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Big New Reforms Enacted Into Law That Will Help in the Fight Against Contracting Out

The FY08 Defense Authorization Bill, which was signed into law by President Bush on January 29, 2008, includes contracting out reforms that benefit Department of Defense (DoD) employees as well as federal employees across the federal government.

1. COMPETITION RIGHTS (all agencies except DOD): Federal employees in all agencies other than the Department of Defense now have the same right as DoD employees to a more fair public-private competition process before their work may be given to contractors.  These new rights apply even to competitions already in progress. 

Nobody wants to have his job competed—but it’s a lot better than having that same job directly converted, i.e., given to a contractor without any competition.  After all, when federal employees are directly converted, they lose 100% of the time; but when federal employees are competed, they win, according to Office of Management and Budget, 85% of the time. 

HOW IT WORKS: No function performed by ten or more employees in any federal agency may be converted to contractor performance without first allowing the affected employees to submit their most competitive bid (i.e., most efficient organization plan) and conducting a formal cost comparison.  The function must continue to be performed by federal employees unless the contractor can save more money than $10 million or 10% of in-house personnel costs, whichever one is less in this instance. 

WHAT’S OLD: This process is, so far, very similar to the one established for non-DoD agencies in the FY06 Transportation-Treasury Appropriations Bill. The only difference is that the appropriations bill covers functions performed by more than ten federal employees, whereas the new process covers functions performed by ten or more federal employees.

WHAT’S NEW: However, the new process also includes safeguards against management attempts to:

1. use market research unfairly in the streamlined competition process 
2. contract out work we perform without conducting a competition by calling it “new work”
3. change how the function is being performed in order to avoid this competition requirement, including breaking it into functions performed by fewer than ten employees; and
4. contract out the function without competition in order to avoid an in-house personnel ceiling.

The new process also requires that management meet and consult, at least monthly, with federal employees who are being reviewed for contracting out, including the consideration of their views.

In addition, before beginning any A-76 review, the agency must report to Congress on the functions involved, the locations at which the functions are performed, the number of employees who perform the functions, and the anticipated length and cost of the prospective A-76 review.

2. INSOURCING NEW WORK AND CONTRACTED OUT WORK (DOD Only): In between all of the sections in Title 10 that establish rules for contracting out our work is now a brand new section on providing DoD employees with opportunities to perform new work and outsourced work.

INSORUCING RULES: The Under Secretary for Personnel and Readiness is assigned responsibility for writing guidelines and procedures “to ensure that consideration is given to using, on a regular basis, Department of Defense civilian employees to perform new functions and functions that are performed by contractors and could be performed by Department of Defense civilian employees.”  Military departments, like the Army, which has already issued its own guidance (insourcing thus far 300 contractor jobs), can also issue their own guidelines and procedures.

WORK SUITABLE FOR INSOURCING: There are six categories of work that can be brought in-house.  The first four categories involve work already contracted out and the last two categories involve new work:

1. contracted out work that has been performed by DoD employees at any time during the last ten years;
2. contracted out work that is actually inherently governmental or closely associated with work that is inherently governmental;
3. contracted out work that was awarded to a contractor on a non-competitive basis;
4. contracted out work that is poorly performed, as determined by a contracting officer;
5. new work that is similar to work previously performed by DoD employees; and
6. new work that is either inherently governmental or closely associated with work that is inherently governmental.

The A-76 process is allowed by the Congress only for the first category.  A-76 may not be used to insource any other category of work. 

DOD EMPLOYEES CAN ACQUIRE NEW WORK WITHOUT COMPETITION: Another terrible inequity in the A-76 process is its insistence that federal employees—but not contractors—must always undergo a public-private competition in order to acquire new work or when the scope of the work federal employees are already performing increases by a certain amount.  Well, that problem is eliminated for DoD employees.  Managers, who in the past may have been reluctant to bring in new work for fear of having to first conduct an A-76 competition that might be long and costly or who just automatically contracted out new work because it was quicker, can now bring that work in-house without worrying about the A-76 process. 

CONTRACTOR INVENTORY: An inventory of work performed by contractors is being established, in part, to help promote insourcing.  Every year, DoD must submit an inventory to Congress, which will soon thereafter be made public, covering every service contract.  For each contract, we will know, among other things, what work is being done, how much it costs, and how many contractor employees are performing the work.  Every year, DoD must review that inventory to, among other things, look for contracted out work that should be converted to performance by DoD employees.  (It’s like the FAIR Act in reverse—except contractors have no challenge / appeal rights.)

