RESPONSIBILITY AND ACCOUNTABILITYIN CONTRACTING OUT ACT (H.R.
The National Air Traffic Controllers Association supports
the Truthfulness, Responsibility and Accountability in
Contracting Out (TRAC) Act which would simply correct several
longstanding problems and inequities in the contracting out
process. Specifically, H.R. 721 would temporarily
suspend new federal service contracting until agencies:
establish reliable reporting systems to track costs and
savings from contracting out; prevent contracting without
public-private competitions; and subject contractor work to
BACKGROUND AND ANALYSIS
Privatization and outsourcing have become a worldwide trend
gaining popularity over the years. We have witnessed all
levels of government, seeking to reduce costs, turning over
general public services to the private sector.
Proponents argue that competition in the private sector allows
companies to provide services more efficiently while reducing
costs. However, studies show no clear evidence with
respect to the costs and benefits of privatization.
Nevertheless, public perception, budget constraints and
pressure for improved government operations will keep
privatization on the agenda.
Under the Federal Activities Inventory Reform Act, agencies
are required to submit annual lists of jobs that are
commercial in nature and therefore eligible for contracting.
With implementation of such legislation, the problems
associated with contracting out are likely to get worse.
President Bush supports contracting 450,000 federal jobs to
the private sector and mandating A-76 competitions for half of
the positions listed on the FAIR inventories. In March
2001, the Office of Management and Budget ordered agencies to
open up at least five percent of their FAIR list jobs to
Under the FAIR Act, approximately one million federal jobs
have been identified as commercial in nature. Yet, there
is little information about the size of the contractor
workforce or how contractors treat their employees.
Currently, there are approximately 1.8 million federal
employees. Some estimate the contractor workforce to be
about 4 million employees.
While proponents of contracting assert substantial cost
savings, it is generally accepted that any reported cost
savings from contracting are at the expense of employee
salaries, benefits, training, working conditions and
equipment. And, what appears to be cost savings is often
illusionary because of the direct and indirect costs that are
not taken into consideration.
Provisions of the TRAC Act:
- Reporting Requirements: The bill would require
agencies to track costs and savings from contracting.
In addition, agencies must submit annual reports to Congress
on the number of federal employee positions and the number
of non-federal employee positions held under a contract that
has been subject to public-private competition.
- Public-Private Competition: The bill requires that
all contracting out decisions and contract renewals be based
on public-private competition. Currently, only work
performed by federal employees is subject to public-private
competition. Private contractors should be subject to
the same level of competition and scrutiny.
- Contractor Performance Review: The bill would
convert functions back to performance by federal employees
or require the agency complete a new public-private
competition if the costs of outsourcing exceeded anticipated
costs for two consecutive years, or fail to meet quality
- Wages and Benefits: Since contractor savings are
often derived at the expense of employee salaries and
benefits, the bill directs the Secretary of Labor to conduct
a survey of wages and benefits provided by contractors
during the past two fiscal years.
- Temporary Suspension of Contracting: The bill
would temporarily suspend new service contracts until the
problems associated with indiscriminate contracting are
fixed. The bill does allow for waivers from the
suspension for national security, patient care, and
avoidance of economic harm. However, these waiver
decisions would not be subject to review or appeal.
H.R. 721 was introduced on February 14, 2001 by Congressman
Albert Wynn (D-MD) and referred to the House Government Reform
Committee where no further action has been taken. The
bill has 138 cosponsors.