May 20, 2005
Jemarion Jones
(202) 639-6405

Department Of Veterans Affairs Violates Federal Law by Handing Over Federal Jobs to Contractors, Says AFGE

Washington —The American Federation of Government Employees (AFGE) has notified the Department of Veterans Affairs (VA) that the agency needs to immediately stop its effort to contract out the laundry services at the Pittsburgh (PA) Veterans Affairs Medical Center. Directly converting federal jobs to contractor jobs is a violation of both federal law and federal policy.

In a letter to VA Secretary James Nicholson, AFGE, a national labor union that represents 600,000 federal employees (including more than 150,000 VA employees) notified the VA that the agency should immediately cease and desist its outsourcing of laundry services. According to federal policy written by the Office of Management and Budget (OMB) in OMB Circular A-76, agencies are not allowed to hand over federal jobs to contractors without performing a formal cost comparison study under the rules of the Circular. Additionally, in the case of the Veterans Health Administration (VHA) division of the VA, a federal law (38 U.S.C. 8110(a) (5)) prohibits the agency from using any resources to perform cost comparison studies without specific appropriations from Congress. Thus, not only did the VA fail to perform a formal cost comparison study under the rules of OMB Circular A-76, but the cost comparison they did perform was in violation of federal law.

The Pittsburgh VA made the decision to contract out the laundry services based upon results from an illegal and informal cost comparison study. “To our knowledge, no funds were specifically set side to perform this study which resulted in the plan to contract out the laundry services at the Pittsburgh VA,” says AFGE National President John Gage. “What the VA is doing both violates the law and threatens the jobs of VA employees.”

The current violation is not a first for the VA. The agency was put on notice in April 2003 by the VA’s own general counsel, who reiterated the fact that the VA may not use VHA resources to conduct cost comparison studies of its operations.

“The VA says this privatization will cost less money in the short run,” says Colleen Evans, president of AFGE Local 3344 in Pittsburgh. “However, it will cost more money in the long run and is totally contrary to the recommendations of the CARES commission.”
The Capital Asset Realignment for Enhanced Services (CARES), an independent body chartered to advise the secretary, recently recommended that the Pittsburgh VA save money in the long run by building a new laundry and keeping the services in-house.
“The Pittsburgh VA wants to violate federal law and policy and take away the jobs of loyal workers instead of using sound business practices by investing in capital improvements that would save the VA money in the long run,” says Evans. “Of the 44 employees who will be affected, 25 are over the age of 50, 37 are veterans, 17 are minorities, and 11 are disabled workers. It is wrong for the VA to cast out these employees based upon bad business decisions at a time when the VA is touting its employment services to veterans.”

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