While we here in the Budget Brigade are thankful that our respective alma mates are poised to clinch BCS bowl berths (hook 'em, Horns!), we are even more thankful that President Elect Obama has serious concerns about the current BCS system. That's change we can believe in!

The Budget Brigade will return to the BudgetBlog on Monday.

Have a great Thanksgiving and enjoy the day.

Image by Flickr user Jennifer13 used under a Creative Commons license.

The Government Accountability Office (GAO) released a new report on Friday on the Bush administration's competitive sourcing initiative, which allows the federal government to hold public-private competitions for the right to deliver commercial services for the government (things like janitorial services or food preparation or maintenance). If a private sector bid can show savings of $10 million or more or 10 percent of the cost of providing those services in-house, they win the competition. /p>

The Bush administration has repeatedly claimed fairly significant savings as a result of the competitive sourcing program - just see about any report on this OMB webpage (btw, the program was recently renamed by the Bush administration to the "Commercial Services Management Initiative"). Unfortunately, there continues to be evidence that these claims of savings are either intentionally overstated, or flat out made up.

The latest GAO report echoes past criticisms of the competitive sourcing initiative - this time after studying its implementation at the Department of Labor (DOL). From the report's summary:

DOL lacks a departmentwide process for tracking and addressing deficiencies and recommendations for improvements that are identified in postcompetition accountability reviews.

Though consistent with OMB guidance, DOL excluded a number of substantial costs in its reports to Congress—such as the costs for precompetition planning, certain transition costs and staff time, and postcompetition review activities—thereby understating the full costs of this contracting approach.

DOL's savings reports are not reliable: a sample of three reports contained inaccuracies, and others used projections when actual numbers were available, which sometimes resulted in overstated savings.

Because of these and other weaknesses, DOL is hindered in its ability to determine if services are being provided more efficiently as a result of competitive sourcing.

In addition, the GAO report found that federal employees who participated in the competitions felt demoralized by the process and felt it wasn't implemented well - a fact that has not escaped the notice of Rep. David Obey (D-WI) and Sen. Tom Harkin (D-IA) - the two legislators who requested the GAO to study this program at DOL. GAO also points out on page 6 that these finds are similar to other studies they have conducted of the competitive sourcing initiative at the Departments of Defense and Agriculture.

The National Journal has been reporting this week that current Congressional Budget Office (CBO) Director Peter Orszag is in line to head up the Office of Management and Budget in the upcoming Obama administration. Orszag formerly served as a senior economic adviser during the Clinton administration and held a post in the economics studies program at the Brookings Institution.

Orszag has been impressive in his two year stint as the head of the CBO, which he began in January, 2007 and I think he would be an excellent choice to run the OMB for Obama. BudgetBlog readers will certainly know that we have high esteem for Dr. Orszag.

Argh! More bad news about the Defense Contract Audit Agency (DCAA), the watchdog at the Department of Defense that is supposed to watch out for waste and fraud within the agency's enormous contracting apparatus.

DCAA was in the news a lot this summer (see here, here, here, and here) after information surfaced showing the DoD spends too little on contract oversight and interferes with current auditors to restrict the length and scope of investigations. It doesn't look like things have improved much since then.

The Associated Press reported yesterday that defense contractors, particularly the Bechtel Group, had "chronic failures" in handing over financial records and other documents to the DCAA needed to perform audits.

The article also cites Raytheon, Northrup Grumman, and KBR as giving the DCAA trouble. In the widely publicized KBR incident over the summer, top officials at the DCAA would not back up auditors who balked at over $1 billion in unsubstantiated payments.

One auditor quoted in the AP article from yesterday hits the nail on the head about why strict oversight by agencies like the DCAA are so important:

The Bechtel episode illustrates how tolerant the agency can be when defense contractors slow the government's access to paper records and databases. There is no way to know how often DCAA withholds payments because it does not keep track. And it has not used its subpoena power in 20 years.

"We have been basically on the trust system for years," said the auditor who attended the May meeting. "It did not work on Wall Street and it is not working for federal contracts," said the two-decade veteran of the agency who spoke on condition of anonymity because DCAA employees are not allowed to publicly discuss their work.

Trust system? Seriously? What ever happened to "trust but verify?"