Contracting Restrictions in New Appropriations Bill

Government contracting may change dramatically under the provisions of the appropriations bill that is now being considered by the House. Significant limits on contracting are contained in the House bill and there would, instead, be an emphasis on having more work done by federal employees.

The “Omnibus Appropriations Bill” that has been unveiled by House Democrats contains language embedded deep within the bill that would have an impact on contracting of work performed by the federal government.

The language in the bill is obviously designed to limit contracting with private sector companies. It is not clear how theses prohibitions would interact with the variety of new spending initiatives contemplated by the stimulus spending bill that has recently been passed.

Perhaps the logic behind the provisions, if any thought has been given to it, is that the prohibitions on contracting will result in hiring large numbers of new federal employees rather than contracting with private companies as the government works to spend the hundreds of billions of dollars in the stimulus bill.

The appropriations bill states that an agency may not conduct a public-private competition under OMB Circular A-76 or under any other law or regulation until several actions are taken by an agency.

If the function is a new one to be performed by the agency, the work must first be assigned to federal employees. Also, for work that is currently being performed by a contractor, “special consideration” must be given to assigning work to federal employees if it was previously performed by federal employees over the past 10 years. (Page 141 under “Financial Services and General Government”.) “Special consideration” must also be given to having the work performed by federal employees if the work as given to a company under a non-competitive bid or if a contracting officer has determined that the work being done by a company has been done poorly.

How this will work in practice remains to be seen. The restrictions do not apply to the Department of Defense which obviously contracts out much of the work on weapons systems and equipment. Why DoD would be treated differently than NASA, for example, which contracts out work on development of space vehicles and systems is not clear.

In any event, if this bill becomes law, which is expected in a relatively short time, government contracting may be different than it has been in recent decades.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47