Does Competitive Sourcing Really Pay?

Abstract

The Office of Management and Budget (OMB) Circular A-76, Performance of Commercial Activities, has been around for over 40 years. A-76 was commonly used to refer to the process of outsourcing non-inherently governmental jobs in the 1990's. The A-76 circular was substantially revised to simplify and standardize implementation guidance and was released in its current form on May 29, 2003. The OMB now uses A-76 to help implement the competitive sourcing initiative on President Bush's Management Agenda. The stated policy objective in the revised circular is, "To ensure that the American people receive maximum value for their tax dollars", commercial activities should be subject to the forces of competition (OMB, 2003, May 29). The purpose of this study is to determine if A-76 competitions have resulted in saving the taxpayers money. More specifically, has A-76 saved the Department of Defense (DoD) money over the long term?