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The Bush era of government employees having to compete against the private sector for federal work—and sole source contracting—came to an end in March when President Obama directed top government officials to overhaul the federal government’s contracting guidelines.
Noting that spending on contracts more than doubled under the Bush administration to more than $500 billion in 2008, Obama wrote in a March 4 memo to department and agency heads that sole source and cost-reimbursement contracts have created “a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the federal government or the interests of the American taxpayer.”
The president also said “the line between inherently governmental activities that should not be outsourced and commercial activities that may be subject to private sector competition” under Office of Management and Budget Circular A-76, “has been blurred and inadequately defined.”
While government officials are working on the new guidelines, “competitive sourcing” under the Bush administration’s rewrite of OMB Circular A-76—which left federal employees competing with contractors for work—has been suspended through fiscal year 2009, thanks to a provision in the Omnibus Appropriations Act. The omnibus measure also requires agencies, with the exception of the Department of Defense, to consider what outsourced work should be brought back in-house. [Kathy Walsh]

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