04/16/03

Washington - Five members of Congress from Northeast Ohio are pressing the Defense Department to break a controversial year-old contract that privatized more than 500 federal jobs in Cleveland.

In a letter sent this week to Thomas Bloom, director of the Defense Finance and Accounting Service, the lawmakers say the agency has the legal authority to "right the wrong that was done to taxpayers" and government workers when the jobs were privatized because of a costly bidding error.

The letter was written by Cleveland Democratic Rep. Dennis Kucinich and signed by Democratic Reps. Stephanie Tubbs Jones of Cleveland, Sherrod Brown of Lorain and Marcy Kaptur of Toledo, as well as by Republican Rep. Steve LaTourette of Madison.

Claudia Bogard, director of corporate communications for DFAS, said yesterday that the agency disagrees with the lawmakers that it has the authority to quickly cancel the contract but is "considering all options" on how to proceed.

"Figuring out what to do next," she said, "is not something you can do in a matter of weeks."

The controversy stems from a recent report by the Defense Department's inspector general's office that found that a $31.8 million error led DFAS to award a private firm a contract to process military retiree and annuitant payments that had previously been handled by government workers in Cleveland.

The error, made by a firm hired to evaluate competing bids for the work, mistakenly added $31.8 million in personnel costs to a bid submitted by the American Federation of Government Employees, whose members had done the work previously. As a result, the contract went to a competing bidder, Dallas-based Affiliated Computer Services.

The lawmakers contend that government contracting regulations allow agencies to cancel contracts under circumstances such as the Cleveland case. Bogard said that government regulations set out a more complicated procedure for canceling such contracts.

To reach this Plain Dealer reporter:

eauster@plaind.com, 216-999-4212