Show Me the Money

Publication Date: October 2003

Publisher: Economic Policy Institute

Author(s): Max B. Sawicky

Research Area: Business

Type: Brief

Abstract:

Soon after the Bush Administration assumed office in 2001, Director of the Office of Management and Budget (OMB) Mitchell Daniels promised a radical expansion of outsourcing. He claimed that soliciting bids from business firms for work done in the public sector would either save money or provide more service for less cost than if the work were performed by federal employees.

To this end, the OMB issued a revised "Circular A-76," which codifies detailed guidelines on so-called public-private competitions for work now done by federal agencies. However, further evaluation of the principal evidence put forward by the Bush Administration in support of their claim that the A-76 revisions for service contracting will save money shows that this evidence has a number of shortcomings.