Army outsourcing effort bombarded with complaints

The Army's effort to privatize its supply operation has been bombarded with complaints that threaten to unravel a much-needed modernization of the service's logistics system.

Under the Wholesale Logistics Modernization Program, the Army plans to contract out management of the processes and computer systems used to procure and manage stores of equipment, spare parts and supplies worldwide. The result will be a more responsive supply network, allowing the Army to track shipments at all times and reduce excess inventories, officials say. But up to 500 employees at Army logistics software centers in Chambersburg, Pa., and St. Louis, Mo., will lose their jobs.

The Army announced its decision to outsource the supply operation in April, using a clause in Office of Management and Budget Circular A-76 to avoid a lengthy public-private competition for the work that would have given the employees a chance to defend their jobs. Ever since the announcement, opposition to the effort has been growing.

• The employees have filed an appeal with the Secretary of the Army under the same clause the service used to avoid an A-76 competition. If the secretary grants the appeal, a competition will take place. Local 1763 of the National Federation of Federal Employees in St. Louis filed the appeal in May. The secretary was supposed to issue a decision within one month, but postponed his decision twice. A decision is expected next month.
• Employees at St. Louis have also filed an age discrimination complaint with the Army's equal employment opportunity office, charging that the service is basing its actions to get rid of the employees on the false assumption that the employees are too old to be trained in new business and technology practices.
• The Small Business Administration has filed an appeal of the program's acquisition strategy with the Secretary of the Army. The SBA contends that the program's contract is a bundle-numerous little jobs packaged into a single solicitation. Bundling blocks small businesses from competing for government work, SBA argues. The Secretary of the Army's decision is expected early next month.
• Capitol Hill has weighed in as well. Rep. Jim Talent, R-Mo., tucked a provision into the House version of the fiscal 2000 Defense authorization bill that would have required the Army to allow the current employees to compete for their jobs. That provision was watered down in conference with the Senate to a sense of Congress resolution that "it is extremely important that the Army Materiel Command retains sufficient in-house expertise to ensure that readiness is not adversely affected by the modernization efforts and to effectively oversee contractor performance."

John Morris, president of Local 1763, said morale among employees has plummeted.

"They're bailing ship," he said. "The contractors can bring IT people and ADP people to the table, but where are they going to find, say, an Army logistician with 30 years of Army logistics system background and training?"

The employees are being offered buyouts, but officials are cautioning that buyout offers may be rescinded if the outsourcing effort is thwarted.

In the meantime, the Army is moving forward with the effort; contract award is scheduled for December. It already is at least a year behind schedule.