The Office of Management and Budget estimates that
competitive sourcing will save agencies $1.1 billion over
the next several years by reducing operating costs and
It said it based its estimates on competitive sourcing
reports that agencies prepared for Congress in line with
the Consolidated Appropriations Act for fiscal 2004, and
studies of about 650 commercial activities in fiscal 2003
and several in 2004.
OMB said in-house government sources won 89 percent of
positions competed in fiscal 2003, prompting contractor
groups and others to argue they are unfairly weighted in
favor of feds.
Federal employee groups criticized the report for other
reasons. They argue that OMB overstated benefits partly
by not factoring in costs such as hours worked by staff
during normal business hours, for example. The report put
the total cost of competitions in 2003 at about $88 million.
“There is no way that federal agencies, relying on the
guidance that OMB provided on preparing these reports, can
accurately define their costs related to contracting out,”
said Colleen M. Kelley, president of the National Treasury
Employees Union, who referred to the report as “fiction.”
Not all respondents reported gains. The Department of
Agriculture reported that it lost $3.6 million through
competitions according to the report.
The report noted that agency success with competitive
sourcing depends on intensive commitment: “sound
preliminary planning, grouping related activities to
generate private sector interest, reorganizing inefficient
in-house operations, and aligning competitive sourcing
and human capital efforts to close competency and skills
OMB said it is developing a government wide database to
more systematically collect competition data, and that
it will continue to emphasize the need for long-range
planning and training.