H.R. 4717 on Contracting Out of Federal Functions by the Executive Agencies

Proposed legislation, if enacted, would provide for adjustments to Federal personnel ceilings based upon the extent that Federal functions are contracted out. It is intended to clarify Government policy on the relationship between contracting out and personnel ceilings, and on yearend spending. The Federal work force should be no larger than needed to do the work required to accomplish the programs and activities authorized by the President and the Congress. However, emphasis on limiting the number of persons on the Federal payroll may obscure the reality that the Government incurs the cost of all manpower resources devoted to Federal programs even though many of the people are not on the Federal payroll. Personnel ceilings may be a tool to control the total number of Federal employees, but they are at best an inferior substitute for effective management. Management at all levels needs to aggressively seek ways to improve productivity and coordinate workload, funds, and manpower. The agencies could develop methods for preparing sound estimates of the minimum manpower requirements needed to accomplish all types of authorized programs and activities. The proposed legislation, which refers particularly to contracting for personal services, would require each agency to report to the Office of Management and Budget the number of employees that would have been required to perform the services in-house and would allow the agencies to ask permission to increase their personnel ceilings in order to perform a function in-house rather than contracting it out. While GAO shares the concern that agencies determine the most cost effective means of accomplishing their essential functions, there are a number of problems and factors involved in trying to estimate the total number of personnel needed and the labor costs. The legislation also deals with yearend Government spending and would limit the amount of appropriations an agency may obligate during the last two calendar months of the fiscal year to 20 percent.