The American Federation of Government Employees filed a lawsuit Thursday protesting a recent decision to contract out management of a Defense Logistics Agency depot in Barstow, Calif.
The lawsuit came on the heels of an announcement last week that several appeals to the award of a depot management contract to EG&G Logistics of Manassas, Va. were denied. If the appeals had been upheld, the work would have remained in-house.
The depot has been managed by federal employees since World War II. AFGE estimates that more than 100 jobs will be cut when the depot work is contracted out.
According to AFGE, the $12 million contract was awarded "arbitrarily and capriciously," and in violation of the rules that govern public-private competitions.
The DLA cost comparison did not compare costs for the same scope of work and did not include a thorough analysis of EG&G's costs, the complaint said. It also overestimated the costs for keeping the depot work in-house.
DLA's "most efficient organization" cost estimate for keeping the work within government was approximately $17 million with 66 employees, which would have meant a staff reduction of 59 percent.
On the cost-comparison form, EG&G's best offer was to employ 62 people for a price of about $13.2 million.
AFGE alleges in the complaint that both the in-house and contractor cost estimates are "overstated, unrealistic and unfair."
The union charges that EG&G's estimated work hours did not account for breaks, safety, training and other non-productive time, as the depot's did. Those costs were understated by $510,000, AFGE said.
The private offer also included lower standards of performance, and DLA did not adjust either offer to ensure the levels of performance were the same, AFGE said. While DLA's internal offer included work by two different grade levels of employees, EG&G lumped the classifications together. Had DLA adjusted for this, EG&G's costs would have been $641,164 higher, the complaint said.
The company's offer also incorrectly applied wage rates, an error that would have raised their costs another $948,000 had it been caught, AFGE said.
"This complaint reveals the truth behind contracting out in the federal government-laws, regulations and the public interest are thrown to the wayside," AFGE President Bobby Harnage said.
AFGE has also protested a decision to award EG&G a contract to manage a depot at Robins Air Force Base, Ga. The appeals period ends in early April for that decision, which could affect 445 federal employees.
The Barstow turnover to EG&G is expected to be complete by the end of July. AFGE is seeking immediate relief from the courts due to the pending action.