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GAO-03-579R 1 (2003-06-30)

handle is hein.gao/gaobaamgb0001 and id is 1 raw text is: I Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 June 30, 2003 The Honorable Lane Evans Ranking Democratic Member Committee on Veterans' Affairs House of Representatives Subject: VA Health Care: Contract Labor Cost Analysis in RAND Study Dear Mr. Evans: The Department of Veterans Affairs (VA) spent about $23 billion to provide health care to over 4 million veterans in fiscal year 2002. To provide this care, VA relied primarily on its own employees, totaling about 190,000. VA also used contract employees, sometimes referred to as contract labor, to provide these services. In response to the requirements of the Federal Activities Inventory Reform Act of 1998 (the FAIR Act),' VA compiled an inventory of more than 180,000 full-time equivalent (FTE) positions that it determined to be health care commercial in nature. This means that the work carried out in these positions is also done in the private sector and could potentially be done by contract labor. As part of its management initiatives, the Office of Management and Budget (OMB) has emphasized that competition should be used to determine the most effective and efficient way to provide commercial services. The process used to make this determination-referred to as competitive sourcing-is established in OMB Circular A-76. This process generally provides for competition between the government and the private sector on the basis of costs or costs and other factors. OMB has established competitive sourcing FTE targets for federal agencies to achieve as part of OMB's management initiatives. In response to OMB's FTE target for VA, VA established a plan to complete studies of competitive sourcing of 55,000 positions by 2008. 1Pub.L. No. 105-270, 112 Stat. 2382. The FAIR Act requires federal agencies to submit an annual inventory to the Office of Management and Budget of all their activities performed by federal employees that are not inherently governmental functions, that is, they are commercial in nature. OMB has defined a commercial activity as one that is a recurring service that could be performed by the private sector and is resourced, performed, and controlled by the agency through performance by government personnel, a contract, or a fee-for-service agreement. OMB Circular A-76, p. A-3, May 29, 2003. GAO-03-579R VA Contract Labor

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