Letter To The Honorable Robert Gates, Secretary, U.S. Department Of Defense

Letter

West Point Study is Particularly Flawed; Army Changed The Requirements For Current Workers Halfway Through

In Personal Letter To Gates, Senators Ask For An End To A Flawed Study

Senators Charles E. Schumer and Kristen E. Gillibrand today called on U.S. Defense Secretary Robert Gates to cancel the flawed A-76 study now underway at West Point Military Academy that could cost the region over 500 well paying, stable jobs. Senators Schumer and Gillibrand noted that this type of study has been recognized as so flawed that it was outlawed by Congress last month. Unfortunately, studies currently underway, including the one at West Point, have been allowed to continue without further review.

"Putting more than 500 jobs at risk by continuing with a process that independent review has proved to be flawed makes no sense," said Schumer. "Cutting these jobs will not certainly be more cost effective, but will certainly create a great deal of hardship in an already difficult time. I call on Secretary Gates to take a hard look at this process, started under the previous administration, and do the right thing by ending it."

"During these tough economic times, we need to maintain as many jobs as possible in our communities," said Senator Gillibrand. "The study underway at West Point is obviously unfair and must end. I will work with Senator Schumer to end this study and keep our jobs here at West Point."

The A-76 study currently underway at West Point is particularly flawed, noted Schumer and Gillibrand. For one, it is measuring two employment structures that cannot be accurately compared. The study estimates the total cost to the Army of continuing to use federal employees. However, when soliciting bids from private contractors, the Army is asking for a "cost plus firm fixed fee" contract. These contracts do not require the contractors to estimate their costs, and mean that the Army will have to pay whatever the contractor bills. If this contract is privatized, it could easily cost the Army more money than using the current unionized workforce. That risk alone is sufficient proof that the study is flawed.

The senators also noted that the study is flawed because the Army changed the requirements for the union halfway through. Originally, the Army allowed the union to combine the operations/maintenance and custodial responsibilities into a single bid, which allowed them to achieve economies of scale. Halfway through the process the Army required the union to separate these two contracts, but did not allow them to begin the process over.

Schumer and Gillibrand noted that with such an inherently flawed process, the costs at West Point could indeed increase, leaving the Army and the taxpayer on the hook. Given the level of cost involved and the possible hardship that may be forced upon the current West Point employees - with no benefit to the taxpayer, Army, or anyone else - Schumer and Gillibrand are asking for a cancellation of the study.

The Office of Management and Budget (OMB) established the A-76 study to ensure that the government does not waste taxpayers' money by paying government employees to perform tasks which could be completed at a lower cost by private contractors. However after studies by the Government Accountability Office caused great concern about the accuracy of such studies, Congress acted in the Fiscal Year 2009 Omnibus Appropriations bill to curtail the A-76 process. President Obama, too, has issued an executive order to stop new A-76 studies.

The full text of the letter is below:

The Honorable Robert Gates
Secretary, U.S. Department of Defense
1000 Defense Pentagon
Washington, D.C. 20301-1000

Dear Secretary Gates:

We write to you today to express our strong concerns regarding the OMB Circular A-76 Study currently underway to review the operations, maintenance, and custodial duties at West Point. Congress and the President have expressed deep reservations with this process, and we encourage you to defer completing this and any pending studies until the process can be improved or replaced. Regardless, however, of the Defense Department's (DOD) stance on the larger question of A-76 studies, we believe that the serious concerns raised by West Point's union warrant cancellation of this study. With the accuracy of the study in question, it would be far preferable to cancel this study and begin a new one.

The Office of Management and Budget (OMB) established this type of study to ensure that the government does not waste taxpayers' money by paying government employees to perform tasks which could be completed at a lower cost by private contractors. Although we support the goal of saving taxpayer dollars, we are concerned by mounting evidence that the process unfairly disadvantages federal employees and fails to save any money. After studies by the Government Accountability Office, Congress acted in the Fiscal Year 2009 Omnibus Appropriations bill to curtail the A-76 process. President Obama, too, has issued an executive order to stop new A-76 studies. With such serious reservations at the highest levels of government, we believe that the responsible course of action would be to stop any A-76 studies currently under way.

The study underway at West Point has several serious flaws. First, the process compares different price structures, making it impossible to evaluate accurately which is the lower cost. For federal employees, the study estimates the total cost to the Army of performing the work. However, when soliciting bids from private contractors, the Army is asking for "cost plus firm fixed fee" contract. These contracts allow for variable costs, which cannot be accurately compared to the fixed cost used for continuing with federal employees.

Second, the Army changed the requirements for the union halfway through the study. Originally, the Army allowed the union to combine the operations/maintenance and custodial responsibilities into a single bid, which allowed them to achieve economies of scale. Halfway through the process, Army required the union to separate these two contracts, but did not allow them to begin the process over.

Given the serious concerns related to these studies in general, and this study in particular, we urge you to cancel the study. Millions of taxpayer dollars are at stake, and we cannot afford to risk wasting them by engaging in an inaccurate and unfair process.

We look forward to your reply. If you have any questions, please do not hesitate to contact John Jones, of Senator Schumer's staff, at (202) 224-6542, or Kevin Fink, of Senator Gillibrand's staff, at (202) 224-4451.

Sincerely,

Charles Schumer Kirsten Gillibrand

US Senator US Senator

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