By Phil Williams
Chief Investigative Reporter
NASHVILLE, Tenn. - The U.S. Transportation Security Administration stands on the front lines of defending America's airports.
And the agency has said that it's very strict about making sure that its inspectors don't let their uniforms fall into the wrong hands.
But a NewsChannel 5 investigation discovered the agency isn't so careful about who's making those uniforms -- and critics say that's costing jobs in the United States.
Among them: jobs at a garment factory in tiny Celina, Tennessee.
"We're making a jacket for the Air Force," said Joel Ray Coe, as he showed NewsChannel 5 Investigates around the Racoe Inc. facility in Clay County.
Coe runs the factory that once employed 300.
Now, he's got just 12 workers left.
"It's sad when you tell about a hundred people that they no longer have jobs -- you can see it hurting their families," Coe said, painfully.
"And it hurts you?" NewsChannel 5 Investigates asked.
So when Coe recently learned that the TSA had just awarded a $98 million contract to a Nashville-based company to produce its uniforms, he called there, hoping to get some of that work for his people.
"I talked to the guy there and he told me that he's done placed the work. I said, 'You have? Who have you placed it with? I might have a chance to get some work from them, subcontract it from them.' He said, 'I've placed it in Mexico.'"
That's your tax money, paying for Homeland Security uniforms to be produced by workers in another country.
"It just about brought me to tears, Phil," Coe said, "because I know I could employ about 300 people in this area."
It turns out, that company got the original TSA contract back in 2003.
VF Imagewear is part of VF Corporation, which says it works with factories "primarily located in Asia with substantially all of the remainder ... in Mexico Central America Poland and the Middle East."
"There's a huge security issue here that just seems to be going right over everybody's head," said Mike Frisbey, president of Government Suppliers & Associates of Knoxville, Tenn.
Frisbey wanted that contract when it was put up for bids last year -- and he planned to use domestic factories like the one in Celina.
So, he checked out TSA's uniforms for himself.
"We found a number of garments that had 'Made in China' labels in them or 'Made in Vietnam' labels in them," Frisbey said.
UPDATE: On Tuesday, after the story aired, a VFC spokesperson provided this additional statement:
"During our eight years of providing TSA uniforms, VF Imagewear has never procured or manufactured any TSA emblems in China or any other Asian country.
All TSA emblems have been manufactured in either Mexico or the USA.
"For several months in 2009, TSA used a jacket manufactured in Bangladesh on an interim basis. The TSA emblems were not attached to the jackets
until they were received at the VF distribution center in Henning, TN. Under the previous contract, Bangladesh was an approved country. Under the new contract, this same jacket will be manufactured in the United States. No other TSA uniform produced by VF Imagewear has ever been procured or manufactured in China, Vietnam or any other Asian country."
By law, all U.S. military uniforms must be made in the United States.
Then, last year, a North Carolina congressman inserted an amendment -- the "Kissell Amendment" -- into the stimulus bill, mandating that all Homeland Security uniforms also must be made in the U.S.
The problem was that American trade reps never notified Canada, Mexico or Chile that the U.S. was exempting TSA items from its trade agreements with those countries. A spokesperson for the Office of the U.S. Trade Representative called that "an oversight."
So the Department of Homeland Security told vendors last summer -- just before new bids were submitted -- that it would allow TSA uniforms to be produced in those countries.
"It absolutely blows my mind," Frisbey said. "It absolutely blows my mind. I do not understand the logic."
To his dismay, the TSA decision let VF bid on the new contract, which it won even though it wasn't the lowest bidder.
"Is it going to take somebody in a TSA uniform that they stole to blow up an airplane on the tarmac at LAX before somebody wakes up and goes, 'Duh, I think we ought to make those in the United States where we can protect them?'" Frisbey asked.
As for the Celina factory, Joel Ray Coe said that he's "got orders going all the way out to July.... After that, I don't know."
While he worries about the nation's security, Coe worries even more about his employees' economic security.
"Our congressmen ought to be ashamed that this contract is going overseas," he said. "Our senators ought to be ashamed that it's going overseas. I'm ashamed, and I'm a United States citizen that them jobs are going overseas. It's not right."
A spokesperson for VF Corporation said late Monday that the company submitted two bids for the latest contract -- one that called for all of the work to be done in the U.S., the second that called for the sewing to be done in Mexico.
TSA accepted the second bid, the spokesperson said.
Here's the full text of the statement:
VF Imagewear, a division of VF Corporation, has served as the uniform provider for the Transportation Security Administration (TSA) for the past eight years. VF Imagewear employs nearly 700 associates in the Nashville area and approximately 175 associates in Henning, Tenn.
VF Imagewear submitted two bids for the TSA apparel contract. The first bid was for 100 percent of the apparel to be produced in the United States. Since the Kissell Amendment is subject to all previous trade agreements, including NAFTA, VF Imagewear submitted a second bid. VF Imagewear was awarded the contract with this bid. Under the contract, 86 percent of the work related to the contract will be conducted in the United States, including fabric production, apparel production, distribution, customer service and program management. The remainder of the work, which will take place in Mexico, represents labor to sew pants and shirts. Fifty percent of the items produced under the contract with the TSA will be made in the United States.
As for TSA, the agency said that it was just following the law. The agency said in a statement:
"TSA's procurement of officer uniforms is in full compliance with the Kissell amendment as enacted by law and all applicable trade agreements."
As for the failure to notify Canada, Mexico and Chile, a spokesperson for the Office of the U.S. Trade Representative said the "oversight" was discovered last May.
Now, almost a year later, she said in two separate statements:
"When DHS was created, units from various agencies that were already covered under our trade agreements were transferred to DHS. Under the agreements, the United States is obliged to notify changes in administrative structure. That is why the United States notified the changes with the creation of DHS. Due to oversight, TSA was not excluded from NAFTA and the US-Chile FTA."
"We are still examining this issue and have not made a determination on the appropriate action. We continue to take into consideration the views of domestic stakeholders and congressional interests on this issue."