GAO Commercial Activities Panel Issues Report Recommending Changes to Outsourcing

Author:Mr Paul Pompeo
Profession:Holland & Knight LLP

By section 832 of the National Defense Authorization Act of 2001, Congress directed the Comptroller General to "convene a panel of experts to study the policies and procedures governing the transfer of commercial activities for the Federal Government from Government personnel to a Federal contractor . . ." After convening a panel of experts from government, industry and academia, and conducting public hearings and private meetings, the Comptroller General issued the panel's final report on April 30, 2002. The report makes some specific recommendations for revising the outsourcing process, yet it also highlights some consternation that remains regarding the entire subject of outsourcing.

The panel made four broad recommendations to improve the procurement process for outsourcing. These recommendations range from the innovative to the anticipated and would require varying degrees of legislative or administrative action to implement.

First, the panel unanimously adopted a set of 10 "Sourcing Principles." Much like a tablet of commandments, the Sourcing Principles set forth general guidance for the conduct of outsourcing procurements. Some of these principles are reflective of current policy, such as: "support agency missions, goals, and objectives"; "recognize that inherently governmental and certain other functions should be performed by federal workers" and "ensure that, when competitions are held, they are conducted as fairly, effectively, and efficiently as possible." Other principles are directed at more specific change, such as: "avoid arbitrary full-time equivalent (FTE) or other arbitrary numerical goals"; "ensure that competitions involve a process that considers both quality and cost factors" and "provide for accountability in connection with all sourcing decisions."

Second, the panel recommended an Integrated Competition Process, i.e., that public-private competitions should be conducted within the framework of the Federal Acquisition Regulations (FAR). This suggestion contemplates that public-sector proposals would be submitted and evaluated under the same rules that apply to private-sector proposals to assure accountability. Importantly, the panel includes in this recommendation that federal employees have the right to file bid protests. This has been a significant issue for union representatives, given holdings by the GAO and Court of Federal Claims that federal employees do not have standing as an "interested party" to bring a...

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