Why Should Companies Ever Compete in A-76?

“With the Senate Appropriations Committee gearing up for mark-ups on several key fiscal year 2006 appropriations bills, we find ourselves wondering if Congress really cares about competition, and getting the best deal for the taxpayer,” said Chris Jahn, President of the Contract Services Association.

The House-passed Department of Defense appropriations bill (H.R. 2863) includes a provision that, in effect, requires that health insurance benefits offered by private sector bidders be at least equal to those offered by the Government. This language is opposed by the Department of Defense, the Office of Management and Budget, and the Small Business Administration.

In a letter to the Senate Defense Appropriations Subcommittee, Jahn wrote that the House provision “singles out one benefit element and ignores the reality of the total compensation packages commonly offered in the private sector. These compensation packages typically include a wide range of health, matching retirement, bonus/incentive, professional and personal development, and other benefits – very few of which are available in the Government.”

The House-passed Transportation, Treasury, Housing and Urban Development appropriations bill (H.R. 3058) approved by the House includes language that would pose a severe setback to the Federal Aviation Administration’s (FAA) efforts to provide upgraded flight and weather information to this country’s 600,000 private pilots. The legacy AFSS would be consolidated – no matter who won the award. Flight service stations do not control air traffic – and oversight remains with the FAA. In addition, this measure would negate the more than $2.2 billion in savings projected over the life of the contract. Instead, Congressional micro-management will result in the taxpayers paying a penalty of $325 million for terminating the contract, as well as potentially an additional cost of $25 million for bid and proposal costs.

H.R. 3058 also includes language that negates the revised Office of Management and Budget (OMB) Circular A-76. This language has drawn a veto threat from the Administration. Jahn expressed his concern that the provision would “prohibit the use of the revised OMB Circular A-76 process, without offering a viable alternative for conducting such work – leaving agencies to either use the old, widely distrusted and ineffective version of the Circular, or do nothing. With 90% of the competitions being won by Federal employee, how can one argue that the process is unfair to Federal employees?”

Said Jahn, “Competition has proven to save the taxpayers money. But, with the restrictions that Congress is adding to the annual appropriations bills that handcuff the ability of agencies to fairly conduct a public private competition, will any company ever bid again on an A-76?”

Copies of the CSA letters to the subcommittees are attached, and can be found HERE.

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CSA is the nation’s oldest and largest association of service contractors representing over 200 companies that provide a wide array of services to Federal, state, and local governments.  CSA members perform over $40 billion in Government contracts and employ nearly 500,000 workers, with two-thirds of CSA companies using private sector union labor.  CSA members represent the diversity of the government services industry and include small businesses, 8(a)-certified companies, small disadvantaged businesses, women-owned, HubZone, Native American owned firms and global multi-billion dollar corporations.  CSA promotes Excellence in Contracting by offering significant professional development opportunities for government contractors and government employees, including the only program manager certification program for service contractors.  For more information on CSA, go to:  www.csa-dc.org.