VA asks Congress for $75 million to restart competitive sourcing program

In a bid to restart its competitive sourcing program, the Veterans Affairs Department is asking Congress for authority to tap up to $75 million in health care funds to pay for public-private job competitions through 2004.

But House Democrats immediately denounced the proposal, and a spokesman for a key House Republican said he would not lead efforts to secure the funding for the VA.

The request, which was cleared by the Office of Management and Budget, would allow the Veterans Health Administration to resume a job competition program that aimed to compete 28,000 jobs by the end of 2004, and 55,000 jobs over the next five years. The VA program has been on hold since May, when the department's general counsel determined that federal law required the VHA to seek funds from Congress before it could hold competitions on agency jobs.

Under the measure, which was sent to Congress Tuesday, the VHA could transfer up to $25 million in unspent funds to finance competitive sourcing studies in 2003, and an additional $50 million in 2004. Dennis Duffy, principal deputy assistant for policy and planning at the VA, described the request as a "bookkeeping exercise" needed to reimburse agency employees who work on job competitions, and said none of the funds would go to pay IBM Business Consulting Services, a contractor which is providing support to VA's competitive sourcing program.

"We have spent roughly $660,000 for contract support from IBM, and that came out of our general operating fund," he said. "The only money I think we're going to need from the medical care account which is where all this money would be redirected is in the actual staff hours expended by Veterans Affairs personnel."

Duffy said he doubted that VA would actually spend $25 million in either year to stage competitive sourcing studies. "I don't think it is going to be anywhere near $25 million," he said.

To develop its funding request, the VA relied on a similar request from 2001 in which the department asked for and received $17 million from Congress to conduct job competitions in the Veterans Health Administration. Duffy was unsure how much the agency actually spent on studies in 2001. "I don't know that anyone ever did the cost accounting to see how much they spent back then," he said.

If Veterans Health Administration personnel did spend $25 million worth of staff time to stage job competitions, its competitive sourcing program would rank as one of the most expensive in government. The $25 million request does not include funds to pay outside consultants, which would require additional funding.

Most agencies do not track the cost of using their own personnel to support competitive sourcing. One estimate, by a Forest Service employee at the Forest Products Lab in Madison, Wis., found the office spent $350,000 on competitive sourcing over a six-month period in staff time and contract support costs.

The VA request is already facing resistance in Congress. Reps. Lane Evans, D-Ill., and Henry Waxman, D-Calif., wrote House appropriators late Wednesday urging them to oppose the measure. "The Department of Veterans Affairs was created to serve veterans' needs that could not be easily addressed in the private sector," they said in the letter, which was sent to Rep. Bill Young, R-Fla., and David Obey, D-Wis., the chairman and ranking member of the House Appropriations Committee, respectively. "We implore you to reject inclusion of this proposed amendment in your mark of appropriations for VA."

Obey is expected to oppose the VA request, according to appropriations staffers.

Bobby Harnage, the president of the American Federation of Government Employees, the largest federal employee union, also called on appropriators to reject the proposal. "Given the many ways that money could be used to improve the health care our veterans have earned, AFGE will strongly oppose this effort to force veterans to pay for OMB's wholesale privatization agenda," he said.

The measure could be added to the VA fiscal 2004 appropriations bill on Monday, when the House Appropriations Committee marks up the VA bill. It is not currently part of the VA bill, which was approved earlier this week by the House Appropriations Subcommittee on VA, the Department of Housing and Urban Development, and independent agencies.

Rep. James Walsh, R-N.Y., the chairman of that subcommittee, has no plans to introduce the measure as an amendment to the VA bill on Monday, said spokesman Dan Gage.

AFGE staff provided several examples of veterans' health care services that the VA could buy with $50 million, including a new rehabilitation center for veterans with spinal cord injuries. Duffy denied that the request would divert funds away from veterans' health care.

"We're not consuming money that would have gone to the salaries of doctors or nurses or to pay for new pharmaceuticals," he said. "What we're talking about is an opportunity to use staff that are already engaged in [competitive sourcing] activities ... so ultimately we save dollars and reinvest those savings back into veterans' health care."

The VA has estimated that competitive sourcing could save the department $1.3 billion over five yeras.

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