December 18, 2007
Communications Department
(202) 639-6419
John Threlkeld
(202) 639- 6466

Congress Makes Historic Reforms in Privatization Process

(WASHINGTON)— The American Federation of Government Employees (AFGE), thanks conferees for the monumental reforms to the contracting-out process, contained in the 2008 Omnibus Appropriations Bill.

In Financial Services, Section 739, the legislation would exclude health care and retirement costs from the contracting out cost comparison process for all-non Department of Defense (DoD) agencies, eliminating the unfair advantage contractors receive for contributing less than what is required of federal agencies, to their employee benefits.

Section 739 would give all federal employees the right to appeal agency contracting out decisions to the Government Accountability Office for an independent or third-party review, and would prohibit the Office of Management and Budget (OMB) from requiring agencies to conduct OMB Circular A-76 privatization studies.

Section 748, would require the establishment of contractor inventories in at least three cabinet-level agencies that would track the cost and size (in contractor manpower equivalents), in an effort to identifying contracts that have been poorly performed, were undertaken without competition, or involve inherently governmental functions.

These provisions are made permanent through their application to FY2008 and each succeeding fiscal year.

Section 747, would halt the Human Resources Lines of Business Report until 60 days after a report is submitted by the OMB to the House and Senate Appropriations Committees to determine if the controversial initiative is consistent with principles of fair public-private competition.

In Labor-HHS-Education, Section 111, the bill would prohibit the use of the A-76 process in the Department of Labor (DoL) until 90 days after receipt of a report from General Accounting Office on how DoL has used the A-76 process, particularly whether some of the DoL employees reviewed for privatization perform work which is inappropriate for contractor performance.

In Energy and Water, Section 104, the bill would prohibit any implementation of the A-76 or the High Performing Organization processes in the Corps of Engineers.

In Military Construction-Veterans Affairs, Section 228, the bill would require that the Department of Veterans Affairs conduct a public-private competition before conversion to contractor performance of any function performed by more than ten employees that are not paid for through dollars directed towards patient care.

Interior, Section 415, the measure would prohibit the use of the A-76 process in the Forest Service.

In Commerce-Science-Justice, Section 214, the bill would prohibit the use of the A-76 process for work performed by Bureau of Prison employees or of Federal Prison Industries.

In Commerce-Science-Justice, Section 527, the bill would prevent any agencies funded under the Commerce-Science-Justice Appropriations Bill from undertaking any A-76 activity without ensuring that the employees who are targeted for privatization have a right to appeal any contracting out decision to the Government Accountability Office.

Also in Homeland Security, Section 549, the bill would prohibit the Coast Guard from using the OMB Circular A-76 privatization process on any part of the critical work performed at the National Vessel Documentation Center.

AFGE sincerely thanks all parties that helped to authorize theses landmark reforms, including: House and Senate Financial Appropriations Subcommittee Chairs Jose Serrano and Richard Durbin; House and Senate Subcommittee Chairs David Obey, Tom Harkin, Peter Visclosky, Byron Dorgan, Chet Edwards, Tim Johnson, Norm Dicks, Dianne Feinstein, Barbara Mikulski and Alan Mollohan. Senator Mikulski and Representatives Chris Van Hollen and Steny Hoyer worked extraordinarily hard for federal employees on the issue of privatization throughout the appropriations process.

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