MAKING SURE DOD FOLLOWS UP: The provision assigns the Inspector General with reporting to Congress whether DoD is faithfully implementing this provision. 

WHAT’S NEXT:

1. If you have specific ideas for new work or contracted out work that would be better performed by civilian employees consistent with this provision, please present them to management, copying AFGE’s John Threlkeld (threlj@afge.org). Tell your DoD managers they can bring on new work without conducting competition.
2. If you have specific evidence that DoD is not implementing this provision, please present it to the Inspector General, copying AFGE’s John Threlkeld (threlj@afge.org).
3. Seems like a pretty good idea to apply this provision to all other agencies, doesn’t it? 

3. AUTOMATIC RECOMPETION (DOD Only): One of the many inequities in the OMB Circular A-76 privatization process is that it requires federal employees—but not contractor employees—to be automatically recompeted at the end of their performance periods.  Well, for DoD employees, that problem has been fixed.  Congress simply eliminated the automatic recompetition requirement, although DoD officials can decide on their own to recompete a function. 

WHAT’S NEXT: As will be the case with the other reforms, Office of Management and Budget officials are unlikely to let DoD managers know that their beloved A-76 circular has been changed, so it’s up to us to make sure DoD managers know that Congress eliminated the automatic recompetition provision—the sooner the better.  Don’t wait until your performance period expires.   

If your DoD manager insists on recompeting your workload, insist that she offer a compelling argument for doing so, e.g., the in-house workforce failed to live up to the terms of the performance agreement, and then make her back it up.  And don’t be afraid to make this into a legislative issue.  Most Members of Congress think automatic recompetition is a stupid idea and may very well be sympathetic unless the in-house workforce has really performed so poorly as to make recompetition appropriate. 

Are you part of a non-DoD in-house workforce that has been or will be automatically recompeted?  If so, please contact AFGE’s John Threlkeld at threlj@afge.org. 

4. KEEPING OMB OUT OF DOD’S A-76 DECISION-MAKING (DOD Only): We all know that it’s the political appointees at the Office of Management and Budget (OMB), the agency used by the White House to impose its will on the rest of the agencies, that are the most fanatical advocates for “competitive sourcing”.  Sure, some agencies might conduct A-76 studies on their own, but most are doing so only to get good grades on the scorecard for the President’s Management Agenda, and thus avoiding retaliatory cuts from OMB in their staffing or funding. 

So, what better way to slow down momentum for the Administration’s wholesale privatization effort at DoD than to prevent OMB political appointees from telling DoD officials to conduct A-76 studies and to prevent DoD officials from carrying out A-76 studies at the request of OMB political appointees?  This doesn’t mean that DoD officials can’t decide on their own to carry out privatization studies—and that’s where the problems will come.  After enactment of the FY08 Defense Authorization Bill, how can we tell DoD is carrying out the A-76 because department officials want to do so, or because they are carrying out an order from OMN? 

Because OMB has consistently defied the will of Congress by dictating DoD’s A-76 decisions, lawmakers also included language that allows the Inspector General great access to determine if OMB and DoD are in compliance with this provision.

WHAT’S NEXT:

1. After enactment of the FY08 Defense Authorization Bill, don’t hesitate to challenge your component’s decision-making process on A-76.  Why is management going forward with a privatization review—ask your managers to explain their decision in writing.  They can no longer invoke OMB’s authority or the President’s Management Agenda or the FAIR Act.  In order for DoD to carry out a privatization review, the decision must have been made by DoD officials, completely free of OMB influence.  So how does DoD benefit from an A-76 of your members?  What sort of research was undertaken to justify this A-76 (as opposed to just doing it because OMB said so)?  Was it determined that the performance of comparable services elsewhere in the component or in other DoD components was superior?  If efficiencies are necessary, how come your component can’t use an alternative to privatization reviews that doesn’t have the costs and controversies of the A-76 circular?  Please forward written responses from DoD management to such inquiries to AFGE’s John Threlkeld (threlj@afge.org).

1. If you have evidence that the prohibition on OMB’s A-76 direction is being violated, please provide that evidence to the Inspector General.  If possible, please copy AFGE’s John Threlkeld (threlj@afge.org).  If you know of managers that might be able to assist the Inspector General with this inquiry, please forward their names and their contact information to the Inspector General.

