Views on Senate Joint Resolution 93]

Gao ID: B-204276 August 21, 1981

GAO was requested to comment on Senate Joint Resolution 93 which clarifies and reaffirms that it is the general policy of the U.S. Government to rely on competitive private enterprise to supply the products and services it needs whenever competitive industry prices are available. This policy shall be administered by the Director, Office of Budget and Management (OMB), and the Administrator, Office of Federal Procurement Policy. This resolution was introduced in response to a recent GAO report on the role of civil servants and contract employees in the federal government. GAO believes that this resolution has merit and, if enacted into law, would be an important step toward creating a firm national policy of relying on the private sector for goods and services. The resolution, however, leaves some unresolved issues that Congress should address if OMB is to administer the policy and issue specific regulations consistent with congressional intent. Existing OMB policy states that: (1) agencies should generally rely on the private sector for commercial goods and services unless it is more economical to provide them in-house, and (2) all government functions must be performed by federal employees. The recent GAO report stated that executive branch agencies had made little progress in implementing any part of this policy. In considering the resolution, Congress should take a position on the cost comparison issue. The present OMB policy waives the requirement for cost comparisons for critical national defense activities. The resolution does not address the current OMB policy that all government functions be performed by federal employees. Although contractors may not be making final decisions, GAO expressed concern about the extent to which they are influencing agencies' control of federal programs and policies. If the resolution is to be effective, it must strike a balance between: (1) the need to establish a firm national policy on how the government can acquire its goods and services, and (2) the need to keep the resolution's language somewhat general so that OMB has authority to approve exceptions to the general policy that Congress establishes.

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