(Washington, D.C.) – Citizens Against Government Waste (CAGW) today praised the progress made by the Bush Administration in applying competitive sourcing to the commercial activities of the federal government.  A report from the Office of Management and Budget (OMB), titled Competitive Sourcing: Report on Competitive Sourcing Results Fiscal Year 2003, reveals that public-private competition will generate a projected net savings of $1.1 billion over the next three to five years.  This equates to a net savings of about $12,000 per full-time equivalent employee competed – a cost avoidance of about 15 percent.

“The $1.1 billion figure is not surprising, and could signal an avalanche of savings if competitive sourcing was widely adopted throughout the federal government,” CAGW President Tom Schatz said.  “The government spends billions of dollars a year on more than 850,000 federal jobs that could easily be done by the private sector.  Competition for these services ensures that taxpayers receive the most efficient performance.” 

The fiscal year 2004 Omnibus Appropriations Act required agencies to report annually on their competitive sourcing efforts.  As OMB points out, savings are being achieved despite statutory restrictions, cultural challenges, and a large learning curve at agencies with little experience using competition as a management tool.  One major restriction precludes the DOD from announcing new competitions.

“Congress should remove all remaining restrictions on competitive sourcing.  That could be difficult, since Congress has a penchant for fiscal mismanagement, as evidenced by its out-of-control spending habits,” Schatz continued.  “The OMB report confirms that competition leads to improved production and higher customer satisfaction.”        

As part of President Bush’s Management Agenda reforms, competitive sourcing provides open and fair competition between the private sector and government employees performing commercial work.  It is the administration’s goal to ensure accountability, efficiency, and budget savings; however, there have been several congressional attempts to defeat competitive sourcing.  Last summer, lawmakers placed provisions in the fiscal 2004 Treasury, Transportation and General Government Appropriations Act and in the Defense and Interior departments’ spending bills to undermine the initiative.  The administration was largely successful in getting these provisions removed in conference.

“The OMB report is the latest study to confirm that public-private competition improves service delivery and decreases costs to taxpayers,” Schatz concluded.  “In an age of soaring deficits and public frustration with government services, competitive sourcing must be a top management priority of the federal government.”

Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.