WASHINGTON, DC-U.S. The U.S. Senate adopted an amendment to target waste and inefficiency in outsourcing Department of Defense (DoD) work to contractors. The amendment, which passed the Senate as part of the DoD Authorization bill, makes reforms to a process that has been shown to skew decisions in favor of hiring defense contractors rather than government employees. The amendment was introduced by Senators Bob Casey (D-PA), Sherrod Brown (D-OH), Ted Kennedy (D-MA), Barbara Mikulski (D-MD), Patty Murray (D-WA), Chuck Schumer (D-NY), Russ Feingold (D-WI) and Kirsten Gillibrand (D-NY).
“I’m pleased that the Senate passed this amendment to promote fiscal responsibility and save money for taxpayers while ensuring that those who have the experience, expertise and skill are able to carry out their tasks in the Department of Defense,” said Senator Casey. “We can’t continue to spend money inefficiently and without full accountability, especially when jobs are at stake.”
“Over the last several years, there has been a culture of privatization in the federal government, especially at the Department of Defense,” Brown said. “Numerous studies have found that the pressure to privatize results in bad government and no savings to the taxpayers. This amendment will create a more efficient process to study the pros and cons of privatization. Taxpayers and federal workers will benefit from a more prudent approach.”
The amendment would reform the A-76 process at DoD and bring contracting in-line with the standards used in other areas of government. Similar language passed the House as part of its version of the Defense Authorization.
The General Accountability Office (GAO) has documented flaws in the A-76 process that gives an upper-hand to private contractors when determinations are being made on whether it is more advantageous to use contractors or federal workers. The current system does not take into account all costs incurred by contractors and hinders real competition.
The A-76 process of competitive sourcing is a government-wide initiative that subjects commercial activities performed by federal government employees to public-private competition. The primary source of the policy and procedures involving competitive sourcing has been the Office of Management and Budget (OMB) Circular A-76.
Increasingly it has been found that work that should have been performed by federal employees because of its inherently governmental nature has been given to contractors. These practices come at a considerable cost to the taxpayer.
Contractors acquire and retain work often without competing against other contractors and even more infrequently against federal employees, increasing costs to taxpayers. Federal employees are not even given a chance to compete. The A-76 process has been criticized by the DoD Inspector General and Government Accountability Office because of poor systems to track costs and savings, cost exclusion in order to maximize savings claims, instances costs exceeding estimated savings and a troublingly disproportionate adverse impact on African-American employees.
Specifically, the amendment would:
• Closes a loophole allowing certain DoD functions performed by federal employees to be given to contractors without any determination that such conversions are actually in the interest of taxpayers.
• Establishes time limits for how long A-76 studies can last—30 months in the case of single formation activities and 36 months for multiple formation activities, including a statutorily defined preliminary planning period of six months.
• Includes a provision to terminate studies upon review by the Secretary of Defense.
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