March 18, 2011
Tim Kauffman
[email protected]

Army Reverses Course on Illegal Privatization Effort

 WASHINGTON - The American Federation of Government Employees appreciates the Army's decision to halt the illegal conversion of civilian work to private contractors but remains concerned about other potential outsourcing efforts, AFGE National President John Gage said today.

On Feb. 25, the Army's Southern Regional Medical Command issued a memorandum announcing it would be outsourcing all outpatient and inpatient third party billing and collections functions at all military treatment facilities in the region. This action was in direct violation of Title 10 of the U.S. Code, which forbids the Department of Defense from converting any function performed by civilian employees to contractors without first conducting a formal cost comparison.

After being informed of this action by leaders from AFGE Local 1920 in Fort Hood, Texas, Gage sent a letter to Army Secretary John McHugh asking for an immediate halt to this illegal privatization effort.

"The rank-and-file work force would be delighted to work with management to generate efficiencies, but this privatization of these services is flatly illegal," Gage wrote in the March 3 letter.

The next day, the Army's Southern Regional Medical Command rescinded the Feb. 25 memo.

Gage thanked the Office of the Secretary of Defense, especially Under Secretary for Personnel and Readiness Clifford Stanley, and the House Armed Services Committee, specifically House Readiness Subcommittee Chairman Randy Forbes, R-VA, and Ranking Member Madeleine Bordallo, D-Guam, for their help in putting a stop to the privatization effort.

Even though the outsourcing action has been halted for now, AFGE remains concerned that the Command intends to phase out the use of civilian employees for the billing and collection functions by not replacing employees as they retire.

"We are more than happy to work with Army leaders to make these functions more efficient, but we will not allow the Army to illegally transfer this work to contractors without any regard to the federal workers currently performing these jobs," Gage said.

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