Feds to Outsource More, Hire Less Under 'Freedom from Government Competition Act of 2025'

The "Freedom from Government Competition Act of 2025" (SEC. 1) basically flips the script on how the federal government gets things done. Instead of using government employees and resources, it pushes agencies to buy goods and services from private companies whenever possible. The core idea, according to the bill's findings (SEC. 2), is that the private sector is more efficient and that the government shouldn't be competing with its own citizens.

Privatizing the Government

This bill mandates a significant shift towards privatization. Unless something is legally required to be done by the government, or it's certified as vital for national defense, homeland security, or a core, "inherently governmental" function, agencies must source it from the private sector (SEC. 4). This includes everything from office supplies to potentially more complex services. The bill requires that if a private company can do it, the government should, in most cases, buy it from them. The justification is to get the "best value to the taxpayer" (SEC.4), but that phrase is not defined in the bill.

Real-World Rollout

Imagine a government office that currently handles its own IT support. Under this law, they'd likely have to contract that out to a private IT firm. Or, consider a federal research lab that produces specialized equipment. They might have to shut down that production and buy the equipment from a commercial supplier – unless they can prove to Congress it's essential for national security or their core mission (SEC. 4(c)).

Even state and local governments won't escape this shift; when spending federal funds, they'll also have to adhere to these privatization rules (SEC. 4).

Challenges and the Big Picture

The bill's definition of "agency" covers a wide swath of the government, including executive departments, military departments, and independent establishments (SEC. 3). The Office of Management and Budget (OMB) is tasked with making the rules to enforce this, and they'll also have to report to Congress annually on how agencies are complying, including a plan to move more activities to the private sector within five years (SEC. 5). This yearly report will include justifications for any activity that remains under government control.

One major challenge is ensuring that private companies actually deliver quality services at a reasonable price. The bill relies on "competitive sourcing analyses" (SEC. 4) to determine the "best value," but that process could be open to interpretation. There's also the potential for job losses among federal employees whose work is outsourced. The bill doesn't directly address retraining or other support for those workers.