Quick Facts • Efforts to prevent privatization are not new. In 1998 voters rejected California Proposition 224, which severely limited contracting work to the private sector. A court decision was in place that limited privatization. An initiative to reverse the court decision and allow contracting (Proposition 35) was passed in November 2000. • The General Accounting Office (GAO) estimates there is a $4 billion backlog in "repair and alteration work that need[s] to be completed at federal buildings." Private sector A/E firms are best equipped to accommodate this work.

Issue

The TRAC Act would freeze the award of any further government contracts and is designed to in-source or return work to government employees. This initiative would prevent any further use of private sector resources by federal agencies as well as put a hold on currently contracted activities to determine if they could be done more cost effectively by the public sector.

The House version of the TRAC Act (H.R. 721) was introduced by Representative Albert Wynn (D-MD) and currently has 187 cosponsors. The AIA considers this version of the TRAC Act a threat to the architecture profession and will continue to oppose the bill in its current form. Senator Richard Durbin (D-IL) has introduced a similar measure (S. 1152) in the Senate that includes an exemption for architects. S. 1152 currently has 17 cosponsors.

Background

Since 1966, it has been the federal government's policy to utilize the services of the private sector. Consequently, the federal government has relied on commercial interests to supply the products and services the government needs (OMB Circular No. A-76). Under this current policy, a comparison is made between the cost of contracting to the private sector and the cost of in-house performance.

The TRAC Act would alter the balance of the current public/private partnership. The measure would specifically prohibit any federal agency from making a decision "to privatize, outsource, contract out, or contract for the performance of a function currently performed by such agency or to conduct a study to convert the performance of the function to the performance by a contractor." An agency could apply for permission to contract out, but would first have to conduct a laborious public/private competition. If a private contract would prevent "extraordinary economic harm" and save the government "at least 10 percent," then it could be awarded. However, even if a private entity met this high savings threshold, it would not receive the contract if it would conflict with an established collective bargaining agreement between the agency and a federal labor organization. The legislation also mandates that existing contracts be reviewed.

Attempts have been made to attach "TRAC-like" language to individual appropriation bills. Reps. Neil Abercrombie (D-HI) and Wynn were unsuccessful in amending the Department of Defense authorization and Treasury/Postal appropriation bills. The intent of these amendments is similar to Wynn's stand-alone TRAC Act (H.R. 721), which has been referred to the House Subcommittee on Technology and Procurement Policy. The Senate has yet to hold a hearing on its version of the TRAC Act (S. 1152), which includes an exemption for architectural and engineering services. The AIA will continue to oppose the legislation while supporting the exemptions.

How Legislation Affects the Design Industry

If passed, the TRAC Act (or similar language) would severely reduce government contract work for architects and engineers. Federal agencies manage and coordinate the design process but look to the specialized expertise of private sector architects and engineers to perform the actual design work. Thus, not only would the TRAC Act cripple many private sector firms that supply these valuable services, it would also make it impossible for federal agencies to complete repairs needed to ensure the modernization and safety of federal facilities.