Programs for disabled and blind facing increased scrutiny

Two federal programs that provide jobs for disabled and blind Americans are under scrutiny in the Senate and face possible overhauls after operating for decades with minimal government oversight.

The Javits-Wagner-O'Day, or JWOD, program aimed at employing disabled workers and the Randolph-Sheppard program for the blind are likely to be the subjects of lobbying fights on Capitol Hill. The programs' beneficiaries, including many disabled entrepreneurs and workers, are fighting among themselves for shares of available funding, even as senators sketch out possible reforms.

Sen. Michael Enzi, R-Wyo., the chairman of the Health, Education, Labor, and Pensions (HELP) Committee, says that the two programs are "well-intentioned" but "long overdue for oversight." At a committee hearing in October, ranking member Sen. Edward Kennedy, D-Mass., echoed Enzi's criticisms, declaring that "there's no excuse for fraud and abuse. The time is right for reform."

JWOD was created in 1938 and amended in 1971. Its governing board is appointed by the president. JWOD serves as the government's broker for approximately $2 billion worth of low-tech services and products, such as office supplies, janitorial services, and furniture, purchased by federal departments and agencies. The supplies and services are provided by JWOD-approved private businesses that employ roughly 45,000 disabled workers nationwide.

These businesses face minimal competition within the JWOD program. JWOD officials decide which private enterprises get particular contracts, and also set the prices that federal agencies must pay to these enterprises. Moreover, about 4 percent of the $2 billion in annual sales, or $80 million, is rebated to two JWOD nonprofit management companies, the National Industries for the Blind in Alexandria, Va., and NISH, formerly the National Industries for the Severely Handicapped, in Vienna, Va.

Commercial vendors and some groups representing the disabled have loudly criticized JWOD, saying that the program excludes them and their workers from government contracts. These critics also say that the program segregates disabled workers from the commercial market, overcharges the federal government, and generates excessive profits for the owners of the JWOD-sanctioned enterprises, most of whom are not disabled.

At the hearing, Enzi released a report that said only 2,370 disabled workers had moved from the JWOD program into the commercial marketplace in 2004, and it highlighted numerous examples of "excessive executive compensation, lavish perquisites, conflicts of interest, and self-dealing" within JWOD enterprises.

In July, JWOD officials dropped plans for new oversight rules for JWOD enterprises. These rules would have set salary caps for executives and established conflict-of-interest provisions for the enterprises' governing boards. JWOD "is planning on issuing a new proposed rule by the end of the year," a program spokesman said in an interview.

Enzi also criticized the 1936 Randolph-Sheppard Act, which puts blind business owners first in line to run kiosks and dining halls at federal buildings and camps. The program awards some lucrative contracts to blind business owners without ensuring employment for disabled workers, he said.

Enzi gave little indication of what reform would involve, but said, "We can do better than this by getting more workers into the employment mainstream." No reform bill will likely appear this year, said Enzi spokesman Craig Orfield. "We're several steps away from introducing a bill."

James Gashel, executive director for strategic initiatives for the National Federation of the Blind, said that the 2,600 blind business owners working under Randolph-Sheppard want to keep their program intact because it works well. The two Randolph-Sheppard programs, NIB and NISH, also face competition from JWOD contractors.

Gashel spends much of his time fending off efforts by JWOD enterprises to gain control of military dining hall contracts now held by 39 blind business owners. "We tried for two, three years to be accommodating with them in Congress by offering agreements that they never would accept," he said.

NISH is the leading player in the JWOD sector, in part because it serves as the back office for roughly 80 percent of the JWOD-affiliated enterprises. With its share of the rebate, NISH identifies products for inclusion in the JWOD program and searches for commercial opportunities for the JWOD enterprises, including the contracts now held by the Randolph-Sheppard businesses.

Tony Young, NISH's wheelchair-bound senior public policy director, testified to Enzi that military dining halls don't belong in the Randolph-Sheppard program. He urged greater federal use of the JWOD program, and declared that NISH is proud of the employment, wages, and dignity brought to the program's disabled workers.

Commercial vendors of office products and furniture, allied under the Independent Office Products and Furniture Dealers Association, want to shrink or change the JWOD program. The group complains that the program has taken business and jobs away from its members.

Paul Miller, government affairs director of the association, says that his group's companies can employ a larger number of disabled people, but they need incentives from the government to pay the cost of extra aid and technology for these workers. Private companies, he said, also need liability protection to avoid the legal risks involved in laying off disabled workers along with other workers.