Can Depots Compete?

THE DAILY FED

Can Depots Compete?

The air logistics centers at Kelly Air Force Base in Texas and McClellan Air Force Base in California, which include maintenance depots, are slated for gradual closure through 2001. The center at Robins Air Force Base in Georgia will compete for work now done at Kelly and the center at Hill Air Force Base in Utah will bid on work now done at McClellan.

But restraints on depot competition favor private companies, union officials say. Only one depot can compete for the work at a closing center and the winning depot cannot use the facilities that are there, though private companies can.

Private companies have some restrictions of their own, including the "60/40" rule, which mandates that 60 percent of all depot work be performed by public employees. The Pentagon is seeking to overturn that rule.

The Clinton Administration delayed the Base Realignment and Closure Commission's 1995 recommendation to shut down Kelly and McClellan until the year 2001 to prevent massive layoffs that would hurt the economies of the areas around the bases. The Administration prefers a strategy of "privatization-in-place," under which a private company would move on to a base slated for closure and take over its operations.

A recent General Accounting Office report found that privatization-in-place at the depots would cost $200 million more a year than simply closing the depots and transfering the work to other facilities.