Today's Article
A GAO audit
discovered that Labor
officials employed
imaginary budget
projections to falsely
inflate 'savings report'
numbers.
discovered that Labor
officials employed
imaginary budget
projections to falsely
inflate 'savings report'
numbers.
The American Spark
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Bush Lied To Congress About Outsourcing Benefits
By Cliff Montgomery - Nov. 26th, 2008
George W. Bush's Department of Labor (DOL) lied to Congress about the benefits of outsourcing government
jobs to private firms, declares a Government Accountability Office (GAO) study released Monday.
The audit discovered that Labor officials employed imaginary budget projections to falsely inflate "savings
report" numbers--even when actual numbers proved the inaccuracy of those projections.
The neo-conservative theory was that democratic governance would prove wildly expensive and inefficient for
the taxpayer, and that private companies would usher in a wave of innovation and cost savings. But out of "28
competitions involving 1,029 full-time equivalent government positions...DOL employees have won all but three
of the competitions DOL has held...from fiscal years 2004 through 2007," according to the report.
When the Bush Administration did find private companies who could win an outsourcing contract, employees
ordinarily either "were reassigned to new positions with the same title and pay or were promoted," states the
study.
The Bush drive often has been called "competitive sourcing." Though the concept has been occasionally
employed by the federal government since 1955, Bush has made competitive sourcing a major part of his
Executive Branch management agenda.
Perhaps that's why the Labor Department--at the behest of Bush budget officials--purposely hid data revealing
the true cost of the outsourcing effort.
The DOL "excluded a number of substantial costs in its reports to Congress--such as the costs for pre-
competition planning, certain transition costs and staff time, and post-competition review activities--thereby
understating the full costs of this contracting approach," declares the GAO report.
Below The American Spark provides key quotes from the study:
"Since 2001, competitive sourcing has been one of the key elements of the President’s Management Agenda,
implemented under guidance from the Office of Management and Budget (OMB) [...].
"Over the years, GAO has reported on a number of issues related to competitive sourcing at various executive
branch agencies, including the extent to which there are plans and guidance to help agencies implement the
competitive sourcing program effectively and whether savings are likely to be achieved.
"The Department of Labor (DOL) began conducting public-private competitions in fiscal year 2004. [...]
"Given that DOL employees have won all but three of the competitions DOL has held, Congress is interested
in determining whether competitive sourcing has achieved increased efficiency or cost savings at DOL.
"In addition, since competitive sourcing may also result in government employees being reassigned or losing
their jobs, Congress expressed concern over DOL’s implementation of this initiative and its implications for the
federal workforce.
"For the most part, we found that DOL’s policies and procedures were followed in conducting competitive
sourcing activities; however, a number of weaknesses inhibit DOL’s ability to reliably and comprehensively
assess whether competitive sourcing achieves the outcomes promised.
"Because of these and other weaknesses, DOL is hindered in its ability to determine if services are being
provided more efficiently as a result of competitive sourcing.
"Moreover, though not a representative sample of DOL personnel, in GAO’s interviews with 60 employees
involved with five competitions...most said that they were dissatisfied with how the competitive sourcing
process was implemented and that it had a negative impact on morale.
"Overall, DOL’s competitions have resulted in few job losses or salary reductions. [...] At the same time, certain
groups have been impacted more than others. For example, though small in numbers, all 22 of those who were
either demoted or laid off were African-American, while 10 of the 15 workers who were promoted were
Caucasian.
"OMB recently issued new guidance that directs agencies to use a variety of tools to manage their commercial
activities, including—but not limited to—competitive sourcing.
"However, unless agencies are required to comprehensively track all the costs associated with competitive
sourcing, it will be difficult to assess which tool may provide the best outcome in terms of efficiency in the
management of commercial activities.
"GAO recommends that OMB direct federal agencies to report all costs associated with competitive sourcing
and that DOL track all such costs. OMB said it would work with the next administration as it considers GAO’s
recommendation. DOL said it would wait for guidance from OMB before tracking all costs.
"GAO also recommends that DOL implement systems to track performance and review the accuracy of its
savings reports. DOL agreed to implement these systems."
