Competitive Sourcing

Background

The Office of Management and Budget Circular A-76 provides guidance on the competitive sourcing of government activities to determine whether a function should be performed in-house or by the private sector. Public-private competitions, through the competitive sourcing process, have saved the government billions of dollars and required government agencies to become more efficient.

The facts regarding competitive sourcing for fiscal year 2006:

• $1.3 billion estimated savings from competitions over the next five to ten years
• $34,500 savings per full time equivalent employee (FTE) studied
• 87% win-rate for the government teams

As you can see from these facts, significantly higher savings result from increased private sector involvement in the competitive sourcing process. The combination of competition and reengineering, rather than re-engineering alone, is the main component that leads to savings. Congress has continued to enact legislative barriers to fully implementing the competitive sourcing initiative to the detriment of efficient government. 

Due to these obstructions, fewer companies are choosing to enter competitions because of the long, onerous process with seemingly little chance for success in the end. We need fewer restrictions and obstacles, not more, to fully realize the benefits of public-private competitions and the competitive sourcing initiative.

U.S. Chamber Position

We support the competitive sourcing initiative and its continued use within agencies as a management tool.  We will continue to advocate against any weakening of Circular A-76 and the enactment of other obstacle to the private sector competing in the public private competitions.