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Breakout Session # Competitive Sourcing Cathy Garman, Contract Services Association Cathy@csa-dc.org Joe Sikes, Depart

Using Competitive Sourcing to Achieve Best Results for the Taxpayer. Breakout Session # Competitive Sourcing Cathy Garman, Contract Services Association Cathy@csa-dc.org Joe Sikes, Department of Defense Kent Smith, Del-Jen/Flour, Inc. DATE: July 27, 2006 at 11:15a.m.-12:15 p.m.

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Breakout Session # Competitive Sourcing Cathy Garman, Contract Services Association Cathy@csa-dc.org Joe Sikes, Depart

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  1. Using Competitive Sourcing to Achieve Best Results for the Taxpayer Breakout Session # Competitive Sourcing Cathy Garman, Contract Services Association Cathy@csa-dc.org Joe Sikes, Department of Defense Kent Smith, Del-Jen/Flour, Inc. DATE: July 27, 2006 at 11:15a.m.-12:15p.m.

  2. A-76 – A Historical Perspective How many private sector, and how many Federal sector attendees? How much is known about Competitive Sourcing/ A-76? Background: Performance of Commercial Activities • In the process of governing, the Government should not compete with its citizens • National Policy Promulgated in 1955 • OMB A-76 Circular issued in 1966

  3. A-76 – A Historical Perspective • Circular revised in 1967, 1979 & 1983 • Major revision in 1996 • Detailed outline on how to conduct public-private competitions • Two-step process • Viewed as unfair by all parties • Mostly used at Department of Defense (though there was a moratorium on DOD use in early 90s)

  4. A-76 – A Historical Perspective Federal Activities Inventory Reform (FAIR) Act – passed October 1998 • Mandates Annual Agency Inventories • Statutory definition of inherently governmental • Requires review for competing agency commercial activities • Sunshine on agency commercial activities • Over 900,000 Federal positions identified as commercial in nature; jobs normally performed by the private sector

  5. A-76 – A Historical Perspective Commercial Activities Panel Report (www.gao.gov) • The FY 01 National Defense Authorization Act created a Blue Ribbon Panel to study competitive sourcing process and related issues. Industry, government, and public sector unions represented • Unanimous agreement on 10 sourcing principles • Recommendations focused on providing best value, promoting competition, valuing people, & moving to FAR process • Provided basis for revisions to A-76 Circular

  6. Revised A-76 Circular • Latest Revisions were released on May 29, 2003. • Initial reactions were split reactions – hated by public sector unions, industry cautiously supportive (implementation is the key); same attitude today • Key Points in Revisions: • Standard competitions shall not exceed 12 months – intended to provide more reasonable time frame for conducting public-private competitions; in line with “normal” procurements • Special streamlined competition (for under 65 FTEs) not to exceed 90 days • 10% cost differential maintained for all standard competitions; eliminated for streamlined (to help small business)

  7. Revised A-76 Circular, cont. • FAR-like process, based on best value • Provides for exclusion of government bidder if deficient • Better accountability (for both public and private sector winners) • Performance periods must be the same for the agency tender offer and the private sector offers – minimum of 3 years and a maximum of 5 years for standard competitions • If the in-house tender offer wins, the MEO must compete again at the end of the performance period, just like under a private sector contract. BUT, agency can declare MEO a high performing organization and exempt from competition for an extra time period

  8. Legislative Response to Revisions • One year prohibition on A-76 studies for DOD (2004) • House approved language to prohibit funds to be expended to implement revised Circular • Bid Protests for Federal sector (ATO) • Further restrictions considered in annual appropriations bills • Eliminate streamlined • Mandated cost differential for all competitions; limited best value • Changes made statutory for DOD in FY2006 authorization bill

  9. Legislative Response to Revisions – FY2007 • Walter Reed competition (last year FAA) – attempt to overturn award to private sector • Specific limitations for certain types of functions (locks/dams, immigration) • Army Corps report language – no need to do A-76 since Federal Sector wins

  10. OMB Response • President’s Management Agenda • Administration favors competition – no matter who wins (public or private sector) • OMB studies show significant potential savings • But will they be fully realized? • Agencies winning 90% of competitions • Industry is walking away from A-76 competitions

  11. A-76: Why should we still care? Benefits of competitive sourcing • time savings • cost savings • project delivery guarantees • access to new skills • increased innovation (e.g., a government employee with an innovative idea facing institutional barriers to change) • allows agency to focus on core mission • best value • risk sharing

  12. A-76: Why should we still care? • An agency and industry view of A-76 Joe Sikes, Department of Defense Joseph.Sikes@osd.mil Kent Smith, Del-Jen/Flour ksmith@del-jen.com

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