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Outsourcing: Killer Wind or Bad Breath?

April 10, 2006 - 3:53pm

Federal unions have made contracting out, with what they say is the heavy loss of and/or threat to federal job-holders, the centerpiece of their opposition to the re-election of President Bush and their support for Democratic challenger Sen. John Kerry of Massachusetts. Outsourcing bad!

The Bush administration has made the process of competitive bidding one of its key initiatives in what it hopes the public will see as an effort to make government more efficient and less costly to the taxpayers. Outsourcing good!

Both sides, for different reasons, make it appear that the competitive bidding process is going full speed ahead and chopping federal bodies right and left.

But could it possibly be that both sides are exaggerating the impact of Government vs. Industry competition to prove the point they want made? Or are they viewing the activities and outcomes through two very different pairs of non-prescription glasses?

It's a fact of life in politically supercharged Washington, especially in an election year, that opposing sides can take the same data and come up with very, very different conclusions. Usually the one that makes them look good or, better yet, make the other side look real bad.

So take a look at the data and you decide. Start with a new study: a 38-page report from the University of Maryland's Center for Public Policy and Private Enterprise. They may well have an ax to grind too, after all this is Washington, but it's billed as a just-the-facts report.

Among other things it says:

Competition between government and industry is good. During the 10-year period studied (1994 through 2004,) "competitions resulted in an average estimated savings of 44 percent of baseline costs with either improved performance or no decrease," according to the report.

Only an "average of 5 percent of Defense Department (civilian) jobs competed resulted in involuntary separations" of employees, the report says.

Contracting out and competitive sourcing got a jump start during the Clinton administration when downsizing was the name of the game. Many agencies that were cut, mostly in the Defense and intelligence area, are now rebuilding or restructuring, according to the report.

During the 1990s in-house bids (feds) in competition with the private sector won only 44 percent of the competitions. But feds have improved their batting average and their win rate since 1999. "By 2002, public and private wins were evenly split," the report says, "and by 2003, in house bids won nearly twice as many competitions as contractors," according to the report.

So what does all this mean? The politicians - administration and union - have their opinions. But what does this report actually say? Check it out with workers on the line, supervisors and managers, and SES types who must live and work in an increasingly competitive environment. That would be you.

Draw your own conclusions. Check out the numbers and their conclusions at http://www.businessofgovernment.org/pdfs/GanslerLucyReport.pdf (the link opens a pdf file, whatever that is.)

BUYOUTS

All of the federal buyouts approved since October 1, the start of the 2005 fiscal year, are of the 3-R variety: for reasons of Restructuring, Reorganization or Realignment. If you missed yesterday's report on the latest federal buyouts, click here for an update.

To reach me: mcausey@federalnewsradio.com

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