Provision to lift VA competitive sourcing ban survives

An initial attempt at stripping a Senate health care bill of language that would allow the Veterans Affairs Department to resume competitive sourcing studies failed narrowly on Thursday.

During a markup of the 2005 Veterans Health Care Act (S. 1182), the Senate Veterans Affairs Committee by a 7-7 vote rejected a union-backed amendment that would have eliminated the provision from the bill. The vote fell mainly along party lines, with Sen. Arlen Specter, R-Pa., providing the only Republican support.

The health care bill will now make its way to the Senate floor. Sen. Larry Craig, R-Idaho, chairman of the committee, said in a statement that he hopes to "move forward quickly and get [the legislation] passed by the Senate before the end of this year."

VA could save as much as $1.3 billion over five years by conducting public-private job competitions, Craig stated. The department has been unable to run contests since April 2003, when the VA general counsel found that a 1981 statute bars the Veterans Health Administration from comparing the cost of outsourcing to that of keeping work in-house unless Congress provides funding.

Department officials are pursuing business process reengineering, where managers look for ways to make the current workforce more efficient, as an alternative to competitive sourcing. Such studies cost less than public-private competitions and do not put VA employees out of work, said Marilyn Park, a lobbyist for the American Federation of Government Employees.

The money that VA would spend hiring consultants to help with competitive sourcing studies should be going toward health care and other veterans services, Park said.

"Recent damage caused by Hurricane Katrina to VA facilities, combined with severe budget shortfalls on top of rising health care costs, make it more and more difficult for the VA to provide veterans with access to medical care," said Sen. Patty Murray, D-Wash. Murray said she would vote against the entire health care bill if it contained language allowing competitive sourcing to resume at VA.

But in a statement supporting the language, Chris Jahn, president of the Contract Services Association, an industry group, argued that public-private job competitions would save VA money that could then be "used to provide better care for our veterans."

Craig made a similar case. "In this time of tight budgets, we need to harness the phenomenal efficiencies of the free market and get better health care results at the same time," he stated.

Park said she was heartened to see that some of the committee's Republicans voting in favor of the bill still expressed concerns about competitive sourcing costs. AFGE is working to make senators aware of "what [the language] will mean for taxpayers and veterans in terms of both health care and jobs" in case the bill comes up for a vote later this fall, she said.

There is not yet a companion bill in the House.