An Open Letter to Congress: Competitive Contracting Saves Taxpayer Dollars
Dear Member of Congress:
The undersigned organizations strongly support implementation of President Bush's competitive contracting program and oppose Congressional schemes to make implementation of this vital initiative more difficult or impossible. According to official government estimates, there are 850,000 jobs in the federal government that qualify as "commercial activities." These jobs include everything from mowing lawns to writing software. Subjecting commercial activities performed within the government to market competition will help save tax dollars and improve the quality and performance of such activities.
The potential benefits of competitive sourcing are clear. For example, in 2002, the Office of management and Budget decided to use competition in response to poor performance by the Government Printing Office (GPO) and opened the job of printing the fiscal 2004 federal budget to competitive bidding. GPO turned in a bid that was almost 24 percent lower than its price from the previous year in order to keep its job. That was $100,000 a year that GPO could have saved taxpayers any time it chose, but didn't until it faced competition.
Contrary to popular belief, competitive bidding does not achieve cost savings by simply reducing the ranks of federal employees. Research by the General Accounting Office and other agencies has shown that federal workers win competitive sourcing bids against private firms about half the time, and when they do lose, the majority go to work for the contractor or shift to other jobs in the federal government. Typically, less than 7 percent of them are laid off.
In spite of the obvious benefits of competition in other areas of the economy, several efforts are underway in Congress that would kill competition at the federal level. Legislative proposals have been introduced to prohibit competitive sourcing in the Federal Aviation Administration Reauthorization, Departments of Agriculture, Interior, and Transportation and Infrastructure appropriations bills.
Competition and choice are important marketplace forces. Harnessing them to provide commercial activities within the federal government will save taxpayer money and allow federal agencies the flexibility needed to focus on core activities, producing them more effectively and efficiently. Additionally, the savings generated from competition can help pay down the federal deficit, a goal shared by all Americans. Congress should be embracing competitive contracting rather than undermining it.
Paul J. Gessing
Director of Government Affairs
National Taxpayers Union
Dr. Adrian T. Moore
Vice President, Research
Randall W. Hatcher
Americans for Tax Reform
American Conservative Union
Carl D. DeMaio
The Performance Institute
Vice President of Policy
Frontiers of Freedom
Dr. Raghavendra Vijayanagar
Indian American Republican Council
Harris N. Miller
Information Technology Association of
National Auctioneers Association
Citizens Against Government Waste
R. Bruce Josten
Executive Vice President
U.S. Chamber of Commerce
Citizens for a Sound Economy
Andrew T. LeFevre
Association of Private Correctional &
Contract Services Association of America
Stan Z. Soloway
Professional Services Council