Department of Interior Letter to Congress

April 7, 2008

The Honorable Norm Dicks                    
Chairman, House Interior                       
Appropriations Subcommittee                
B-308 Rayburn House Office Building      
Washington, DC 20015                          

The Honorable Dianne Feinstein
Chairwoman, Senate Interior
Appropriations Subcommittee
131 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Dicks and Chairwoman Feinstein:

On behalf of the undersigned unions, we urge you to shut down the “competitive sourcing” program in the Department of Interior (DoI).  The department is aggressively reviewing for privatization larger and larger parts of its in-house workforce under the often costly and controversial OMB Circular A-76 only because of intense pressure to achieve contracting out quotas established by the Office of Management and Budget (OMB).

Section 739(d), Division F, of the FY08 Omnibus Appropriations Bill specifically prohibits OMB from directing or requiring an agency to prepare for, undertake, continue, or complete an A-76 study and any agency from following direction or a requirement from OMB to prepare for, undertake, continue, or complete an A-76 study. 

However, internal DoI memoranda clearly show that OMB is telling career managers at DoI how many employees to review for privatization, and when to do so.  In fact, DoI career managers are shown by the internal memoranda to be reviewing employees for privatization solely in order to achieve OMB’s quotas, not on the basis of any research or analysis as to what would be good for taxpayers or DoI.

DoI was charged by OMB with reviewing for privatization 1,400 employees in FY07, which is almost twice the number of employees reviewed for privatization by DoI in FY06 and a significant number, indeed, considering that DoI is one of the smaller cabinet-level departments—with a workforce of 67,000 employees.  In FY08, DoI is required to review another 1,500 employees for privatization. 

In a June 6, 2006, memorandum from Paul Hoffman, Deputy Assistant Secretary for Performance, Accountability, and Human Resources, it is written, “The Department’s FY2005-2008 Competitive Sourcing Green Plan approved by OMB in January 2005, projected that we would announce competitions involving approximately 1,400 FTE during FY2007…(T)he Department’s Green Plan was approved by OMB based on the overall level of commitment made by all of the bureaus/equivalent offices to support the President’s Management Agenda.  While substitutions based on sound business decisions and preliminary planning efforts are perfectly appropriate, we expect bureaus/equivalent offices to maintain at least a level of competitive sourcing activity to honor the original commitment.”  In other words, while the details might change, DoI must review at least 1,400 jobs for privatization.  Identical language was used to justify reviewing another 1,500 jobs for privatization in FY08. 

The charts attached to the FY07 and FY08 Hoffman memoranda (DoI Commercial Activities Likely To Be Announced For Competition) have blank spaces for several categories: bureaus, # of FTE, announcement date, type of competition, and comments, but one item is filled in already—1,400 in FY07 and 1,500 in FY08, i.e., the total number of FTE to be reviewed for privatization during those years.  In other words, the entire objective of the “competitive sourcing” effort is to come up with certain numbers of jobs to review for privatization; it doesn’t matter how those jobs are chosen, whether DoI managers believe those choices to be in the best interests of taxpayers or the agency’s mission, because all that ultimately matters is meeting OMB’s quotas.   

OMB’s direction to DoI to hit its A-76 quotas or else isn’t just bad public policy, it is clearly contrary to Section 739(d).  Indeed, there is no evidence that DoI is in compliance with this important new law.  Has DoI, which, historically, has struggled to achieve OMB’s quotas, issued any guidance to implement this provision?  Has DoI repudiated the quotas for FY08 that were openly established at OMB’s direction?  Has DoI reassessed its competition schedule to determine which studies it would have undertaken or continued on its own, after OMB’s influence had been excised?  No, it’s business as usual.  How could it be that DoI’s A-76 schedule is the same after enactment of the prohibition as it is before? 

Last year, the Congress, with strong, bipartisan support, shut down “competitive sourcing” programs in the Corps of Engineers; the Bureau of Prisons; the Department of Labor; and, thanks to your leadership, the Forest Service.  Not one of those efforts elicited a veto threat from the White House.  The first, third, and fourth of the prohibitions discussed above were “strongly opposed” by the Administration, while the second provision went unnoticed.  Three of the four provisions in House-passed bills met up with identical provisions in the Senate and were retained in the Omnibus Bill; the other provision, this one for the Corps of Engineers, was expanded on by the Senate and also retained in the conference report for the Omnibus Bill. 

The Government Accountability Office (GAO) recently reported (GAO-08-195) on the Forest Service’s use of “competitive sourcing”.  Agency officials told Congress the agency saved more than $38 million between 2004 and 2006, but, according to GAO, they couldn’t say how they arrived at that figure or provide supporting data.  The agency didn’t have complete and reliable cost data from those two years to show whether it complied with statutory spending limits on competitive sourcing and accurately reported savings to Congress.  Moreover, the agency also excluded a number of costs that would have cut into the $38 million in savings.  For example, agency officials told GAO that they didn’t include about $40 million in information technology transition costs from the savings totals.  We don’t believe DoI’s record is any better; based on our experiences, it is far worse.  Indeed, some of GAO’s most significant concerns with the Forest Service’s “competitive sourcing” program reflect systematic problems with the guidance OMB provides to all agencies, including DoI. 

In FY04, FY05, and FY06 (the last year for which this information is available), in-house employees never lost a privatization review at DoI, according to OMB.  Obviously, in asking for a moratorium on DoI’s use of the A-76 process, we are not asking Congress to defend a lazy, shiftless workforce.  In fact, as bad as it is for DoI to helplessly and heedlessly carry out an OMB-directed privatization effort, it is almost as objectionable that DoI has failed to allow its formidable in-house workforce to compete against contractors for new and outsourced work.  But then OMB’s “competitive sourcing” effort is all about reducing the number of federal employees, and not about making agencies more efficient. 

Sincerely,

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO

AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO

AMERICAN FEDERATION OF TEACHERS, AFL-CIO

DEPARTMENT FOR PROFESSIONAL EMPLOYEES, AFL-CIO

INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, AFL-CIO

INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO

INTERNATIONAL FEDERATION OF PROFESSIONAL AND TECHNICAL ENGINEERS, AFL-CIO

NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES

NATIONAL FEDERATION OF FEDERAL EMPLOYEES, AFL-CIO

NATIONAL TREASURY EMPLOYEES UNION

TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO

UNITED AUTO WORKERS, AFL-CIO