November 24, 2003

At the very last minute, White House officials wrecked a bipartisan agreement to provide all federal employees with some protections against the pro-contractor OMB Circular A-76. Under the threat of veto, the following provisions were scaled back from the Transportation-Treasury Appropriations Bill:

1. Requirement that federal employees in all agencies be allowed to submit competitive bids pursuant to most efficient organization (MEO) plans;

2. Requirement of all agencies that contractors at least promise appreciable savings (Minimum Cost Differentials, MCD's) before taking work from federal employees in order to offset the significant costs of conducting privatization reviews; and

3. Specific authority for the General Accounting Office to choose whether to address the contracting out concerns of the federal employees actually affected by privatization in the same way that GAO has long entertained contractors' concerns (legal standing provision).

These provisions were included in the conference report to the Transportation-Treasury Appropriations Bill under the direction of the chairs of the House and Senate Appropriations Committees as well as the relevant subcommittees (Representative Bill Young (R-FL), Senator Ted Stevens (R-AK), Representative Ernest Istook (R-OK) and Richard Shelby (R-AL)).

The White House threatened to veto the Transportation-Treasury Appropriations Bill if these pro-federal employee provisions were included, causing Chairman Istook and Shelby to significantly scale back the provisions when the Transportation-Treasury Appropriations Bill was included in the Omnibus Appropriations Bill, a massive funding measure that includes several different appropriations bills. The legal standing provision has been dropped entirely, and the most efficient organization and minimum cost differential provisions have been limited to only those agencies funded by the Transportation-Treasury Appropriations Bill. Moreover, White House officials will likely force Istook and Shelby to make the minimum cost differential requirement completely discretionary; in other words, it would be up to management as to whether contractors would at least be required to promise appreciable savings before taking work away from federal employees. The agencies funded by the Transportation-Treasury Appropriations Bill where AFGE has members include:

Department of Transportation
Federal Aviation Administration
Federal Railroad Administration
Federal Transit Administration
National Highway Traffic Safety Administration
National Transportation Safety Board
Saint Lawrence Seaway Development Corporation
Surface Transportation Board
Bureau of the Mint
Federal Law Enforcement Training Center
General Services Administration
National Archives and Records Administration
Office of Personnel Management
Office of Thrift Supervision

White House officials want to weaken the pro-federal employee provisions even further. In fact, they want to make them completely meaningless.

Instead of federal employees being able to submit a Most Efficient Organization plan, White House officials want to allow federal employees to be able to submit only a "More Efficient Organization" plan. As "More Efficient Organization" is not a term of art-in fact, it's not even defined in the A-76 glossary-management can define it to mean whatever's in the interest of management. Worse, as noted above, White House officials will likely insist that it be entirely up to management as to whether contractors should at least be required to promise to provide taxpayers with appreciable savings before taking work away from federal employees.

But White House officials still aren't done doing the contractors' bidding.

The defense appropriations bill includes requirements for the use of Most Efficient Organizations and Minimum Cost Differentials. The interior appropriations bill includes a requirement for the use of Minimum Cost Differentials. Both bills were already signed into law. White House officials are insisting that those requirements be eliminated in the Omnibus Appropriations Bill.

If there were ever any doubt, there can be none now. The White House's "competitive (sic) sourcing" initiative is all about replacing federal employees with politically well-connected contractors. Why else would White House officials so strongly object to requirements that federal employees be able to submit their best bids, require that contractors at least promise appreciable savings before taking work away from federal employees, and that federal employees should have the same legal standing as contractors?

AFGE will work with Republican and Democratic lawmakers to preserve as much of the pro-federal employee provisions in the original Transportation-Treasury Appropriations Conference Report as possible.