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Depots could outsource more work under Defense proposal

Private contractors could perform more work at military depots under a Defense Department proposal now before Congress.

The measure would modify the so-called 50-50 rule, which prohibits depots from spending more than half of their maintenance dollars on contract repairs. Under the new proposal, the military services could shift more depot maintenance work to contractors, but would be required to perform at least half of all depot-style repairs at the depots themselves.

This means that contractors could handle more repairs so long as they performed the work at military depots.

The Pentagon believes the change would keep work at the depots, a concern of members of Congress with depots in their districts, while encouraging depots to form new partnerships with private companies to handle their workload.

"The proposed change . . . keeps half of the workload at government depots, but it encourages partnerships with the private sector by allowing some of that work to be performed on the depot by private sector partners," said spokesman Navy Lt. Cmdr. Donald Sewell.

But the leaders of the House Depot Caucus oppose the measure. On Thursday, Caucus Co-Chairman Rep. Solomon Ortiz, D-Texas, accused Defense's leadership of "hubris" for trying to change the 50-50 rule.

"Some members of the Depot Caucus have voiced opposition to [the proposal] in that it is just more hubris to undermine the nation's in-house depot maintenance capacity by eliminating the 50-50 rule," said Ortiz, who is also the ranking member of the Military Readiness Subcommittee of the Housed Armed Services Committee. "We have that rule for a reason, so we have a ready source for repair. While the nation prosecutes a new war, that rule is all the more important," he said.

The Republican Co-Chairman of the Depot Caucus, Rep. Walter Jones, R-N.C., endorsed Ortiz' comments, according to Lanier Swann, a spokeswoman for Jones.

Defense considered asking for broad new authority to manage its depots, including the outright elimination of the 50-50 rule and six other statutes that affect depot management, before opting to ask for more limited flexibilities.

The Depot Caucus is wary of any changes to depot rules because of this earlier proposal, an observer said. "It did a lot of damage," said one source. "I think a lot of members are convinced that [DoD leadership] is out to get them."

The current proposal is Section 324 in Defense's recommendations for the fiscal 2004 authorization bill.

The American Federation of Government Employees and 12 other labor groups also oppose Section 324. "[It] would lead to the destruction of any in-house depot maintenance capacity," said a March 19 letter from the groups to the chairmen of the House and Senate Armed Services Committees, Rep. Duncan Hunter, R-Calif., and Sen. John Warner, R-Va.

Industry supports the proposal, according to Pete Steffes, vice president for government affairs at the National Defense Industrial Association.

Many military services have struggled to comply with the 50-50 rule in recent years. The Air Force in particular has struggled to meet the 50-50 restriction, and the General Accounting Office has questioned whether any of the military services are actually complying with the outsourcing rule.