OPENING REMARKS OF SENATOR DICK DURBIN

I have heard from many of my constituents who are proud Federal public servants dedicated to their chosen professions but who express their growing apprehension about what this Administration’s plans for competing jobs may do to their livelihoods.

Federal employees are concerned that agencies are conducting competitions simply to meet quotas, not because there are valid reasons to believe that the private sector could do the work more effectively.

Federal employees are concerned that under the rewritten rules, the definition of what is an “inherently governmental” function has been morphed with a more stringent test than specified under Federal law by adding inappropriate modifiers or conditions.

Federal employees are concerned that even when A-76 competitions are adequately performed, careful analysis cannot establish that decisions have been beneficial and cost-effective.

Federal employees are concerned that outsourcing “decisions” will not be made based on merit or cost savings, but on OMB’s mandates and the lack of agency familiarity with the A-76 process.

And because of the unprecedented magnitude of OMB’s quotas, the very ability of agencies to fulfill their missions will be put at risk and tens to hundreds of thousands of civil servants will be displaced.

Numerous questions need to be asked and answered. Are OMB’s quotas justified by considered research and sound analysis, and are they consistent with the mission of the agencies? Are internal agency quotas so justified?

Do the agencies have the resources to carry out fair and equitable competitions? Have Federal agencies lost the capability to effectively perform their missions due to over-outsourcing? How will current competitive sourcing quotas affect their capabilities?

How are we monitoring and evaluating the costs and the quality of services being performed in the private sector under contract with the Federal government? Do the current rules and practices ensure that in-house talent gets a fair opportunity to compete for their jobs?

Mr. Chairman, I note that you have raised the issue of human capital implications of this effort. It strikes me that it will be just about as formidable as the perils of Sisyphus to make any headway in tackling the “human capital” challenge by trying to recruit and retain the best and brightest to the Federal workforce when in the very next breath they’re being told that, “oh, by the way, over the next few years one out of every four jobs could potentially disappear into the private sector.”

It’s no wonder there’s angst and anguish capturing headlines like this one from June 10th’s edition of The Washington Post: “Cuts Sap Morale of Parks Employees” with the subhead of “Many Fear Losing Jobs to Outsourcing.”

How can we possibly expect peak performance when those whom we entrust with meeting agency missions on the front line are consumed with concerns about the continuation of their careers? At what point do efforts to study whether to privatize become counterproductive and disruptive to government operations?

It also strikes me that we have a Catch-22. In an effort to meet these quotas, Federal agencies may not have the personnel in place to even handle the competitions. As they bump up against what are now even tighter deadlines, they may end up just directly converting the work to the private sector or using streamlined processes that may not provide essential protections.

We really don’t have a trove of solid, agency-by-agency information about the costs and performance of work that is being performed for the government under contract. I have long been interested in whether we have a good system (or any system at all) to measure and account for these costs, determine if there are savings, and oversee the work that is being done with Federal funds.

It’s been my impression that some of my colleagues have been just hidebound to outsource, without regard to either the price tag or the performance. Their motivation is to reduce the size of the Federal workforce – at any cost.

When I have suggested amendments – arguing that we had to save money, they rejected them. They told me that’s not the point–we have to turn some lights out in some federal buildings. I’d like to know whether that’s still driving the outsourcing fervor.

During the last Congress, joined by over two dozen colleagues, I introduced legislation to try to get a better handle on this situation. I am putting the finishing touches on similar legislation to be introduced shortly. Mr. Chairman, I’d like to share a draft with you with the hope that you could join me in making this a bipartisan effort.

The TRAC Act would require Federal agencies to track the costs and savings from contracting out. It also calls for a comparative study of wages and benefits, conducted by the Office of Personnel Management and the Department of Labor to get better information. GAO has indicated that since contractors have no obligation to furnish the necessary data, it is difficult to assess this. The bill provides a reasonable opportunity for Federal agencies to make substantial progress in carrying out the tracking requirements before enforcement remedies like suspension of further outsourcing would be invoked.

I am concerned that decisions to shift work to the private sector be made fairly, not arbitrarily; that public-private competition is fostered; and that we have a reliable system in place to track costs and performance of work being performed with Federal funds by the private sector under these contracts. In essence, real accountability and true transparency.

I also hope that we can get an answer to another important question about whether OMB is paying any attention to a Congressional directive prohibiting the use of arbitrary numerical quotas in its push to privatize work performed by federal employees.. I’m referring to Section 647 of Division J of the FY03 Omnibus Appropriations (P.L. 108-7) signed into law on February 20 of this year. Specifically, bill language stated that

“[N]one of the funds made available in this Act may be used by an agency of the executive branch to establish, apply, or enforce any numerical goal, target, or quota for subjecting the employees of the executive agency to public‑private competitions or for converting such employees or the work performed by such employees to private contractor performance under the Office of Management and Budget Circular A‑76 or any other administrative regulation, directive, or policy unless the goal, target, or quota is based on considered research and sound analysis of past activities and is consistent with the stated mission of the executive agency.” (emphasis added)

and conference report language provided that:

“If any goals, targets, or quotas are established following "considered research and sound analysis" under the terms of this provision, the conferees direct the Office of Management and Budget to provide a report to the Committees on Appropriations no later than 30 days following the announcement of those goals, targets, or quotas, specifically detailing the research and sound analysis that was used in reaching the decision.”

I would like to note for the record that this morning, our full Committee’s ranking member, Senator Joe Lieberman, is sending a letter to OMB Director Joshua Bolten seeking answers to vital questions about the Administration’s compliance with this particular provision and the reporting responsibilities. I ask unanimous consent that a copy of Senator Lieberman’s letter be made a part of the record of this proceeding, and that the record be left open to permit inclusion of the Administration’s response.

Mr. Chairman, I think today’s hearing will be an opportunity to probe these and other issues. I thank you again for scheduling it and welcome our distinguished witnesses.