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GAO: West Point should cancel jobs outsourcing

A U.S. Military Academy decision to outsource public works jobs was flawed and should be canceled, the Government Accountability Office said.

In an Oct. 20 ruling published today, GAO ruled the Army erred in comparing federal employee and contractor bids when it decided in March to outsource 394 Defense Department civilian jobs to Ginn Group Inc. of Peachtree City, Ga.

The Army accepted revisions to the Ginn proposal without confirming those revisions were achievable, GAO said. Because Ginn’s health care and retirement benefits cost less than federal employee benefits, the Army, as required by law, raised Ginn’s rates to federal levels. To account for the increase, Ginn lowered the rates it would charge the government for other benefits without showing those savings were attainable, GAO said. In addition, Ginn failed to prove claims that it would perform the work for 10 percent less than federal employees, the congressionally set threshold for outsourcing work, GAO said.

The errors “call into question the savings that the Army calculated would be achieved by awarding a contract for public works services to Ginn,” GAO concluded.

Because re-evaluating the bids would add to the cost of the jobs competition and reduce the savings, GAO recommended the Army cancel the procurement and keep the work with federal employees.

The American Federation of Government Employees, which represents the public works employees at West Point, N.Y., and protested the award to GAO, applauded the decision.

“The GAO decision illustrates the failure of the [public-private competition] process as implemented by DoD,” AFGE said in an Oct. 22 news release. “The Army started working on this study in 2002. After seven years and likely millions of dollars in consultant fees and staff time, the Army could not provide any evidence to GAO that a contractor is more efficient than the federal employees.”

But AFGE was also critical of GAO for not overturning more employee protests of public-private competitions. Congress gave federal employees the right to protest public-private competitions through GAO in 2008.

“The bid protest process has not worked to protect the interests of taxpayers and federal employees to the extent intended by authors of the law that gave federal employees the same appeal rights that have long been enjoyed by contractors,” AFGE national President John Gage, said in the Oct. 22 statement.