State of Affairs

1. State of Affairs JOB PRIVATIZATION • The federal government wants to outsource 100,000s of federal jobs to private contractors. • No one is going to stand up for our jobs unless we do it first.

2. Job Privatization Database JOB PRIVATIZATION Information Collected in the Database • Agency, affected office/installation/location. • Numbers of affected AFGE Locals. • Contact information for AFGE activist providing the information. • Type of privatization: direct conversion or A-76 competition. • Timing of the privatization activities. • Number and description of employees affected. • Activities being reviewed for outsourcing.

3. Definition of Privatization JOB PRIVATIZATION For our purposes, “privatization” means an act by a federal agency which results in the transfer of functions from performance by federal employees to performance by a private contractor.

4. Two Types of Privatization JOB PRIVATIZATION • Privatization Resulting from Direct Conversion • Privatization Resulting from Competition under OMB Circular A-76

5. Direct Conversion Privatization JOB PRIVATIZATION • The agency claims to be “getting out of the business” of performing a particular function. • That function, which was formerly performed by federal employees, is transferred to private contractors. • There may or may not be a competition to determine which private contractor will perform the function. • No bid is submitted on behalf of the federal employees to compete for the work.

6. A-76 Competition Privatization JOB PRIVATIZATION • The agency currently performs a particular function and plans to retain oversight of that function. • A competition is held to determine whether federal employees or a private contractor will perform the function. • A bid or cost estimate is submitted on behalf of the federal employees to compete for the work.

7. What is the Difference? JOB PRIVATIZATION • The distinction between an agency (1) “getting out of the business” of performing a task and instead hiring a contractor to do it and (2) transferring performance of a task to a contractor that the agency oversees is a hazy one. • Agencies may try to get around the rules of A-76 competitions by claiming they are doing a direct conversion.

8. Rules of the Process JOB PRIVATIZATION • Federal Activities Inventory Reform Act (“FAIR Act”). These rules apply to the A-76 competition process. • OMB Circular A-76 (2003) (“the Circular”). These rules apply to the A-76 competition process • Federal Acquisition Regulations (“FAR”). These rules apply to the direct conversion process and in part to the A-76 competition process.

9. Stated Policies of the Circular JOB PRIVATIZATION • The federal government has a history of relying on contractors for commercial services. • Taxpayers should receive maximum value for their tax dollars. • Taxpayers will get maximum value if commercial activities are subject to the forces of competition.

10. Unstated Policies of the Circular JOB PRIVATIZATION • The federal government should rely on contractors for commercial services. • By commercial services, they mean everything but management jobs. • Federal employees need to justify performing commercial services.

11. Three Rules of the Circular JOB PRIVATIZATION • Federal agencies must identify all activities performed by federal employees and determine whether they are “commercial” or “inherently governmental”. • “Inherently governmental” activities should only be performed by government employees. • “Commercial” activities should be put up for competition using either a streamlined or standard competition.

12. Three Rules of the Circular JOB PRIVATIZATION • All other rules in the Circular tell you how these three rules work and the exceptions to these rules.

13. The Inventory Process: Overview JOB PRIVATIZATION • The FAIR Act, passed in 1998, requires every agency to publish an annual list of all commercial activities performed by federal employees. • The Circular requires every agency to publish an annual list of all inherently governmental activities performed by federal employees. • These two inventories are often merged into a single document that designates activities as (“I”) or (“C”).

14. The Inventory Process: Timing JOB PRIVATIZATION • Agencies submit their inventories to OMB by June 30th of each year. • OMB reviews the inventories. • After their review, OMB publishes a notice of inventory availability in the Federal Register and often on the OMB website.

15. The Inventory Process: Challenge JOB PRIVATIZATION • Federal employees have 30 working days from the time of the notice to challenge the designation of an activity on the Inventory. • If a challenge is denied, an appeal can be filed within 10 working days. • Federal employees at each agency should file a challenge. Consult the Handbook and Diana for help.

