Spotlight Focuses on Federal Procurement
Spotlight Focuses on Federal Procurement
The federal procurement community is under a spotlight—a very bright spotlight. Never before have contract allocations and purchasing practices had such a prominent position on the front pages of newspapers and Web sites across the country and around the world.
The spotlight is shining on FEMA’s handling of the relief and recovery efforts after Hurricane Katrina and the arrest of David H. Safavian, the Bush administration’s top federal procurement official. Allegations of cronyism and suspect procurement practices abound.
The September arrest of Safavian, the administrator of the federal procurement office at the Office of Management and Budget (OMB), has shaken the federal contracting community and raised questions about the administration’s Competitive Sourcing Initiative.
Launched in 2001, the initiative was viewed by some as an unwelcome and controversial move towards privatization of federal positions.
What do not appear in the headlines or on the evening news are the successful contracts that have resulted in savings and job retention. OMB estimated last year that the initiative will create savings of $1.4 billion over five years.
In a recent example, the U.S. Office of Personnel Management (OPM) announced $10.4 million in savings and cost avoidances as a result of two public-private competitions, one of which will keep 52 information technology specialist jobs in-house at the agency’s Macon, GA, facility.
“The record of OPM in keeping jobs in-house in public-private competitions is excellent and confirms the fairness of the process,” says Ron Flom, OPM Deputy Associate Director for Contracting, Facilities and Administrative Services.
OPM employees have won 12 of 13 streamlined public-private competitions, and one of two standard competitions. In each of the contests announced, streamlined competition procedures as prescribed by OMB Circular No. A-76 were used. Streamlined competitions condense the timeframe of the review and can be used when 65 or fewer employees are involved.
In the case of OPM’s information technology specialists, employees at the Macon Technical Services Group developed a Most Efficient Organizations (MEO), cutting 40 percent in projected overtime expenses. The estimated savings over five years is nearly $900,000. When compared to private-sector prices available under the General Services Administration’s Federal Supply Schedule, the OPM MEO can perform the function for $9 million less than the private sector over the five-year performance period.
The competition involving the building operations staff of the Facilities Services Group projects savings totaling more than $500,000 over five years. Savings are based on a comparison of actual OPM salary costs and private-sector prices under the GSA Federal Supply Schedule.
Necessary but painful, public scrutiny often leads to positive change, as is evident at FEMA.
The agency scrambled to contract for everything from ice to ambulances in the aftermath of Hurricane Katrina. Congress and government oversight committees have criticized FEMA for bypassing competitive bidding in some Katrina contracts.
Because these contracts were issued on an emergency basis, FEMA always intended to renegotiate the contract rates, terms, and conditions. FEMA has announced plans for a competitive contracting strategy for ongoing recovery work in Gulf Coast states hit by hurricanes, as well as for future disasters.
The dual track competitive bidding strategy will place a priority on local and small disadvantaged businesses for Gulf region recovery work, as well as on the use of local and small businesses as subcontractors for national open competition contracts.
By having competitively bid contracts for rescue, relief, and refugee products and services in place, FEMA will be prepared for the next emergency.
