THE HISTORY AND EVOLUTION OF U.S. GOVERNMENT OUTSOURCING

THE HISTORY AND EVOLUTION OF U.S. GOVERNMENT OUTSOURCING

Introduction

The federal activities inventory reform act of 1998 is considered as one of the most important law formulated by the government to establish or initiate the process of outsourcing free market forces engaged in performing commercial activities. The main purpose of FAIR was to make it obligatory for governmental agencies and programs to obtain inventories from market forces via commercial conducts. As per the circular A-76, this process allows free market sources to catalogue governmental activities, which could be both pure governmental in nature, or commercial, conversion of commercial functions into contract, comparing cost, and conducting feasibility reports. It has been almost half of the century that Bureau of the Budget published its very first bulletin pertaining to this policy that highlighted dependence of government on private sector. However, the congress provided the support and acted upon this law in 1998 so that statuary support is obtained in favor of this policy (Halchin, E. L., 2007).

Circular A-76 turned out to be more efficient and cost saving, which eventually made it more appealing on a conceptual basis. After its launch Circular A-76's popularity was diminished by number of issues experienced by the agencies, its benefit were overshadowed, they found the program to be very time consuming, hard to implement, disruptive and threatening to managers and employees.

The extremely high Budget deficits experienced by US government highlighted the need for cutting spending on nation. The research showed that one of the areas in this regard is to alter the compensation plan availed by federal government which was comprised of 2.1 million of service contractors. As per reports the total amount of wages and benefits provided to executive branch of service contractors was around $236 billion in 2011 (Budget of US Government, 2012). It emphasized on the fact that unfair and high pay scale was one of major federal expense. The pay offered by government should be fair and adequate. However, it is no doubt that the government agencies require highly competent and skillful employees. The decrease in pay offered by government would certainly led to inclining turnover amongst the static governmental workforce (Edwards, C. 2012).

Discussion

History

The Federal Activities Inventory Reform Act 1998 and office of management and budget, under the administration of Bush emphasized on involvement of competitive market forces and that was the primary agenda for the president's management. It is also known as FAIR and represented as an extension of Circular A-76 and further got revised in 1999.

The main purpose of FAIR was to make it obligatory for governmental agencies and programs to obtain inventories from market forces via commercial conducts. This procedure was applicable to purely those governmental activities or functions that could not sustain without contracting. However, it does not make it mandatory for agencies to adapt this methodology directly. The very first application of FAIR was considered as successful with respect to compilation of annual inventories as it highlighted the areas or ...