NGWA Position Statement On Government Competition
Summary: Federal and state governments own and lease drilling equipment and use government employees to perform ground water-related drilling that could be performed by the private sector. The federal government's policy regarding the performance of commercial activities is contained in Circular A-76 and states:
"The Federal Government shall rely on commercially available sources to provide commercial products and services. In accordance with the provisions of this Circular, the Government shall not start or carry on any activity to provide a commercial product or service if the product of service can be procured more economically from a commercial source."
Circular A-76 establishes a policy of achieving economy and enhancing productivity through the use of cost comparisons. Whenever commercial sector performance of a Government operated commercial activity is permissible, comparison of the cost of contracting and the cost of in-house performance shall be performed to determine who will do the work.
Circular A-76 defines commercial activity as: "... one which is operated by a Federal executive agency and which provides a product or service which could be obtained from a commercial source..." A Governmental function is defined as "...a function which is so intimately related to the public interest as to mandate performance by Government employees. These functions include those activities which require either the exercise of discretion in applying Government authority or the use of value judgment in making decisions for the Government."
Research and development are not within the scope of Circular A-76, however, several in-house commercial activities in support of research and development are normally subject to the Circular and its Supplement.
Recommended Position:
- Relevant Issue Briefs may include Water Well, Monitoring
Well and Pump Contractor Licensing, Grouting of Water Wells,
Decommissioning of Wells and Boreholes
- To the maximum extent possible, government should contract
with private sector firms for the performance of ground water
investigations and development, including but not limited to
exploratory drilling, installation of wells for monitoring
ground-water quality and elevation, site-specific ground-water
contamination assessments and remediation, and wellhead
protection delineation.
Government agencies should continue to focus their efforts on performing traditional regional geologic and hydrologic studies, as well as continue such research and development activities that are of benefit to the ground-water industry and the general public.
- Drilling falls within Circular A-76's definition of
commercial activity.
- A fair accounting system should be adopted for use when
performing cost comparisons that measure the full cost of
procuring drilling services through the public or private
sector. This accounting system should address both direct
operating costs and all indirect overhead costs of
administration plus equipment ownership and maintenance costs.
- Government agencies should not be competing with the private
sector. Typically, ground water consulting and drilling firms
are small size businesses and, as matter of policy, government
should not be competing on work traditionally handled by the
private sector.
- Industry stands ready to work with government agencies to
address any impediments to the contracting out of drilling
activities.
- Government agency employees should be required to follow any substantive well construction, well decommissioning and driller safety requirements, including having government employees licensed. These measures are necessary to protect employees and the ground-water resource.
Excerpted from Government Competition Supporting Document approved by the National Ground Water Association's Government Affairs Committee on August 19, 1993.
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Last Updated November 26, 1997
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