VA weighs whether to stop job competitions at laundries

The Veterans Affairs Department, after halting most of its competitive sourcing activities in May due to legal concerns, is weighing plans to finish public-private job competitions at 59 laundry facilities nationwide.

On April 28, the VA General Counsel issued a legal opinion that prompted the VA to put most of its competitive sourcing activities on hold. The ruling held that, by law, the VA could not hold competitions on Veterans Health Administration jobs unless Congress funded the competitions. Congress has yet to do so.

But VA officials, concerned that the ruling could interfere with other laws that govern the department's contracting with medical schools, have requested a clarification of the April 28 ruling. Depending on this clarification, which could be issued as early as Monday, the VA may decide to finish competitions on its laundries.

"The general counsel will likely provide an opinion on this issue during the early part of next week," a VA official said late Friday. "With that opinion, decisions will be made as to whether we proceed or not with the laundry studies."

This statement modifies earlier comments by VA Secretary Anthony Principi that suggested the VA would continue its laundry competitions while waiting for the general counsel to clarify its ruling.

"Pending clarification on this point, VA has elected to complete the studies of laundry production and linen management services," Principi wrote in a July 24 letter to Rep. Lane Evans, D-Ill.

VA officials have said that laundry competitions are unique, because many already were underway when the general counsel issued its April 28 ruling. "The laundry studies were initiated well before we received the at-large opinion from our general counsel," said Gary Steinberg, VA's deputy assistant secretary for planning and evaluation.

But congressional observers questioned the legal basis for finishing the laundry competitions. "Based on the definitiveness of the general counsel opinion, I am curious to see from where an exception for laundry services springs," said Len Sistek, Democratic staff director of the Subcommittee on Oversight and Investigations of the House Veterans Affairs Committee. Evans has asked the General Accounting Office to investigate whether the VA has authority to continue the competitions.

Bobby Harnage, president of the American Federation of Government Employees, a union that represents VA employees, threatened legal action if the VA does not halt studies on laundry workers.

"If the VA does not immediately cease, AFGE will be forced to take further legal action to stop any irreparable harm to our members and to hold those responsible accountable to the taxpayers," he said Friday. In a July 30 letter to Principi, Harnage said the VA has continued to stage competitions at laundries at Perry Point, Md., and Richmond, Va., among other sites.

Industry officials support continuing the laundry competitions. "To the extent the VA would outsource their laundry operations, our members would certainly like the opportunity to bid," said Dick Ekfelt, president and CEO of the Textile Rental Services Association, an association of 200 commercial laundry firms based in Alexandria, Va.

To date, the VA has finished competitions on five laundries. All of the competitions have been won by private firms or medical schools, according to Steve Gorfain, business operations liaison at the VHA. Roughly 1,000 civil servants work at VA laundry facilities.

Senior VA leaders asked the general counsel's office to clarify its ruling at a July 15 meeting.

The VA is pursuing legislation in Congress that would allow it to restart its larger competitive sourcing program, which aims to compete 55,000 agency jobs over the next five years. The department has asked appropriators for authority to tap up to $75 million in health care funds- $25 million in fiscal 2003 and $50 million in fiscal 2004-to pay Veterans Health Administration personnel who help stage job competitions. The House did not approve this request in its version of the fiscal 2004 VA spending bill, passed last Friday. The Senate has yet to act on its version of the VA appropriations bill.

The VA also is planning to start a competition involving 1,500 employees of its canteen service, which provides cafeteria services on an outpatient basis. The canteen service is an independent unit within VA and is not affected by the April 28 ruling. In a July 30 letter to Office of Management and Budget Director Joshua Bolten, Evans questioned why the VA was studying the canteen service, arguing the unit has "continued to innovate" to better serve veterans.

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