GAO rejects union’s privatization protest

The Government Accountability Office has rejected a protest filed by a labor union challenging an Air Force privatization effort that targets food service jobs held primarily by nonfederal employees.

The American Federation of Government Employees tried to block the Air Force from implementing a pilot program that would put a single contractor in charge of food service operations at six bases across the country.

Typically, if a federal agency wants to outsource work, it must conduct a competition to determine whether its employees or contractors can perform the work most efficiently and at the lowest cost to taxpayers. The union argued that a direct conversion of federal jobs was illegal based on rules in the 2003 revised OMB Circular A-76.

But in a Tuesday ruling, GAO attorneys determined those protections are not afforded to nonappropriated employees who are paid from the base's general operating funds rather than through congressional funding.

The OMB circular defines a Defense Department civilian employee as "an individual who works for a federal agency on an appointment without time limitation who is paid from appropriated funds, which includes working capital funds." A foreign national worker, temporary, term or nonappropriated fund employee, or uniformed personnel are not included in that definition, the circular said.

In her ruling, acting General Counsel Lynn Gibson said the "plain-language definition of 'civilian employee' " in the circular was clear.

The ruling could lead 300 low-wage cooks and bussers at base dining halls, bowling alleys, child care centers and golf courses to lose their jobs, said John Santry, president of AFGE Local 1764 in Northern California, who filed the protest. Many of those nonappropriated fund employees are veterans or military spouses, he said.

"We are hurting veterans and military families to maybe save a buck. No cost analysis has been done. I think our people deserve better than that," Santry said.

Santry is encouraging AFGE members to contact their legislative representatives to "close the loophole" that exempts nonappropriated fund employees from A-76 conversion protections. But, he conceded it will likely be too late to halt the food service initiative.

The Air Force, which was in the process of obtaining bids when AFGE filed its protest, is expected to resume its solicitation quickly and could award a contract before the end of the year. "We are proceeding with the Food Transformation Initiative, and still intend to have a contract in place by Oct. 1 that will provide improved food availability, quality and variety to our airmen while executing sound stewardship of our taxpayer dollars," said William Foran, director of Air Force NAF [Non Appropriated Fund] Purchasing.

The Air Force's proposed Food Transformation Initiative would put a contractor in charge of food and beverage service, preparation and cleanup at six bases: Elmendorf in Alaska; Travis in California; Patrick and MacDill in Florida; Fairchild in Washington state; and Little Rock in Arkansas. Displaced nonappropriated federal employees would be offered priority consideration in performing the work for the contractor, the Air Force said.

In a June 30 corrective action to its solicitation, the Air Force noted that no appropriated fund wage grade employees will be "displaced, reassigned, subjected to reduction in force, or otherwise adversely affected" by the contract. GAO found 18 wage grade employees could have been affected by the initiative.

Congress also has raised concerns about the food service program. Sen. Mark Begich, D-Alaska, secured language in the fiscal 2011 National Defense Authorization Act requesting that GAO study the Air Force pilot program before the service completely expanded it. Such an expansion would involve 4,000 federal jobs, the union said. The House has adopted similar language.

Begich has other concerns about how the initiative is being implemented. In a July 20 letter to Air Force Secretary Michael Donley, the senator wrote the privatization effort would unfairly exclude small, local food service businesses.

"The Air Force Service Agency's FTI is a clear continuation of a wasteful and inefficient contracting system," Begich wrote. "The exclusion of small businesses from contracting with the Air Force bases not only defies the [March 2009] presidential memorandum [on contracting], but it threatens family-supporting wages and benefits."