HOYER STATEMENT ON OMB’S “COMPETITIVE SOURCING” REPORT

For Immediate Release:

May 26, 2004

Contact:Stacey Farnen
202-225-3130

WASHINGTON – House Democratic Whip Steny Hoyer (MD) released the following statement today in response to the release of a report by the Office of Management and Budget on “competitive sourcing”:

“The Office of Management and Budget’s (OMB) ‘Report on Competitive Sourcing Results for Fiscal Year 2003,’ which was called for in the Fiscal Year 2004 Omnibus Appropriations bill, touts savings from contracting out activities performed by federal agencies.  However, the report was based on highly questionable data and cost accounting systems.  It should not be read as a definitive statement that the Bush Administration’s controversial ‘competitive sourcing initiative’ is achieving real savings for taxpayers without undermining public services. 

“A careful reading of the report reveals that few agencies reported actual savings and almost all reported savings are projected estimates.

“Further, it appears OMB provided flawed guidance to agencies about what data to collect with respect to the costs of their contracting out activities.  For instance, OMB ordered the agencies to exclude significant costs directly related to public-private job competitions, such as the costs of in-house staff that spent time working on the competition. Thus, the data collected did not reflect the actual cost to these agencies to participate in the competitions.

“To be sure, the report observes that federal workers have won the majority of public-private job competitions.  While this finding supports the view that federal workers are typically far more efficient than is assumed by supporters of the Bush Administration’s ‘competitive sourcing’ initiative, the OMB report failed to mention that the in-house team often sharply reduces the workforce in order to stay competitive. Thus there is a cost to taxpayers in the form of reduced services. After a public-private competition for federal work, there often are not enough agency employees to provide the service at the level the public wants, needs and expects.

“I urge OMB to do a proper examination of its controversial ‘competitive sourcing’ initiative to give taxpayers a more accurate picture of its consequences.”

###