June 16, 2009

Schumer, Gillibrand Call on Senate Armed Services Committee to Halt Implementation of Deeply Flawed Study That Could Lead to Loss of Over 500 West Point Jobs

Schumer, Gillibrand Ask Senate Committee To Insert Language In Upcoming Bill To End A-76 Study At West Point Once And For All

In an effort to save 550 jobs at West Point, U.S. Senators Charles E. Schumer and Kirsten E. Gillibrand today wrote to the Senate Armed Services Committee requesting that they include language in the 2010 defense bill preventing the implementation of the OMB Circular A-76 Study currently in progress at the United States Military Academy at West Point.  Schumer and Gillibrand noted that the A-76 study used to compare the use of private versus public employees yields overwhelmingly unreliable results and therefore has put jobs and families at risk while accruing no proven benefits to the taxpayer.  Earlier this year, after a series of congressional investigations by the Government Accountability Office (GAO) highlighted the significant flaws inherent in the current A-76 process, Congress took action and inserted language in fiscal year 2009 omnibus appropriation bill that prevented any new A-76 studies from beginning for the next year. However, since the West Point study was already underway, the results of the study are still subject to implementation. Schumer and Gillibrand have previously written to Secretary of Defense Gates and Secretary of the Army Peter Geren to oppose completion and implementation of the flawed West Point study.

In an effort to save the jobs at West Point, Senators Schumer and Gillibrand wrote to Armed Services Committee Chairman Carl Levin and Ranking Member John McCain urging them to insert language into the upcoming fiscal year 2010 defense authorization bill preventing the study's implementation.

"Putting more than 500 jobs at risk by relying on flawed data makes no sense," said Schumer. "Cutting these jobs will create a great deal of hardship in an already difficult time. I urge the Committee to take a hard look at this inherently flawed study and do the right thing by not implementing any of its recommendations."

"During these tough economic times, we need to maintain as many jobs as possible in our communities," said Senator Gillibrand. "The study at West Point was obviously flawed and unfair. I will continue working with Senator Schumer to keep our jobs here at West Point."

The Office of Management and Budget (OMB) established the A-76 study in an effort to compare the costs of work done by government employees to that of private contractors. However, GAO reports have highlighted the significant flaws inherent in the current A-76 process. For one, the study is measuring two employment structures that cannot be accurately compared. The study estimates the total cost to the Army of continuing to use federal employees, but, when soliciting bids from private contractors, the Army is asking for a "cost plus firm fixed fee" contract. These contracts do not require the contractors to estimate their costs, and mean that the Army will have to pay whatever the contractor bills. If this contract is privatized, it could easily cost the Army more money than would the use of the current unionized workforce. That risk alone is sufficient proof that the study is flawed, according to the senators.

Schumer and Gillibrand also noted that the study is flawed because the Army changed the requirements for the union halfway through. Originally, the Army allowed the union to combine the operations/maintenance and custodial responsibilities into a single bid, which allowed them to achieve economies of scale. Halfway through the process the Army required the union to separate these two contracts, but did not allow them to begin the process over.

Schumer and Gillibrand said that with millions of taxpayer dollars and hundreds of local jobs at stake, these discrepancies significantly threaten the validity of the study and therefore should not be implemented. In April, Schumer and Gillibrand cosponsored the CLEAN-UP Act to closely examine the effectiveness of A-76 studies and overhaul the process. They plan to continue to work to prevent implementation of the current West Point study through the fiscal year 2010 defense authorization and Appropriations process.

In their letter they wrote, "With its accuracy in question and approximately 550 jobs hanging in the balance, we ask that the Committee consider including language in the FY10 Defense Authorization Bill to prevent implementation of the A-76 study conducted at West Point."


A full copy of the letter is below


June 16, 2009

The Honorable Carl Levin
Chairman, Senate Armed Services Committee
228 Russell Senate Office Building
Washington, DC  20510


The Honorable John McCain
Ranking Member, Senate Armed Services Committee
228 Russell Senate Office Building

Washington, DC  20510


Dear Chairman Levin and Ranking Member McCain:


We write today to respectfully request that as the Committee continues its work on the FY10 Defense Authorization Bill, it consider addressing the flaws of the OMB Circular A-76 Study currently in progress at the United States Military Academy at West Point.  The study was intended to review the operations and maintenance, custodial and public works duties at West Point. While both Congress and the President have expressed deep reservations with the A-76 process, serious concerns have been raised as to the accuracy of this particular study. With its accuracy in question and approximately 550 jobs hanging in the balance, we ask that the Committee consider including language in the FY10 Defense Authorization Bill to prevent implementation of the A-76 study conducted at West Point.

The Office of Management and Budget (OMB) established the A-76 study to ensure that the government does not waste taxpayers' money by paying government employees to perform tasks which could be completed at a lower cost by private contractors. While we support the goal of saving taxpayer dollars, we are concerned by mounting evidence that the process unfairly disadvantages federal employees and fails to save any money. The study at West Point contains several serious flaws.  First, the process compares different price structures, making it impossible to evaluate accurately which is the lower cost.  For federal employees, the study estimates the total cost to the Army of performing the work.  However, when soliciting bids from private contractors, the Army is asking for "cost plus firm fixed fee" contract.  These contracts allow for variable costs, which cannot be accurately compared to the fixed cost used for continuing with federal employees.

Second, the Army changed the requirements of the union halfway through the study.  Originally, the Army allowed the union to combine the operations/maintenance and custodial responsibilities into a single bid, which allowed them to achieve economies of scale.  Halfway through the process, Army required the union to separate these two contracts, but did not allow them to begin the process over. With millions of taxpayer dollars at stake, these discrepancies significantly threaten the validity of the study and unjustly jeopardize hundreds of long-held, local jobs.

We therefore request that the Committee address the procedural flaws of the West Point A-76 study in the upcoming FY10 Defense Authorization Bill or Committee Report to prevent implementation of the study. If you have any questions, please do not hesitate to contact John Jones, of Sen. Schumer's staff, at 202.224.6542 or Kevin Fink, of Sen. Gillibrand's staff, at 202.224.4451. Thank you for your consideration of this important matter.


Sincerely,


Charles E. Schumer
U.S. Senator

Kirsten E. Gillibrand
U.S. Senator