AFGE Local 1411
Competitive Sourcing Has Disproportionate Adverse Effect on African-American, Female, and Older Workers
WASHINGTON – The American Federation of Government Employees (AFGE)
thanks Senator Tom Harkin (D-IA) and Representative David Obey
(D-WI), the chairs of the Senate and House Labor-HHS-Education
Appropriations Subcommittees, for halting privatization reviews in
the Department of Labor (DoL) until two months after receipt of a
report from the Government Accountability Office (GAO). The GAO
report analyzes the department’s effort to implement the Bush
Administration’s “competitive sourcing” policy. Senator Barbara
Mikulski (D-MD) led the fight to suspend the use of the OMB Circular
A-76 privatization process in DoL. GAO submitted its report today.
“The report’s findings are consistent with concerns raised by AFGE,”
declared AFGE National President John Gage. “The A-76 process
consistently overstates savings and underestimates costs. DoL cannot
be singled out as an isolated offender. Indeed, DoL officials only
carried out OMB’s direction. In fact, all agencies’ ‘competitive
sourcing’ programs suffer from the same fatal flaws. Moreover, this
is not the first time these serious problems have been identified.
GAO reported earlier this year that the Forest Service’s costs for
carrying out privatization studies far exceeded the savings.
(GAO-08-195) Why won’t OMB change its flawed methodology? Because
pro-privatization officials would have to acknowledge that the A-76
process is, ultimately, a burden on taxpayers. Encouraging agencies
to reengineer internally, as OMB has belatedly attempted to do in
changing the name of its ‘competitive sourcing’ effort to
‘commercial management’, would lead to real savings but without
generating the same costs as the A-76 program.”
“The report did not look at several issues we considered worthy of
review, including work inappropriate for contractor performance
being studied for privatization, work being contracted out without
competition, the failure to consider insourcing and internal
reengineering alternatives to the costly and controversial A-76
process, and management’s use of numerical privatization quotas to
direct the ‘competitive sourcing’ effort. However, GAO is to be
commended,” continued Gage, “for painstakingly reconstructing the
records necessary to determine the impact of ‘competitive sourcing’
on the DoL civil service workforce. The disproportionate impact of
A-76 on female employees, older employees, and African-American
employees is absolutely unconscionable.”
“The A-76 process has wasted taxpayer dollars, diverted dedicated
federal employees from their important work, and contributed towards
a resegregation of the civil service,” concluded Gage. “That’s why
AFGE will continue to lead the fight to shut it down.”
According to GAO, in Department of Labor: Better Cost Assessments
and Departmentwide Performance Tracking Are Needed to Effectively
Manage Competitive Sourcing Program (GAO-09-14): “Without a better
system to assess performance and comprehensively track all the costs
associated with competitive sourcing, DoL cannot reliably assess
whether competitive sourcing truly provides the best deal for the
taxpayer…DoL’s savings reports…exclude many of the costs associated
with competitive sourcing and are unreliable…DoL excluded a number
of substantial items, including the time in-house staff spent on
competition activities, precompetition planning, certain transition
costs, and postcompetition review activities…”
“(O)ur analysis shows that these costs can be substantial and that
excluding them overstates savings…DoL competition savings reports
are unreliable and do not provide an accurate measure of competitive
sourcing savings. All three of the competitions that we randomly
selected and analyzed had inaccuracies…Among those 314 workers who
experienced a personnel action of some type, 47 percent were
African-American (including all those who were either demoted or
laid off), 60 percent were women, and 89 percent were 40 years or
older—significantly higher proportions than their representation in
the general DoL workforce.”