Mr. SERRANO, from the Committee on Appropriations, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 2829]
The Committee on Appropriations submits the following report in explanation
of the accompanying bill making appropriations for financial services and
general government for the fiscal year ending
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A strong Federal workforce needs to exist if government is to deliver effective services to the American people. Unfortunately, the Federal workforce has been under attack. This attack dates to the previous Administration and efforts to `reinvent' government and `right-size' the workforce. `Right-sizing' was a code word for `downsizing', and downsizing often resulted in reduced services for citizens.
The current Administration has taken this concept a step further by increasing reliance on contractors, cutting back on the resources--people and money--for basic government services, and allowing the physical infrastructure of government to deteriorate. There has been too little emphasis on creating a workforce that is `right-skilled' or on offering the `right-services'. These ill-advised policies result in a government that is distant from the people that it should serve; government needs to return to being easily accessible and helpful to all Americans.
In 1980, the Federal civilian workforce totaled 1.2 million people. Since that time, the population of this Nation has increased 32 percent, while the number of civilian workers providing services to those people has declined 13 percent. That number has declined by 10 percent just since 1994.
The decline in the public's accessibility to government services is also reflected in the cutting back of locations throughout the Nation where the public can go for assistance. Agencies' regional or state offices have been eliminated or consolidated in order to save a few dollars, but the real impact is seen in the public's reduced accessibility to government. For example, the Department of Agriculture's Farm Service Agency (FSA) closed 418 local offices across the country from 1995 to 2006 in order to manage its reduced budget and staff. This forces farmers to either stop using FSA services or drive many extra miles to visit an office. The Federal government needs to put resources where they are most needed to provide the services it offers.
In addition to people, these resources must include physical infrastructure to support government services. Major public physical capital investment has declined as a percent of gross domestic product from 2.8 percent in the mid-1980s to an estimated 1.5 percent in fiscal year 2008. An example of this decline can be seen in spending on grants for investments in community and regional development, which fell 61 percent in inflation-adjusted terms from fiscal year 1980 to fiscal year 2006.
Government contracting. While the current Administration likes to take credit for `reducing' the size of government, it has also overseen the largest expansion of a `hidden government' of contractors in the history of the Nation. Spending on federal contracts has grown by $175 billion under this Administration and totaled roughly $400 billion in fiscal year 2006. This makes contracting one of the fastest, if not the fastest, growing component of the Federal budget. This trend does not bode well for the future as it becomes harder to monitor contractor performance and ensure the effective use of taxpayers' dollars.
It should also be noted that the United States Government Accountability Office has listed the management of government contracting as a high-risk area due to weaknesses that were discovered in the management and oversight of contractors specifically by the Departments of Defense and Energy, as well as the National Aeronautics and Space Administration.
Earlier this year, the Committee included in H.R. 1591, the U.S. Troop Readiness, Veterans' Health and Iraq Accountability Act, several provisions to address questionable government contracting practices. These provisions would minimize sole source contracting and cost-reimbursement contracting, require public disclosure of the justification for non-competitive contracts, and improve disclosure of government contractor overcharges.
The growth of the hidden government is also seen in persistent efforts to outsource Federal jobs to contractors. The effectiveness of agencies is measured in part by the Office of Management and Budget by the number of OMB Circular A-76 competitive sourcing competitions they carry out for tasks currently performed by Federal employees. However, replacing Federal workers with contractors raises a host of serious questions relating to the true cost of the contractors. Such cost includes the loss of skilled, technical experts in the Federal workforce who have institutional knowledge and are able to monitor effectively contractor performance.
A-76 competitions that do not take into account all the costs of contracting threaten the future viability of the Federal workforce. This bill addresses this problem by continuing and strengthening language on public-private competitions that has been included in recent appropriations bills.
Congress has made significant reforms in the way it reviews funding for the Federal government; reforms which the Committee takes very seriously as it executes its constitutional authority. Earmarking or directed spending of Federal dollars does not begin with Congress. It begins with the Executive Branch.
The Administration, in selecting projects, goes through a process that is the functional equivalent of earmarking. When the Committee reviews the budget request, it goes through a process of rigorous review and may alter or modify this list to reflect additional priorities.
The Executive Branch also engages in another practice which steers or directs money to specific entities or purposes through a process of contracting out various activities and services.
In many important work locations, the number of people working for contractors exceeds the number of Federal employees in the same building or location. Many of these, in fact, are non-competitive or sole-sourced. When added together, the Executive Branch steers or directs far greater spending to specific projects or corporations than is directed or earmarked by Congress. And the practice of non-competitive contracting has exploded in the past five years.
As noted previously, A-76 competitions potentially outsource Federal workforce responsibilities and result in the loss of technically skilled Federal workers, institutional knowledge and effective oversight over worker performance. Limited-sourcing and sole-sourcing of contracts is another area that has grown rapidly and is a source of concern. In fiscal year 2000, 18 percent of the Treasury Department's outside contracts were not competitively bid. By fiscal year 2006, that number had risen to 28 percent. In fiscal year 2006, the Treasury Department awarded more than $1,000,000,000 in contracts that were not competitively bid.
There is also a higher potential for abuse. The General Services Administration's (GSA) Office of Inspector General (IG) and the House Committee on Oversight and Government Reform continue to investigate the award of a no-bid contract by the GSA Administrator to a longtime associate. Within two months of Senate confirmation, the Administrator signed a contract for $20,000 for a 24-page report promoting the GSA's use of minority- and women-owned businesses. Issues surrounding this contract include the lack of competition in the award process, the drafting of the statement of work by the company, and the non-disclosure of the Administrator's longstanding business relationship with the recipient of the contract. The GSA IG stated in testimony that, `we are talking about the violation of key contracting principles--promoting open competition . . . and avoiding any appearance of personal favoritism in awarding government business--by the leader of the Government's premier civilian contracting agency.' Evidence further suggests that a number of actions were taken by the head of this company with the expectation of payment by GSA. While no payment was ultimately made, nonetheless, this action marks an example of potential abuses through the use of sole source contracting.