As
a Congressional committee works to combine the House and Senate
versions of the Fiscal Year 2010 Defense Appropriations bill, U.S.
Senators Charles E. Schumer and Kirsten Gillibrand today urged the
committee to include a provision to prevent the loss of hundreds of
federal jobs at the United States Military Academy at West Point, New
York. Congress and the President have expressed deep reservations with
the type of a study currently used to compare the use of private versus
public employees (referred to as an A-76 study). The Office of
Management and Budget (OMB) established this type of study to ensure
that the government does not waste taxpayers’ money by paying
government employees to perform tasks which could be completed at a
lower cost by private contractors. However, a series of congressional
investigations by the Government Accountability Office have highlighted
the significant flaws inherent in the current A-76 process suggesting
that it neither conclusively saves money nor produces a more efficient
output and puts federal employees at a disadvantage. Schumer and
Gillibrand’s request would also prevent the outsourcing of dozens of
utility worker jobs at West Point.
Today
Schumer and Gillibrand wrote to the Chairman and Ranking Member of the
Subcommittee and urged them to support in the final bill provisions
passed in the House, introduced by Rep. Maurice Hinchey, that would
cancel the outsourcing of hundreds of jobs at West Point.
“Putting
hundreds of jobs at risk by relying on a system that has been proven to
be ineffective makes no sense,” said Schumer. “Cutting these jobs will
create a great deal of hardship in an already difficult economic
climate. I urge the Conference Committee to include provisions in the
bill that will cancel the flawed study and preserve hundreds of jobs at
West Point.”
“During
these tough economic times, we need to maintain as many jobs as
possible in our communities,” said Senator Gillibrand. “The study at
West Point was obviously flawed and unfair. I will continue working
with Senator Schumer to keep our jobs here at West Point.”
The
study conducted at the United States Military Academy at West Point
contains several serious, undeniable flaws. First, with preliminary
planning contracts entered into in September of 2002, the process has
taken nearly 7 years for completion, drastically exceeding accepted
timelines for such studies and leaving the fate of West Point workers’
futures hanging in the balance for far too long. Second, the study
compares different price structures, making it impossible to evaluate
accurately which is the lower cost. For federal employees, the study
estimates the total cost to the Army of performing the work. However,
when soliciting bids from private contractors, the Army is asking for
“cost plus firm fixed fee” contract. These contracts allow for
variable costs, which cannot be accurately compared to the fixed cost
used for continuing with federal employees.
The
senators also noted that the study was flawed because the Army changed
the requirements for the union halfway through. Originally, the Army
allowed the union to combine the operations/maintenance and custodial
responsibilities into a single bid, which allowed them to achieve
economies of scale. Halfway through the process the Army required the
union to separate these two contracts, but did not allow them to begin
the process over.
Schumer and Gillibrand noted that with
such an inherently flawed process, the costs at West Point could indeed
increase, leaving the Army and the taxpayer on the hook.
Today
they wrote to Senate Appropriations Subcommittee on Defense Chairman
Daniel Inouye and Ranking Member Thad Cochran asking them to include
House provisions in the final bill that would save hundreds of jobs at
West Point.
In
the letter they wrote, “With millions of taxpayer dollars at stake,
these discrepancies significantly threaten the validity of the study
and unjustly jeopardize over 500 long-held, local jobs. The loss of
hundreds of local jobs at West Point, in this economic climate in
particular, should not be based on a critically-flawed process, which
in the past has yielded inconsistent results at best.”
A full copy of the letter is below:
October 19, 2009
Dear Chairman Inouye and Ranking Member Cochran:
As
your Subcommittee works toward a conference with the House of
Representatives for the Fiscal Year 2010 Defense Appropriations bill,
we respectfully request that you support the House’s efforts to prevent
the loss of hundreds of federal jobs at the United States Military
Academy at West Point, NY. Congress and the President have expressed
deep reservations with the OMB Circular A-76
study process. The Office of Management and Budget (OMB) established
this type of study to ensure that the government does not waste
taxpayers’ money by paying government employees to perform tasks which
could be completed at a lower cost by private contractors. However,
mounting evidence, including several studies conducted by the
Government Accountability Office, has found that the A-76 process
neither conclusively saves money nor produces a more efficient output.
Rather, the GAO reports have found significant flaws with the A-76
process that unfairly disadvantage federal employees.
The
study conducted at the United States Military Academy at West Point
contains several serious, undeniable flaws. First, with preliminary
planning contracts entered into in September of 2002, the process has
taken nearly 7 years for completion, drastically exceeding accepted
timelines for such studies and leaving the fate of West Point workers’
futures hanging in the balance for far too long. Second, the study
compares different price structures, making it impossible to evaluate
accurately which is the lower cost. For federal employees, the study
estimates the total cost to the Army of performing the work. However,
when soliciting bids from private contractors, the Army is asking for
“cost plus firm fixed fee” contract. These contracts allow for
variable costs, which cannot be accurately compared to the fixed cost
used for continuing with federal employees.
Furthermore,
the Army changed the requirements of the union halfway through the
study. Originally, the Army allowed the union to combine the
operations/maintenance and custodial responsibilities into a single
bid, which allowed them to achieve economies of scale. Halfway through
the process, Army required the federal employees to separate these two
contracts, but did not allow them to begin the process over. With
millions of taxpayer dollars at stake, these discrepancies
significantly threaten the validity of the study and unjustly
jeopardize over 500 long-held, local jobs. The loss of hundreds of
local jobs at West Point, in this economic climate in particular,
should not be based on a critically-flawed process, which in the past
has yielded inconsistent results at best.
We
therefore strongly urge members of the conference committee to support
House efforts to prevent the loss of hundreds of jobs at the United
States Military Academy at West Point, NY. We hope that you will
consider including these provisions as you begin to work towards a
conference agreement with the House on the Defense Appropriations bill.
If we can be of any assistance, please do not hesitate to contact us or
Anna Fodor, of Sen. Schumer’s staff, at 202.224.6542, or Kevin Fink, of
Sen. Gillibrand’s staff, at 202.224.4451. Thank you for your attention
to this important matter.