VA moves to outsource property management jobs

In a move that eliminates the jobs of 125 employees, the Veterans Affairs Department has tentatively decided to outsource its property management function to Ocwen Federal Bank, a financial services company based in West Palm Beach, Fla.

The decision, announced Feb. 14, resolves a public-private job competition that lasted more than three years and cost the department more than $1 million to administer, souring VA management on the government's job competition process. If the decision withstands appeal, the VA will try to find other jobs in the department for displaced employees, said spokesman Terry Jemison. The employees currently manage and sell real estate that becomes VA property when veterans and military personnel foreclose on loans guaranteed by the department.

"We would proceed to try and find positions for them within VA," he said. "There would probably be a mechanism for overseeing the contract that might account for two to three dozen [positions]."

But the decision to outsource already is under fire from a key congressman and a federal employee union. Rep. Lane Evans, D-Ill., called on the department to cancel its award to Ocwen in a Feb. 28 letter to Veterans Affairs Secretary Anthony Principi. Evans, ranking member on the Subcommittee on Benefits of the House Veterans Affairs Committee, said Ocwen could use low-paid foreign workers to handle the property management work, a business practice the company has used in the past.

"The VA decision to outsource to Ocwen sends a clear signal that the Department of Veterans Affairs and the Bush administration fully support exporting jobs to foreign countries, jobs which could be performed in America by veterans," he said.

Principi will address Evans' concerns, Jemison said. Ocwen did not respond to questions asking whether the company would shift the work overseas.

The American Federation of Government Employees, which represents the VA workers, plans to appeal the decision. "We have identified some procedural and accounting errors that we will appeal," said Wiley Pearson, a policy analyst with the union.

The decision is considered tentative until VA has heard all appeals. The department will issue a final verdict by April 26, according to Jemison.

The considerable length and cost of the competition-which started before the Bush administration launched its competitive sourcing initiative-is one reason why VA officials developed an alternate method for holding job competitions. The method, which was approved last April by the Office of Management and Budget, retains many features of the standard public-private competition process. But instead of seeking private sector firms to square off against VA employees, the VA would conduct market research to see if a function could be performed more efficiently in the private sector.