Press Release

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

Jun 16, 2009

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