16. The Inventory Process: JOB PRIVATIZATION Classifying Activities • Activities must be classified as either “inherently governmental” or “commercial”. • Definition of “commercial” activities: those that are not inherently governmental.

17. The Inventory Process: JOB PRIVATIZATION Classifying Activities: Inherently Governmental • An “Inherently Governmental” activity is an activity that is so intimately related to the public interest that it mandates performance by government personnel. • The activity must require the exercise of substantial discretion in applying government authority and/or in making decisions for the government.

18. Streamlined Competition JOB PRIVATIZATION • Can only be used if 65 or fewer FTEs are at stake. • Generally cannot exceed 90 calendar days (unless a time limit waiver is obtained).

19. Streamlined Competition JOB PRIVATIZATION • Cost of performing the work in-house is compared to cost of performing the work by contractors. • In-house cost is based on an (1) the historical cost or (2) an estimate of costs if the in-house structure was redesigned to be more efficient. • The contractor cost is based on (1) actual contractor bids or (2) estimates from market research.

20. Standard Competition JOB PRIVATIZATION • Can be used if 65 or fewer FTEs are at stake. • Must be used if over 65 FTEs are at stake. • Generally cannot exceed 12 months (unless a time limit waiver is obtained before the competition starts).

21. Standard Competition JOB PRIVATIZATION • Cost of performing the work in-house is compared to cost of performing the work by contractors. • In-house cost is based on an estimate of costs if the in-house structure was redesigned to be more efficient (this restructuring is called a Most Efficient Organization). • The contractor cost is based on actual contractor bids.

22. Standard Competition JOB PRIVATIZATION Conversion Differential • Safeguard requiring that marginal savings be anticipated before work is shifted from federal employees to an outside contractor. • Requires that a contractor bid beat the in-house bid by at least the lesser of (1) 10% of the in-house bid personnel costs or (2) $10 million. • Also called a Minimum Cost Differential (MCD).

23. Standard Competition JOB PRIVATIZATION Contesting a Decision • Federal employees do not have the right to contest a decision to contract out to a third party, such as GAO. However, contractors have the right to appeal a competition decision to GAO or the courts. • The decision to contract out is not subject to grievance or arbitration.

24. Job Privatization Database JOB PRIVATIZATION • The federal government wants to outsource 100,000s of federal jobs to private contractors. • AFGE is setting up a database to track privatization activities and the impact on federal employees.

25. Job Privatization Database JOB PRIVATIZATION What can AFGE Activists Do? If work performed by federal employees at your office or installation is being privatized, either under the Circular or without any competition, please contact the AFGE Public Policy Department at (202) 639-6408.

26. Job Privatization Database JOB PRIVATIZATION Information Collected in the Database • Agency, affected office/installation/location. • Numbers of affected AFGE Locals. • Contact information for AFGE activist providing the information. • Type of privatization: direct conversion or A-76 competition. • Timing of the privatization activities. • Number and description of employees affected. • Activities being reviewed for outsourcing.

27. This conference is just the beginning…Make sure you take it home. JOB PRIVATIZATION

28. IT’S the GRASSROOTS Stupid! JOB PRIVATIZATION

29. AFGE voted 63% for Kerry JOB PRIVATIZATION We didn’t loose the election… We shouldn’t loose this fight

30. JOB PRIVATIZATION Cycle of Accountability OR…Three ways to show your law maker you care! Electoral Legislative Grassroots

31. JOB PRIVATIZATION It’s our job to connect lawmakers with voters… It’s up to us to mend the gap.

32. JOB PRIVATIZATION Build a Grassroots Structure • Activism • Collect Data

33. Brainstorm:What are some of the ways to communicate with the grassroots to get them educated and activated? JOB PRIVATIZATION

34. Examples: JOB PRIVATIZATION • Email alerts • Postcards • Human newsletters

35. GROUP EXERCISE: JOB PRIVATIZATION 1.Name ONE thing the national can do to help you. 2.Name ONE thing you will do to help what the national is doing.

36. JOB PRIVATIZATION We have the power! Don’t let them convince you otherwise!