May 12, 2004


House panel backs union-supported changes in competitive sourcing

By Amelia Gruber

A House panel on Wednesday passed a union-backed legislative proposal that requires sweeping changes to the Defense Department's competitive sourcing program.

The language, offered by Rep. James Langevin, D-R.I., and Jim Cooper, D-Tenn., as an amendment to the fiscal 2005 Defense authorization bill (H.R. 4200), paves the way for a broadening of federal employees' rights to protest outsourcing decisions at the General Accounting Office or Court of Federal Claims, and punishes contractors undercutting Pentagon employees' bids on work by offering less generous health care benefits.

Members of the House Armed Services Committee approved the amendment by a voice vote, shooting down a more moderate substitute measure by a vote of 30 to 28. The full House will now consider the Langevin-Cooper language.

The provision also requires the Defense Department to set up a pilot program allowing Pentagon employees to compete against contractors for new projects and work now performed by private companies. In addition, the measure asks the Defense inspector general to investigate whether the Pentagon is adequately staffed to conduct equitable competitions and to oversee contracts awarded.

Finally, the measure extends competitive sourcing provisions enacted as part of the fiscal 2004 Defense appropriations bill. Those provisions force the Pentagon to let in-house employees form teams to defend themselves any time more than 10 jobs are at stake in a public-private contest. The 2004 appropriations language also afforded the in-house teams a 10 percent or $10 million cost advantage in competitions.

Under the Langevin-Cooper language, Defense employees would retain the right to organize into teams called "most efficient organizations" and would also continue to hold the cost advantage. Furthermore, the language prohibits the Pentagon from offering any advantage to contractors cutting the cost of their proposal by offering less generous health benefits than the Defense Department.

The Langevin-Cooper language stops short of granting federal employees the right to protest agency job competition decisions at GAO and the Court of Federal Claims, but instead offers a statement endorsing comparable legal rights for Defense employees and contractors.

"In order to ensure that, when public-private competitions are held, they are conducted as fairly, effectively and efficiently as possible, competing parties . . . or their representatives . . . should receive comparable treatment throughout the competition regarding access to relevant information and legal standing to challenge the way a competition has been conducted at all appropriate forums," the amendment states.

This "sense of Congress" provision would open the door for federal employee unions to later push for more concrete language on appeals rights.

In a statement accompanying the amendment, Langevin said the measure will "address a concern about existing employee contracting procedures in the Department of Defense." Since "access to affordable health care presents a great challenge to many's important that contractors not have an incentive to limit health coverage in order to make their bids more attractive," he added.

The American Federation of Government Employees applauded the amendment for eliminating "loopholes" in current job competition policies at the Pentagon. Union President John Gage predicted that "there will be attempts to prevent this meritorious language from being considered by a House-Senate conference," but vowed to fight any such action.

White House officials stepped in to modify competitive sourcing language offered last fall as part of fiscal 2004 budget measures, and eventually succeeded in weakening many of the union-backed proposals by issuing veto threats. Union efforts to attach competitive sourcing language to past Defense authorization bills also have failed.

The Langevin-Cooper language is a "kind of kitchen-sink approach to public policy," said Stan Soloway, president of the Professional Services Association, an Arlington, Va.-based contractors association. "It combines into a single proposal virtually every anti-competitive sourcing idea that has been proposed over the last several years, and, in doing so, could have massive ramifications for the Department of Defense."

Sen. Susan Collins, R-Maine, chairwoman of the Senate Governmental Affairs Committee, also is pursuing legislation granting federal employees the right to challenge some job competition decisions at GAO, but the effort is taking longer than originally planned.

Collins is gathering support for the appeals rights measure and finalizing details of the legislation, said Andrea Hofelich, a committee spokeswoman. Committee staff members had planned on having a bill ready the last week in April. Capitol Hill and union sources say Collins is considering attaching her language to the Senate version of the 2005 Defense authorization bill, rather than introducing a stand-alone measure.