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

AFGE Thanks Senate Veterans Affairs Committee for Stripping Privatization Language from Legislation

Washington — AFGE today thanked Senate Veterans Affairs Committee Ranking Member Daniel Akaka (D-Hawaii), Senate Democratic Leader Harry Reid (D-Nev.), and Sens. Patty Murray (D-Wash.) and Paul Sarbanes (D-Md.) for preventing the passage of legislation that would have diverted at least $300 million to pay for wasteful privatization studies of 36,000 jobs at the Veterans Health Administration (VHA).

This legislative proposal, contained in S. 1182, would have repealed a spending ban passed by Congress in 1982 that prohibits the use of patient care dollars for public-private cost comparison studies. An effort led by Sens. Akaka (D-Hawaii) and Murray (Wash.) to strip S. 1182 of the controversial Section 7 at its committee mark up earlier this year failed narrowly, 7 to 7. Veterans’ service organizations, concerned about the impact of contracting out on health care quality and access also voiced strong opposition to this legislation.

After the close mark up vote, Committee Chair Larry Craig (R-Idaho) and Sen. Akaka negotiated a balanced and fair compromise that retains the current spending ban and establishes a limited pilot project. During the two years of the pilot project, the Department of Veterans Affairs (VA) will study the Office of Management and Budget (OMB) Circular A-76 public-private job competition process (A-76) and the VA’s own Business Process Reengineering (BPR) approach to increasing efficiency. The VA claimed earlier this year that BPR could save as much money as officials at OMB claimed could be saved from using A-76.

The new language limits spending on the pilot project to no more than $15 million. Funding is divided evenly so that no more than $7.5 million may be spent studying work performed by VHA employees and no more than $7.5 million may be spent studying work performed by VHA contractors.

“AFGE has led the fight to ensure that federal employees in all agencies get chances to fairly compete with contractors for work performed in-house as well as contracted out work,” said AFGE National President John Gage. “Contractors acquire and retain almost all of their work without ever competing against federal employees and all too infrequently against other contractors. Taxpayers would benefit significantly if federal employees received opportunities to compete against contractors who have become accustomed to big sole-source contracts. Although OMB officials claim that their ‘competitive (sic) sourcing’ effort is about competition, not replacing federal employees, they have stubbornly shielded their contractor cronies from the same competitive pressures that they insist are appropriate for federal employees.”

Additionally, the new language ensures that contracting out will not be achieved at the expense of employees’ health benefits. The cost comparisons will not give contractors any advantage in the competitive bidding process if they fail to contribute to their employees’ health care benefits plan to the same extent that VA is required to contribute to the health care benefits plan of its employees.

For more information, please visit

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

SUBSCRIBE Latest news & info

AFGE Events

Event Calendar is for Members Only. Please Log In to see our calendar of events.