President George W. Bush: Resources for the President's Team The White House
President George W. Bush meets with Dan Bartlett, center, and Josh Bolten in the Oval Office Jan. 9, 2003.  White House photo by Eric Draper.
The Deputy Director for Mgmt
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The Five Initatives

Commercial Services Management

Revising Circular A-76

Competitive Sourcing is a tool we can use to improve the performance and efficiency of activities that are commercial in nature. Departments and agencies are comparing their commercial activities with those of the private sector. The outcome should be better services at a lower price. Whether the private sector or government employees perform the activity, the taxpayer always benefits.

Over the past two years, the majority of the 26 scorecard agencies have built an infrastructure for public-private competition. The agencies have personnel, plans, and significant goals in place.

Examples of ongoing competitions include:
  • Computer personnel, graphic designers, and financial services personnel are among those at the Department of Energy that are engaging in public-private competition. These competitions are unique because they involve a variety of functions and locations nationwide.

  • 2,700 federal flight services personnel at the Federal Aviation Administration (FAA) are participating in a public-private competition. These federal personnel currently provide weather reports to private pilots, a function that is currently outsourced by every major airline.

Competitive Sourcing is the only initiative with every agency in red for status. Agencies can use a number of ways to determine whether the public or private sector will perform their activities. If the activity involves fewer than ten employees, the agency can hire a contractor to do the work without the benefit of competition. Or they can conduct full-scale public-private competition. Too few agencies have completed full-scale public-private competitions. One reason is that agencies are first tackling the easy solutions - directly sourcing activities that are performed by 10 or fewer people. Another is that the process for conducting public-competitions is time consuming and unnecessarily complicated.

In the next several weeks, OMB will issue the final changes to OMB Circular A-76, overhauling the current Eisenhower-era process for public-private competitions. We have received many comments on the draft revisions to the circular. We are going through those comments and making changes that makes sense. But the benefits of the new process will still include:
  • Faster public-private competitions, reducing time from three years to one.

  • Taxpayer savings likely exceeding 30%, regardless of whether the public or private sector wins.

  • Increased federal opportunities for small business. More than 60% of private sector awards through public-private competitions are to small businesses, compared to nearly a quarter otherwise.

Yours truly,

Angela Styles

The Five Initatives:
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