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark e-
newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
By Cliff Montgomery - Nov. 26th, 2008
George W. Bush's Department of Labor (DOL) lied to Congress about the benefits of outsourcing government
jobs to private firms, declares a Government Accountability Office (GAO) study released Monday.
The audit discovered that Labor officials employed imaginary budget projections to falsely inflate "savings
report" numbers--even when actual numbers proved the inaccuracy of those projections.
The neo-conservative theory was that democratic governance would prove wildly expensive and inefficient for
the taxpayer, and that private companies would usher in a wave of innovation and cost savings. But out of "28
competitions involving 1,029 full-time equivalent government positions...DOL employees have won all but three
of the competitions DOL has held...from fiscal years 2004 through 2007," according to the report.
When the Bush Administration did find private companies who could win an outsourcing contract, employees
ordinarily either "were reassigned to new positions with the same title and pay or were promoted," states the
study.
The Bush drive often has been called "competitive sourcing." Though the concept has been occasionally
employed by the federal government since 1955, Bush has made competitive sourcing a major part of his
Executive Branch management agenda.
Perhaps that's why the Labor Department--at the behest of Bush budget officials--purposely hid data revealing
the true cost of the outsourcing effort.
The DOL "excluded a number of substantial costs in its reports to Congress--such as the costs for pre-
competition planning, certain transition costs and staff time, and post-competition review activities--thereby
understating the full costs of this contracting approach," declares the GAO report.
Below The American Spark provides key quotes from the study:
"Since 2001, competitive sourcing has been one of the key elements of the President’s Management Agenda,
implemented under guidance from the Office of Management and Budget (OMB) [...].
"Over the years, GAO has reported on a number of issues related to competitive sourcing at various executive
branch agencies, including the extent to which there are plans and guidance to help agencies implement the
competitive sourcing program effectively and whether savings are likely to be achieved.
"The Department of Labor (DOL) began conducting public-private competitions in fiscal year 2004. [...]
"Given that DOL employees have won all but three of the competitions DOL has held, Congress is interested
in determining whether competitive sourcing has achieved increased efficiency or cost savings at DOL.
"In addition, since competitive sourcing may also result in government employees being reassigned or losing
their jobs, Congress expressed concern over DOL’s implementation of this initiative and its implications for the
federal workforce.
"For the most part, we found that DOL’s policies and procedures were followed in conducting competitive
sourcing activities; however, a number of weaknesses inhibit DOL’s ability to reliably and comprehensively
assess whether competitive sourcing achieves the outcomes promised.
- DOL lacks a department-wide process for tracking and addressing deficiencies and recommendations
for improvements that are identified in post-competition accountability reviews.
- Though consistent with OMB guidance, DOL excluded a number of substantial costs in its reports to
Congress—such as the costs for pre-competition planning, certain transition costs and staff time, and
post-competition review activities—thereby understating the full costs of this contracting approach.
- DOL’s savings reports are not reliable: a sample of three reports contained inaccuracies, and others
used projections when actual numbers were available, which sometimes resulted in over-stated savings.
"Because of these and other weaknesses, DOL is hindered in its ability to determine if services are being
provided more efficiently as a result of competitive sourcing.
"Moreover, though not a representative sample of DOL personnel, in GAO’s interviews with 60 employees
involved with five competitions...most said that they were dissatisfied with how the competitive sourcing
process was implemented and that it had a negative impact on morale.
"Overall, DOL’s competitions have resulted in few job losses or salary reductions. [...] At the same time, certain
groups have been impacted more than others. For example, though small in numbers, all 22 of those who were
either demoted or laid off were African-American, while 10 of the 15 workers who were promoted were
Caucasian.
"OMB recently issued new guidance that directs agencies to use a variety of tools to manage their commercial
activities, including—but not limited to—competitive sourcing.
"However, unless agencies are required to comprehensively track all the costs associated with competitive
sourcing, it will be difficult to assess which tool may provide the best outcome in terms of efficiency in the
management of commercial activities.
"GAO recommends that OMB direct federal agencies to report all costs associated with competitive sourcing
and that DOL track all such costs. OMB said it would work with the next administration as it considers GAO’s
recommendation. DOL said it would wait for guidance from OMB before tracking all costs.
"GAO also recommends that DOL implement systems to track performance and review the accuracy of its
savings reports. DOL agreed to implement these systems."
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark e-
newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
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