1. Seems like a good idea for non-DoD agencies, too, doesn’t it?  To have a prohibition against OMB directing or requiring non-DoD agencies to carry out privatization studies and a prohibition on non-DoD agencies from carrying out directions or requirements from OMB to use the A-76 process?  Well, AFGE worked successfully to include very similar language in the FY08 Omnibus Appropriations Bill. 

And here are a couple of provisions that we got earlier in the FY08 Omnibus Appropriations Bill which passed on December 26.

5. APPEAL RIGHTS (all agencies): For the first time ever, federal employees in all agencies can appeal bad contracting out decisions to the Government Accountability Office (GAO), so that they can be reviewed for mistakes and bias by an independent third party, the same way contractors always have.

HOW: In order to appeal, more than one-half of the employees threatened by an OMB Circular A-76 privatization effort must select one person to represent their interests.  This person need not be a union member or even a federal employee.  Given the substantial costs of hiring qualified legal counsel, almost all significant appeals will ultimately be paid for by unions.

Here are two things to remember about our new appeal rights:

The appeal rights provision allows for appeals to GAO when work performed by federal employees is given to contractors without an A-76 competition. 

It is never too early to start planning for the selection of an in-house workforce representative to exercise our contracting out appeal rights. 

6. EXCLUDING HEALTH CARE AND RETIREMENT BENEFITS (DOD Only): To the extent contractors can provide savings, it’s usually because they can contribute so much less towards their employees’ benefits than the federal government contributes for federal employees’ benefits. 

Well, that problem has been fixed for DoD employees.   Health care and retirement costs are excluded from the cost comparison process if a contractor contributes less for its employees’ benefits than DoD is required by the Congress to contribute for federal employees’ benefits.

This requirement applies both to A-76 studies undertaken by DoD after enactment of the FY08 Defense Authorization Bill, on December XX, 2007, as well as those undertaken before enactment of the bill.  Don’t let an adverse award decision in any A-76 review be made without making sure that DoD is in compliance with this requirement.  Again, make sure the officials running the competition, including the Agency Tender Official, know about this requirement.  Don’t take it for granted that OMB has told them. 

WHAT’S NEXT: Language that would exclude health care and retirement costs from the cost comparison process for non-DoD agencies is included in the FY08 Omnibus Appropriations Bill.    

AFGE SUCCEEDS IN GETTING HOUSE

TO GRANT TSA OFFICERS BARGAINING RIGHTS

Congress votes to restore collective bargaining,

adverse action appeal, whistle blower protections

After years of pushing for new legislation, and as the only union representing the Transportation Security Administration workforce, AFGE today congratulates the House of Representatives on its vote to grant Transportation Security Administration officers (TSOs) collective bargaining and appeal rights.

“With TSOs deprived of collective bargaining rights, AFGE has been the only union to provide representation before the Disciplinary Review Board, EEOC, courts, in Congress and in the media,” AFGE National President John Gage said. “AFGE has stood beside TSOs since the creation of TSA, and our union will continue to do so.”

With the support of the powerful AFL-CIO, AFGE took the case of worker abuse at TSA to the International Labor Organization, which recently ruled that the agency violated the rights of TSOs by denying them the right to organize and bargain collectively. AFGE also has consistently called for Congress to grant to TSOs the full scope of collective bargaining—for which the House action now clears the way.

Tuesday’s House vote on the 9/11 Commission Bill included repeal of a footnote of the Aviation and Transportation Security Act (ATSA), which called for all TSA employees to have the same basic labor protections of other federal workers. However, a footnote in the ATSA allowed for the TSA Administrator to have sole authority over deciding on the issue of union rights for the TSOs.

“The new House has begun the process of righting a terrible wrong,” Gage said. “TSA’s denial of collective bargaining and other civil service rights is not what Congress had in mind when it created the agency, and TSA no longer will get away with treating its valued employees like second-class workers.

“Of all the federal agencies, TSA embarrassingly leads the way with injury and attrition rates and EEOC complaints,” Gage added. “TSA subjects its employees to workplace discrimination, retaliation, adverse actions, mandatory overtime, and fear of speaking out on issues of security. By repealing the ATSA footnote, the House has said that TSA will no longer be allowed to deny its workers basic labor rights. And, allowing for collective bargaining, whistle blower protection and appeal rights will help improve security by stabilizing the workforce and improving morale.

“We thank Speaker Pelosi, Chairman Bennie Thompson and Rep. Nita Lowey, in addition to all of the congressmen and women who voted for justice,” Gage added.

For more information on AFGE’s campaign to ensure DHS worker rights,

call 1-800-701-9792.