VA Outsourcing Stirs Continuing Controversy

The Department of Veterans Affairs just can't seem to catch a break when it comes to implementing "competitive sourcing," President Bush's drive to open more government work to private contractors.

The House last month refused an administration request to allow the VA to spend as much as $75 million this year and next to conduct cost comparison studies on whether to keep 28,000 VA jobs in-house or move some to private contractors.

The federal government's second-largest department, with 220,000 employees, suspended such studies in May within the Veterans Health Administration, which operates the VA's medical care and social support system. The department's general counsel ruled that federal law prohibits the VA from spending money on such studies unless Congress explicitly gives it money for that purpose. Congress hasn't, so the VA can't.

But the American Federation of Government Employees, the largest federal employee union, says the VA is going forward anyway.

In a letter to Secretary Anthony J. Principi last Thursday, Bobby L. Harnage Sr., the union's president, demanded that the VA "cease and desist" studies of whether to contract out laundry services at several facilities in Maryland and Virginia. The union "represents affected federal employees whose jobs may be placed at risk by use of these studies, which appear to have been paid for with funds in violation of the law," Harnage wrote.

A spokesman for the VA declined to comment Friday, saying Principi will make a statement Tuesday.

The driving principle behind Bush's competitive sourcing initiative is the president's belief that allowing private contractors to bid for more government work spurs efficiency and lowers costs whether or not the jobs stay in-house.

But even some of Bush's allies on Capitol Hill have expressed concern that the millions of dollars federal agencies are spending to conduct job studies is pulling funding away from other agency priorities.

At the U.S. Forest Service, for example, officials have said they will spend more than $10 million this year to conduct competitions involving 3,990 jobs and plan future competitions.

An environmental advocacy group, however, contends that the agency is spending as much as $100 million. Public Employees for Environmental Responsibility said Forest Service records indicate spending of $10 million in California alone, and that costs nationally will be $70 million to $100 million.

The initiative "is costing taxpayers millions of dollars that should be devoted to protecting our national forests," said Jeff Ruch, PEER's executive director.

Tom Mills, the Forest Service's deputy chief for business operations, acknowledged that costs will exceed $10 million.

"We're in the process of analyzing it and validating it," Mills said Friday. "Although the number is higher than $10 million, I can tell you it's a long ways from $100 million."

Unsettled by such figures, the House recently approved an appropriations bill that, starting in fiscal 2004, would block funding for job competitions at the Forest Service and the Interior Department. The Senate has included less restrictive language, and the administration's Republican allies have said they hope to work out an agreement in conference to allow competitions to go forward.

"We understand that costs are important," Mills said, "and we're using our experience in '03 to determine how to structure our studies in '04 and to improve the cost effectiveness of our agency's program."

In other recent developments:

• A House-Senate conference loosened language in the Federal Aviation Administration reauthorization bill that would have prevented the FAA from outsourcing the work of air traffic controllers. The compromise would allow the outsourcing beginning in fiscal 2008. And it would allow the FAA to immediately pursue job competitions for 2,700 flight service specialists, who brief pilots on weather conditions and help with search and rescue efforts.

John Carr, president of the National Air Traffic Controllers Association, opposed the move, saying conferees had sacrificed safety.

• Four business and advocacy groups, led by the National Taxpayers Union, recently kicked off an effort to persuade members of Congress to support Bush's plan. In an open letter to lawmakers, the groups said the initiative will save money and help agencies be more effective. The other groups are Americans for Tax Reform, the Reason Foundation and MAU Inc., a business that provides temporary and contract workers.