winning work covering 83% of the workers’ slots in play.

The American Federation of Government Employees, a big foe of the sourcing plan, challenges OMB’s estimates. “They made the usual grandiose claims about savings,” says John Threlkeld, an AFGE legislative representative. He says the union is concerned that OMB isn’t counting all the costs of having in-house personnel do competition reviews. He says AFGE also wants to see government employees get the chance to bid for more work now done by outside contractors.

AFGE’s allies in Congress have put restrictions on the administration plan through appropriations bills. Fiscal 2006 spending measures have cuts in the Corps of Engineers’ civil works budget for competitive sourcing and limits on Interior Dept. programs that can be competed, OMB’s report says. Larry Bory, HDR’s vice president for federal government relations, says sourcing’s opponents will continue their fight.

Bory says the sourcing program has produced “limited opportunities” for private firms to date. Industry has picked up work that federal agencies used to do, he says. But the reason is budgetary, as agencies such as the Bureau of Reclamation and Dept. of Veterans Affairs have reduced in-house design and construction staffs.