Section 832 of the Floyd D. Spence National Defense Authorization Act of 2001 (the Act) required that I, as Comptroller General of the United States, "convene a panel of experts to study the policies and procedures governing the transfer of commercial activities for the Federal Government from Government personnel to a Federal contractor ..." In accordance with the Act, I am pleased to transmit to Congress the report of the Commercial Activities Panel (the Panel) convened to satisfy this statutory requirement. Given the importance of this issue, I elected to chair this Panel and ensured that it was comprised of highly qualified and empowered representatives from the groups specified in the Act and other knowledgeable individuals. A diverse group of high-level members were selected as panelists in order to broaden the scope and enhance the quality of our deliberations, while increasing our chances of success.

Commercial Activities Panel: Improving the Sourcing Decisions of the Federal Government

The Commercial Activities Panel is a congressionally mandated panel to study, and make recommendations for improving, the policies and procedures governing the transfer of commercial activities from government to contractor personnel. The growing controversy surrounding competitions under the Office of Management and Budget's Circular A-76 to determine whether the government should obtain commercially available goods and services from the public or private sectors led to the establishment of this Panel. In establishing the Panel, several steps were taken to ensure representation from all major stakeholders as well as to ensure a fair and balanced process. To ensure a broad range of views on the Panel, a Federal Register notice was used to seek suggestions for the Panel's composition. As the Panel began its work, it recognized the need for a set of principles for sourcing decisions. These principles provide for an assessment of what does or does not work in the current A-76 process and provide a framework for identifying needed changes. Many of the Panel's recommendations can be accomplished administratively under existing law, and the Panel recommends that they be implemented as soon as practical. The Panel also recognizes that some of the recommendations would require changes in statutes or regulations that could take some time. Any legislative changes should be comprehensive and considered to achieve a reasonable balance.

The dramatic growth of government over the course of the twentieth century since the New Deal prompts concern among libertarians and conservatives and also among those who worry about government’s costs, efficiency, and quality of service. These concerns, combined with rising confidence in private markets, motivate the widespread shift of federal and state government work to private organizations. This shift typically alters only who performs the work, not who pays or is ultimately responsible for it. “Government by contract” now includes military intelligence, environmental monitoring, prison management, and interrogation of terrorism suspects. Outsourcing government work raises questions of accountability. What role should costs, quality, and democratic oversight play in contracting out government work? What tools do citizens and consumers need to evaluate the effectiveness of government contracts? How can the work be structured for optimal performance as well as compliance with public values? Government by Contract explains the phenomenon and scope of government outsourcing and sets an agenda for future research attentive to workforce capacities as well as legal, economic, and political concerns.