Lawmakers stand ground on Pentagon job competition rules

In a letter sent Monday, almost two dozen members of Congress, including Sen. Edward Kennedy, D-Mass., and House Minority Whip Steny Hoyer, D-Md., told Defense Secretary Donald Rumsfeld that they will oppose efforts to modify health care provisions regarding job competitions included in the fiscal 2005 Defense Department Appropriations Act.

The act, which was signed into law in August, prohibits agencies from favoring contractors that offer less comprehensive health insurance plans than those offered by the federal government. It was designed to require comparable health benefits between contractors and the government.

The Defense Department sent a letter to OMB in November expressing support for either a repeal of that section of the act or a measure to grandfather in its provisions to avoid interrupting ongoing competitions.

The letter, signed by Deputy Undersecretary of Defense Philip Grone, said, "Ultimately, we believe the provision will decrease private sector participation in our public-private competitions."

The letter continued, "[O]ur assessment at this time is that the provision may skew competition in favor of in-house performance, while not necessarily preserving or improving health care in cases where the private sector may be selected as the service provider." It added that the legislation will especially hurt small businesses, which are more likely to offer limited health insurance plans.

Monday's letter from members of Congress affirms their commitment to immediately implement the act and enforce it with ongoing competitions. "The provision levels the playing field for federal employees and contractor employees when it comes to health benefits and fair competition," the letter stated.

This latest controversy over job competitions between federal workers and the private sector comes at time when OMB has downgraded the competitive sourcing score of the Defense Department, which holds more competitions than any other agency. The score was downgraded because planned competitions were canceled, OMB said.

Joe Sikes, Defense's director of competitive sourcing and privatization, said one challenge has been implementing the health benefits legislation. "It's pretty onerous to small business," he said.

"You're basically forcing employers to provide benefits that maybe employees don't need," said Cathy Garman, senior vice president of public policy at the Contract Services Association. She said small businesses may have many retired military employees who already have health insurance, or employees with spouses who have family benefits.

"They give those employees better benefits in other areas," such as day care, for example, she said.