October 19, 2009

Schumer, Gillibrand Fight For Provisions That Will Prevent Outsourcing At West Point, Save Hundreds Of Jobs And Taxpayer Money

Schumer, Gillibrand: During Current Economic Climate, Saving These Jobs is Critical

As a Congressional committee works to combine the House and Senate versions of the Fiscal Year 2010 Defense Appropriations bill, U.S. Senators Charles E. Schumer and Kirsten Gillibrand today urged the committee to include a provision to prevent the loss of hundreds of federal jobs at the United States Military Academy at West Point, New York. Congress and the President have expressed deep reservations with the type of a study currently used to compare the use of private versus public employees (referred to as an A-76 study). The Office of Management and Budget (OMB) established this type of 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.  However, a series of congressional investigations by the Government Accountability Office have highlighted the significant flaws inherent in the current A-76 process suggesting that it neither conclusively saves money nor produces a more efficient output and puts federal employees at a disadvantage.  Schumer and Gillibrand's request would also prevent the outsourcing of dozens of utility worker jobs at West Point.

Today Schumer and Gillibrand wrote to the Chairman and Ranking Member of the Subcommittee and urged them to support in the final bill provisions passed in the House, introduced by Rep. Maurice Hinchey, that would cancel the outsourcing of hundreds of jobs at West Point.

"Putting hundreds of jobs at risk by relying on a system that has been proven to be ineffective makes no sense," said Schumer. "Cutting these jobs will create a great deal of hardship in an already difficult economic climate. I urge the Conference Committee to include provisions in the bill that will cancel the flawed study and preserve hundreds of jobs at West Point."

"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 study conducted at the United States Military Academy at West Point contains several serious, undeniable flaws.  First, with preliminary planning contracts entered into in September of 2002, the process has taken nearly 7 years for completion, drastically exceeding accepted timelines for such studies and leaving the fate of West Point workers' futures hanging in the balance for far too long.  Second, the study 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.

The senators also noted that the study was 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 noted that with such an inherently flawed process, the costs at West Point could indeed increase, leaving the Army and the taxpayer on the hook.

Today they wrote to Senate Appropriations Subcommittee on Defense Chairman Daniel Inouye and Ranking Member Thad Cochran asking them to include House provisions in the final bill that would save hundreds of jobs at West Point.

In the letter they wrote, "With millions of taxpayer dollars at stake, these discrepancies significantly threaten the validity of the study and unjustly jeopardize over 500 long-held, local jobs. The loss of hundreds of local jobs at West Point, in this economic climate in particular, should not be based on a critically-flawed process, which in the past has yielded inconsistent results at best."

A full copy of the letter is below:

October 19, 2009

Dear Chairman Inouye and Ranking Member Cochran:

As your Subcommittee works toward a conference with the House of Representatives for the Fiscal Year 2010 Defense Appropriations bill, we respectfully request that you support the House's efforts to prevent the loss of hundreds of federal jobs at the United States Military Academy at West Point, NY. Congress and the President have expressed deep reservations with the OMB Circular A-76 study process. The Office of Management and Budget (OMB) established this type of 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.  However, mounting evidence, including several studies conducted by the Government Accountability Office, has found that the A-76 process neither conclusively saves money nor produces a more efficient output. Rather, the GAO reports have found significant flaws with the A-76 process that unfairly disadvantage federal employees.

The study conducted at the United States Military Academy at West Point contains several serious, undeniable flaws.  First, with preliminary planning contracts entered into in September of 2002, the process has taken nearly 7 years for completion, drastically exceeding accepted timelines for such studies and leaving the fate of West Point workers' futures hanging in the balance for far too long.  Second, the study 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.

Furthermore, 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 federal employees 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 over 500 long-held, local jobs. The loss of hundreds of local jobs at West Point, in this economic climate in particular, should not be based on a critically-flawed process, which in the past has yielded inconsistent results at best.

We therefore strongly urge members of the conference committee to support House efforts to prevent the loss of hundreds of jobs at the United States Military Academy at West Point, NY. We hope that you will consider including these provisions as you begin to work towards a conference agreement with the House on the Defense Appropriations bill. If we can be of any assistance, please do not hesitate to contact us or Anna Fodor, 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 attention to this important matter.