December 21, 2005
Jemarion Jones
(202) 639-6405

AFGE Thanks Conferees for Retaining Key Health Care Provision in Defense Appropriations Bill

Washington —The American Federation of Government Employees (AFGE) today commended
Congress for retaining a bipartisan law that prevents contractors from gaining unfair advantages in the cost comparison processes of privatization reviews. In response to the action, AFGE issued the following statement:

“Section 8014(a)(3) of the fiscal 2006 Defense Appropriations Bill excludes health care funding from cost comparison processes when contractors contribute less money toward their employees’ health care benefits than what Congress requires the Department of Defense (DoD) to contribute for its civilian employees.

“Pro-contractor floor amendments to strike this bipartisan law were considered earlier this year but never offered in both the House and Senate; however, despite strong opposition from contractors and the Office of Management and Budget (OMB), conferees retained the law.

“The opposition from contractors and OMB has been completely undercut by the facts. A recent Government Accountability Office report (06-72) refuted the contention that the law was onerous. Per the report, ‘According to DoD component contracting officers and our review of competitive sourcing documents, the administrative steps taken to collect health benefit data were not unduly burdensome and generally did not significantly delay competition schedules.’

“OMB and DoD officials have also insisted that the law would be devastating to small business contractors. Per a March 15 letter from the Small Business Administration (SBA), ‘(A)ccording to a DoD report provided to SBA, during the period of 1995 to 2004, of the 678 contracts awarded as a result of A-76 competitions, 460 or 68 percent, were awarded to small businesses.’ Privately, DoD has acknowledged that it can document only 12 awards to small business contractors through A-76 competitions from 2001 through 2005—and none in the period of 1995 through 2000.

“AFGE thanks the Congress for ignoring this disinformation campaign from OMB, DoD and the contractors. The law ensures that cost comparisons focus on who can do a better job—as opposed to who can better deprive workers of decent health care benefits. The law should be expanded to cover all agencies. Additionally, it’s an approach that should be followed with respect to pensions and other key benefits. AFGE thanks House Defense Appropriations Subcommittee Chairman Bill Young (R-Fla.), Senate Defense Appropriations Subcommittee Chairman Ted Stevens (R-Alaska), House Ranking Member John Murtha (D-Pa.), and Senate Ranking Member Daniel Inouye (D-Hawaii). AFGE gives special thanks to Rep. Martin Olav Sabo (D-Minn.) for making this provision law in the fiscal 2005 bill and defending this provision in the fiscal 2006 bill and to Sen. Edward Kennedy (D-Mass.) who, in offering a floor amendment to the fiscal 2004 bill, first proposed this innovative approach to calculating costs for privatization reviews.”

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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