October 08, 2004
Enid Doggett
Kurt Gallagher
(202) 639-6419

AFGE Decries Back Room Deals To Kill Privatization Reforms

(WASHINGTON) The American Federation of Government Employees (AFGE) voiced its strong opposition to the stripping of almost all of the bipartisan reform provisions that had been included by the House and Senate in the FY05 Defense Authorization Bill. These bipartisan reform provisions were removed at the insistence of the White House which worked closely with House Armed Services Committee Chair Duncan Hunter (R-CA) and House Government Reform Committee Chair Tom Davis (R-VA).

"The Bush Administration's privatization initiative is all about replacing reliable and experienced federal employees with contractor cronies, not in making the federal government a better provider of services," declared John Gage, AFGE national president. "The Bush Administration can't defend its 'competitive (sic) sourcing' initiative on the floor of the House or Senate. However, through backroom bullying, White House officials can still pursue their vicious anti-federal employee vendetta. Federal employees and taxpayers owe a debt of gratitude to Representatives Jim Langevin (D-RI) and Jim Cooper (D-TN) and Senators Edward Kennedy (D-MA), Saxby Chambliss (R-GA), Susan Collins (R-ME), and Carl Levin (D-MI) for their efforts to reform the Pentagon's privatization campaign."

Provisions that were stripped from the conference report on the FY05 Defense Authorization Bill would have:

· allowed federal employees to submit their most competitive bids, pursuant to most efficient organization plans, before a final decision is made on whether or not to contract out their work, leaving federal employees at a severe disadvantage.

· allowed federal employees opportunities to compete for new work and contractor work. Numerous studies have found that federal contractors essentially establish monopolies, with all the characteristics of a monopoly including inefficiency and bloated costs, which taxpayers are forced to subsidize.

· excluded health care costs from the cost comparison process when contractors contribute less towards their employees' health insurance benefits than is required of the Department of Defense by Congress. The White House signed off on inclusion of this provision in the FY05 Defense Authorization Bill. Allowing contractors to claim savings by slashing health insurance benefits undermines the health and well-being of workers.

· provided federal employees with the same appeal rights as contractors. Despite the efforts of Senators Collins and Levin, federal employees are left with a second-rate appeals process such that:

· Contractors can initiate their own appeals. On the other hand, federal employees can act only through a senior manager who can refuse to file an appeal. A decision by a senior manager not to file an appeal is not subject to review. Senior managers are charged with carrying out the agenda of the sitting president. When it comes to President Bush Administration's privatization agenda, senior managers do not have the incentive, do not have the autonomy, and do not have the resources to adequately represent the interests of federal employees.

· Contractors can appeal to both the Government Accountability Office (GAO) and the Court of Federal Claims, whereas federal employees can appeal only to GAO and then only if their senior managers approve.

· Contractors can appeal matters involving streamlined competitions to the Court of Federal Claims, and arguably to GAO as well, whereas federal employees have no appeal rights whatsoever with respect to streamlined competitions. The General Services Administration announced recently that federal employees lost two-thirds of all streamlined competitions conducted by the agency under the May 2003 version of OMB Circular A-76.

· Contractors have appeal rights in all competitions underway as well as in all future competitions. The senior manager-driven appeal rights afforded to federal employees in the conference report apply only to new competitions undertaken 90 days after enactment, leaving tens of thousands of federal employees currently being reviewed for privatization with, literally, no appeal rights.

The American Federation of Government Employees is the largest federal employee union, representing 600,000 workers in the federal government and the government of the District of Columbia.

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