VA blocks A-76 outsourcing studies

The Veterans Affairs Department has collided with the Office of Management and Budget's A-76 competition rule by stopping use of its employees to conduct outsourcing studies of agency jobs, a VA official said today.

VA's insubordination is no mutiny but stems from statutory language in 8110(a)(5), Title 38 of the U.S. Code, which forbids applying VA health-care funds to outsourcing studies.

As a result of an April 28 ruling, the VA stopped competitive-sourcing cost studies of jobs within the Veterans Health Administration by VHA employees because they are paid out of VA health care appropriations, said Dennis Duffy, VA principal deputy assistant secretary for policy and planning.

VA wanted to use employee teams to assist in defining the work process and best practices of singled-out jobs.

It will require Congress to modify the language. 'We would hope that that amendment would be included if the Bush administration proceeds with any supplemental appropriations for 2003,' Duffy said. If not, revised language will be put in VA's 2004 budget request.

VHA employs 220,000 across the nation, and the bulk of those jobs are considered commercial in nature under A-76. About 52,000 employees in 18 job categories were identified earlier for possible privatization under a five-year plan, he said. They are ancillary support functions, not directly related to veterans' health care, he said. These jobs include nutrition and food service, dry cleaning, bio-medical engineering, and facilities maintenance and engineering.

No information technology services are included. Over the last two years, VA has been consolidating IT operations and implementing complex, integrated enterprise architecture.

'The only reason to do competitive studies would be to gain an estimated $1.3 billion over five years, which would be redirected back into health care services,' Duffy said.

VA is currently unable to enroll all veterans in its health care system because of insufficient funds.

Savings come from engaging in competition, he said. 'Even if you don't contract out these services, you'll garner savings from re-engineering and innovation, like redesigned work processes,' Duffy said.

For example, there are 6,000 pathology labs in 170 locations around the country. With new technology, some pathology services can be consolidated into regional reference labs for a number of hospitals.

VHA can still pursue competitive sourcing in canteen services because those services are paid out of a revolving fund. It will initiate a study before September of 1,500 positions in cafeteria and food court services for outpatient clientele and employees.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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