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In the fourth quarter, civilian agencies developed plans to validate savings and performance improvements achieved through public-private competitions. Validations have been planned on more than 70 agency competitions, including awards both to agency "most efficient organizations" (MEOs) and contractors. The competitions selected for validations are projected to produce $3.5 billion in savings for the taxpayer over their full periods of performance.

Independent validations will be conducted by agency Inspectors General offices, competitive sourcing offices, offices that perform similar independent analyses, or contractors other than one that provided consulting services to the agency tender official and MEO team. At a minimum, validations will assess the completeness and accuracy of cost and performance data and evaluate the effectiveness of post-competition management actions.

The Department of Defense (DoD) is conducting a comprehensive independent review to evaluate how its Components are meeting the Circular's post-competition accountability provisions and the Department's internal tracking, validation, and review requirements.

DoD Fights Proposed Legislative Restrictions

DoD has raised strong objections to language in the House and Senate Defense Authorization bills that would limit the Secretary's flexibility in seeking cost-effective and mission critical support through the use of public-private competition. Particular concern has been raised over a provision in the House bill that would suspend pending competitions until a certification has been made at the program level and by the Service Secretary that such competitions were not directed, encouraged, or required by OMB. This suspension is inappropriate and unnecessary, inasmuch as DoD does not announce competitions unless its management has determined that use of competition is in the Department's best interest.

DoD has saved taxpayers over $5 billion as a result of competitions completed from FY 01-06 and expects savings to grow to over $9 billion after completion of all competitions initiated in FY 2007. In FY 2007, DoD announced competitions involving almost 6,300 full-time employees (FTEs). At the end of FY 2007, approximately 50 ongoing competitions across DoD involved nearly 10,000 FTEs.

Competitive sourcing activity in the Fourth Quarter

Agencies continue to compete selected commercial activities where the benefits of competition can help achieve savings and cost avoidances for the taxpayer. Highlights of competition activity include the following:

• The Department of Health and Human Services completed nine competitions and announced 17 competitions in the fourth quarter, covering functions such as benefits and entitlements support services, administrative support, pharmacy and health services, IT systems development, accounting, and space management.
• The Department of Interior's Geological Survey completed a competition for analytical support at its National Water Quality Laboratory resulting in award to the agency's MEO.
• The Department of Education completed a competition of its call center and training services for Education's Central Automated Processing System (EDCAPS). EDCAPS is part of ED's strategic plan that calls for improved financial management and information systems to support its core management functions. Work will be performed by a private sector provider.