October 03, 2005
Jemarion Jones
(202) 639-6405

Congressional, AFGE Pressure Kills Wasteful and Political Privatization Review

(Washington)—In reaction to pressure from a bipartisan group of Missouri lawmakers and the American Federation of Government Employees (AFGE), the Department of Commerce (DoC) recently granted a request from the National Oceanic and Atmospheric Administration (NOAA) to end an A-76 cost-competition study for NOAA’s National Logistics Support Center (NLSC) in Kansas City, Mo. AFGE has led the opposition to the Office of Management and Budget's (OMB) wholesale privatization scheme because it wastes taxpayer dollars, deprives agencies of experienced and dedicated staff, and is unfair to federal employees.

The term A-76 refers to policy in the OMB Circular that details regulations for conducting cost-competition studies.

Members of AFGE Local 1910, the union that represents employees at NOAA and NLSC, played a crucial role in ending the A-76 cost-competition (privatization) effort by meticulously documenting numerous problems with the study. Consequently, Rep. Emanuel Cleaver (D-Mo.) led a bipartisan group of Missouri lawmakers in opposition to the A-76 effort that included Sens. Christopher Bond (R-Mo.), Jim Talent (R-Mo.) and Rep. Ike Skelton (D-Mo.). In the end, the congressional representatives, by working with House Science, State, Justice and Commerce Appropriations Subcommittee Chair Frank Wolf, were able to shut down the NOAA privatization review.

Saving money is often the reason given for cost-competition studies. However, NOAA had already realized cost savings through process reengineering and other methods at the time of the cost-competition request. Instead of saving money, the study has cost taxpayers $1 million or roughly more than $40,000 for each reviewed NLSC employee.

Cost-competition studies also are supposed to determine if a private contractor can do a particular job more effectively. The NOAA cost-competition study ignored the fact that NLSC has won numerous awards for customer service, including two from DoC, the very agency that insisted undertaking the cost-competition study.

The NLSC is responsible for storing and supplying critical equipment to field locations around the world, often on an emergency basis. In the aftermath of Hurricane Katrina, the NLSC sent a forklift and other supplies to help move the badly damaged New Orleans-based National Finance Center, the facility that primarily deals with payroll and personnel matters for hundreds of thousands of federal employees. The NLSC also sent vital parts and equipment to sites in Texas before the more recent onslaught of Hurricane Rita. NOAA and NLSC fall under the direction of DoC.

“The lesson to be learned from this is that the A-76 process is so costly and controversial that agencies should always strive to generate efficiencies internally so that managers and employees can work side-by-side to develop even better ways of delivering critical services to the American people,” says AFGE National President John Gage.

Gage went on to say, “Two-thirds of the money spent on this A-76 study went to a consultant. In light of recent events, OMB needs to put its own procurement house in order instead of scheming to put loyal federal employees out of work through its discredited ‘competitive sourcing’ plan, which is a grievous disservice to taxpayers, federal employees and all Americans who depend on the federal government for important services.”

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