The Obama Factor

Exciting new developments. I'm reproducing a couple of my own posts on the board I administer:

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It's not exciting to most people, but this is the best news I've heard out of the White House for decades. Obama apparently is taking the problem seriously and is proposing an appropriate response to the dreadful state that Federal contracting has reached.

Obama's directive would order Peter Orszag, director of the White House Office of Management and Budget, to work with Cabinet and agency officials to draft new contracting rules by the end of September. Those new rules, officials said, would make it more difficult for contractors to bilk taxpayers and make some half-trillion dollars in federal contracts each year more accessible to independent contractors.

...Obama will say that his administration will stop outsourcing to private contractors many services that should be performed by government employees. He also pledged to open contracts to small businesses and eliminate "unnecessary" no-bid contracts that allow preferred contractors to take assignments even though they might not be the least expensive option.

I could tell you stories about outrageous giveaways to contractors that I hope would make you as angry as they made me. I've made myself a real nuisance at work on this, have reported especially bad acting to our Inspector General on a couple of occasions, and gone straight to the Commissioner on another. It had only a minor effect (I managed to force a few million dollars in savings, but tens of millions were left on the table for the pigs). I saw it happening in the early Reagan years (that one was a doozy--someone should have gone to prison) and it has only gotten more routine since.

In a nutshell, our Contracting Officers got lazy, our executives joined the revolving door culture pioneered by the Pentagon, and billions of dollars are simply being thrown at corporations that aren't giving full value (or sometimes any value). The Federal Acquisition Regulations are being ignored. All the right laws and procedures are on the books; what we need is for the boss to tell us to follow them instead of find a way around them. For the first time in my 34 year career, it looks as though we may have that boss. If something really good does happen out of this expression of good intentions, it will have positive ramifications for decades to come. This is the kind of reform that pays big permanent dividends across every agency.

Also:

For many years, the IRS has, at the insistence of the Reagan, Bush, Clinton, and Bush Administrations, run a series of pilot programs in which private collection agencies were given a (relatively) small number of accounts to collect on. Our union always fought it, but the political fix was in. Al Gore's "reinventing government" was, from my perspective, a thinly disguised push to contract out inherently governmental functions, which is one reason I was not enthusiastic about him as President. The Republicans were even worse. Even the most slanted analyses never showed that the private agencies were as cost-effective as employees, and they generated more complaints from taxpayers because they often were too aggressive. (The firms got a percentage of what they collected--you can imagine how they dealt with hardship cases.)

Today, I got the following message from the IRS Commissioner:

From: *Commissioner Shulman
Sent: Friday, March 06, 2009 8:44 AM
To: &&Employees All
Subject: Private Debt Collection

As I have conducted town hall meetings across the country, IRS employees have frequently asked me about the private debt collection program, which I know has received a lot of attention over the last several years.

Today, I want to let you know that we have decided not to renew the private debt collection contracts with two private collection agencies. I arrived at this decision for several reasons.

First, IRS employees are in the best position to handle this collection work. We have conducted a cost-effectiveness study of the private debt collection program. The study -- supported by an independent review -- showed that it is reasonable to conclude that when working similar inventory, collection efforts are more cost-effective using our own employees rather than outside contractors.

In addition, in these challenging economic times, I have asked all IRS employees to go the extra mile to help financially distressed taxpayers. IRS employees have a much wider range of options available to them to resolve difficult collection cases. We will see more of these tough collection situations in the months ahead, and our employees are the best-positioned to work with people and resolve these issues in a fair, equitable manner.

Finally, Congress is currently considering the Fiscal Year 2009 budget, which would provide the IRS with significant new funding for enforcement initiatives. I'll be talking to you in more detail soon about this. For now, I think it's important to note that these new potential hires will give the IRS more flexibility to make assignments based on the areas of greatest need -- rather than filtering limited cases through contractor resources.

Finally, thanks again for your continued efforts and dedication for the IRS and the nation's taxpayers

-Doug Shulman

There is absolutely no way this could have happened had the word not come down from Obama and Geithner to kill this initiative. It'll piss off the contractors, and apparently they don't call this tune anymore. It's good news for everyone who cares about good government and basic fairness towards both the taxpayers and government employees. From my perspective in the trenches of the Federal Govt, Change Has Come. And lo, it is good.