GAO Report Says Labor Department Misled Congress on Cost of Outsourcing Jobs

Sen. Tom Harkin, left, and Rep. David Obey criticized the administration.
Sen. Tom Harkin, left, and Rep. David Obey criticized the administration. (Charlie Neibergall - AP)
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By Carol D. Leonnig
Washington Post Staff Writer
Tuesday, November 25, 2008

The Labor Department gave Congress inaccurate and unreliable numbers that understated the expense of contracting out its employees' work to private firms, according to a Government Accountability Office report released yesterday.

The department's decisions in allowing contractors to compete for bureaucrats' work -- known as "competitive sourcing" -- also demoralized workers, according to most of the 60 agency employees interviewed by the GAO.

"DOL's savings reports are not reliable: a sample of three reports contained inaccuracies, and others used projections when actual numbers were available, which sometimes resulted in overstated savings," the GAO report said. "Because of these and other weaknesses, DOL is hindered in its ability to determine if services are being provided more efficiently as a result of competitive sourcing."

Labor Secretary Elaine L. Chao began having some agency workers compete for their jobs in 2004, but since then few employees have actually lost their jobs and had their pay cut as a result of the privatizing effort, GAO found. Of the 314 federal workers who had a job change as a result of competitions with private firms, 263, or 84 percent, were either reassigned to positions with the same title and pay or were promoted. Of the 16 workers who were demoted, 14 kept their same professional grade or pay.

Twenty-two employees were demoted or laid off, and all were African American. An additional 29 employees left voluntarily.

Sen. Tom Harkin (D-Iowa) and Rep. David Obey (D-Wis.), chairmen of their chambers' appropriations subcommittees with jurisdiction over the Labor Department, asked for the report and urged Congress not to fund the competition program until the GAO provided the answers. They issued a statement yesterday saying the review documented "the negative impact the Bush Administration's failed policies have had" on the agency.

"Under the direction of this White House, the Department of Labor has increasingly attempted to move work performed by Federal employees to private contractors" and, in so doing, hurt workers' morale and "grossly overstated savings," they wrote. "We look forward to working with the Obama Administration to strengthen the Department of Labor as it undertakes the critical missions of making sure our workplaces are safe; protecting employee pensions, health benefits and rights; and providing workers with the skills they need to compete successfully in the 21st century economy."

Patrick Pizzella, an assistant secretary who oversees competitive sourcing, told the GAO in a letter last month that the department agrees tracking costs and performance more systematically would give the agency a more accurate picture of the usefulness of competitive sourcing. "As the GAO report indicates, DOL has made progress developing a system to assess the performance of winning service providers in our competitive sourcing program, and DOL's competitions rarely resulted in lost jobs or salary reductions for DOL employees," he said yesterday.

Pizzella said the Office of Management and Budget does not require that fuller counting; the GAO urged the OMB to require agencies to do so.


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