U.S. Chamber Says Government 'Re-invention' Falling Short

WASHINGTON, D.C. – The United States Chamber of Commerce today called for Congressional hearings because the federal government has failed to fulfill the mandate of the 1998 Federal Activities Inventory Reform Act (FAIR) to outsource eligible government functions to private companies.

Under the FAIR Act, federal government agencies are required to list all activities that are "not inherently governmental," and to consider outsourcing those activities to the private sector through competitive bidding.

"Nearly one million federal workers are engaged in work that could be done by the private sector," said Bruce Josten, Executive Vice President of the Chamber. "The promise of the FAIR Act – a more efficient government that costs less – won't happen until the Administration implements the Act fully. Rather than 'reinventing itself,' the Administration has settled for superficial changes and minor makeovers, in the face of opposition from the federal workers union."

Studies have shown that competition to perform former government activities produces significant cost savings no matter who wins – an average of 40 percent when the work goes to the private sector and 20 percent when performed by a federal employee.

"Federal foot-dragging has thwarted the private sector's legitimate interest in competing for activities that are currently performed by the federal government," said Josten. "This missed opportunity means substantial savings for taxpayers are not being realized."

Further, federal agencies have largely ignored appeals by the business community for proper implementation of the Act, according to the Chamber. All of the appeals filed by the U.S. Chamber of Commerce – more than 25 appeals – have been denied.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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