Advisory Agency Recommends Phaseout and Replacement of Disability Employment Program

A federal advisory agency recommended an eight-year phaseout and replacement of an 82-year old federal program that helps people with disabilities obtain employment because the program is “out of sync” with modern disability policies, among other reasons. 

The National Council on Disability, a bipartisan and independent agency, published a report on October 14 about the AbilityOne Program––one of the nation’s largest employment programs for the blind and others with significant disabilities––under which the federal government procures goods and services at fair market prices through a network of about 500 nonprofits. A commission of 15 members appointed by the president and Congress oversees the program that traces its roots to the 1930s. 

The report builds on issues the Government Accountability Office and program inspector general have identified over the years.

“We concluded that the AbilityOne Program is a policy out of sync with modern national disability policy,” said NCD Chairman Neil Romano during a press briefing on Wednesday. “It generates sales to an 82-year-old work program that perpetuates segregation and has a long history of paying subminimum wage to people. A lot has changed since the program was created.”

The 1971 Javits-Wagner-O’Day Act, which established the current AbilityOne program, says that the nonprofits in the program must employ those who are blind or severely disabled in 75% of their direct labor hours every fiscal year. The law defines “direct labor” as “all work required for preparation, processing, and packing of a commodity, or work directly related to the performance of a service, but not supervision, administration, inspection or shipping.” NCD found that some individuals with disabilities are “trapped” in non-competitive positions and there aren’t incentives or opportunities for advancements. 

The 75% ratio “forecloses the possibility of what's known as ‘competitive integrated employment,’ which is the goal of modern disability employment policy” enshrined in the 2014 Workforce Innovation and Opportunity Act. Competitive integrated employment involves jobs that pay at least the federal minimum wage, occur in settings where those with and without disabilities work together and includes full and part-time work, said Romano. 

What’s more, Section 14(c) of the 1938 Fair Labor Standards Act allows employers to pay the subminimum wages for individuals with disabilities if they obtain a certificate from the Labor Department. While many nonprofits refuse to do this, some still do, said the council. 

Because Congress failed to reconcile the AbilityOne program with prior law following passage of WIOA, the program does not fulfill the desired standards of more recent legislation, said Romano. 

The report cited data showing that from fiscal 2016 to 2018, only about 3% of employees in the program were promoted each year; in fiscal 2019, only 4% of program participants left the program for work in a “competitive integrated environment.”

In a separate matter, the report cited that despite a $626 million increase in sales to the government from fiscal 2011 to 2018 (reaching a record high of $3.6 billion), the number of employees working in the program decreased from about 50,500 to 44,000, and the number of hours they worked decreased from about 49 million to 48 million hours. The council noted it didn’t study the specific reasons behind this, but said this correlation “raises questions about how the program should be evaluated.” 

Additionally, the council expressed concerns about transparency and communications in the program. 

The council “heard varying responses” from some participating nonprofits about the bid posting process and how the central nonprofits that operate much of the program don’t always make it clear how they review requests for proposals. “Specifically, the process was described as ‘random’ and ‘not clear,’” said the report. One nonprofit “expressed frustration about the lack of clarity about who reviews the contract bids” when there is a conflict with another nonprofit. 

As a result, the council recommended that Congress phase the program out over an eight year period and in its place, require the Labor Department’s Office of Federal Contract Compliance Program to mandate that federal contractors and subcontractors (those valued at $200,000 or more and that have at least 50 employees) hire a percentage of individuals who are blind or have significant disabilities. Congress should undertake a study to determine the appropriate percentage, the council recommended. 

AbilityOne told Government Executive that they are reviewing the report.