President's Column - The Continuing Looting of Katrina Victims

The poor and disenfranchised in Louisiana, Texas and other places hit by the double whammy of Hurricanes Katrina and Rita are now facing other problems. These problems are not a force of nature but the fact of anti-worker, pro-corporation, give to the big donors’ avarice. In places devastated by the hurricane and the accompanying debacle, President Bush placed another burden or two on their backs. First he announced that the construction work to recover and rebuild would be let usually to the same cast of construction cronies by a no-bid system and that they would be relieved from paying the prevailing wage rate under the Davis-Bacon Act.

In an area where unemployment is at an all time high and with no work to be found, the President proudly announced that the towns will be rebuilt and the “victims” would help in the process. Jobs for all! But at what price?

This reconstruction is federally funded and therefore under the federal “Prevailing Wage Rate”, but the President signed an Executive Order waiving that law. In addition, to pile on the downtrodden, the Office of Federal Contract Compliance Programs (OFFCCP) has waived any requirement for these “no-bid” contractors to have an affirmative action plan. Most of these contractors have had to be in compliance for other federally funded construction in the past, but waiving the requirement that mandates them to have fair hiring practices. To add insult to injury less than 10% of the work will be given to local contractors.

The irony is that the prevailing wage rate for the New Orleans area is around $9.00 per hour and similar around the rest of the stricken areas, which is barely over the poverty level at best. The continuing irony is that less than. A recent study by the Congressional Research Service says that suspension of Davis-Bacon Act wage rules would not necessarily ensure federal contracts hold reconstruction costs in this area. Conservatives and liberals in Congress have been pushing competing measure regarding this issue. Conservatives are pushing legislation that would automatically suspend the wage-protection law in areas designated by the president as disaster areas, while liberals are supporting several bills that would revoke Bush’s suspension of the law. In the Congressional Research Report poses the question,” Perhaps the most frequently asked question concerning the Davis-Bacon act is: would the federal government (and the taxpayer) save money if the Davis-Bacon Act were repealed or modified to narrow its scope? The short answer is: No one really knows. Conversely, might Davis Bacon result in savings to the federal government in its purchase of construction? That too, would seem to be an open question,”CRS argues in “Davis-Bacon Suspension and Its legislative Aftermath.”

According to CRS, drawing conclusions about the law’s effects on contracting costs is impossible because “the state of current research would probably be insufficient to justify just an assertion.”

But the more pointed question is why give contracts to “friends” without competitive bidding, and then to skimp on the wages paid to the workers? It would be much better to give the bulk of the work to the local contractors, make them pay at least the prevailing wage rate. The money would stay in the area and bolster the economy.

The best way for the Bush Administration to rebuild these areas would be to stop the looting of taxpayer dollars, provide the victims of the tragedy a way to help them get out of poverty with dignity and fair wages.

President's Column - Lessons Learned in Disaster

As we sit, our eyes glued to the television, unable to stop watching the human tragedy and suffering caused by Katrina , further complicated by the shear weight of incompetent bureaucracy , you can learn some valuable things about the federal government and federal employees. A short four years after the tragedy of 9-11, our country faces another enormous blow and one which may almost be impossible to survive.

What you can learn, once again, is about the indomitable spirit of the American people. But it is being sorely tested. The death toll is expected to be in thousands, one of the single most devastating death tolls in our nation's history. It could possibly be twice that of all our disasters both natural and war combined for a single incident or event. But the spirit came through, how people helped each other, when the bureaucracy failed. How thousands of people volunteered to go to those states that were hit, just to be left languishing until somebody made a decision. But they volunteered and they helped and they fought.

The spirit of the people in those ravaged areas who fought for life though the tears and the horror, just to be ignored, disenfranchised and left by those who were in charge. But they hung on and helped others. Despite the pictures of "looting" by the blacks and "finding food" for the whites in the same disaster area., the spirit of those people who did not have the means to escape but had the will to survive, and did survive until they were placed in areas of relief, that offered little or none.

Prominent among them were the federal employees who lost everything, some still not accounted for, whose homes and families may be lost. Among them are the hundreds of federal employees who immediately volunteered to go and help either as volunteer firefighters, EMTs, National Guardsman or just private citizens. It was not from the lack of volunteerism that help was late; it was because "somebody" had to make a decision. A decision that took almost 4 days to make… too little, too late!

And for those federal employees who went there because of their duty, it was evident that the delay was not because of any union contract or union work rule. The folks on top couldn't get together. The rationale for this Administration wanting to eliminate or severely curtail union contracts and civil service rights was it would delay any mobilization of federal workforce to face any disaster whether from terrorists or natural disaster. All of this has been delayed by the unions or the courts and so existing contracts are mostly still in effect. And it did not delay the mobilization for a second. Every federal employee, union or otherwise was available, prepared and anxious to go where it was necessary and it was as it always had been, the lack of leadership to make the decision.

Millions have been spent on Homeland Security since 9 11 and plans have been drawn, field exercises have been conducted, analyzed and re-analyzed and re-thought for the past four years... and the first time out of the chute, it failed... not from the lack of planning, not from the constrictions of union contracts but by the shear incompetence of the leadership.

While I could gloat and be content that this proved what our unions were trying to convey to the Congress and Administration was proven to be dead wrong, I can't. I am sickened by the devastation and the loss of lives.

I take little comfort in the fact that federal employees, as well as the thousands of other people were right and our "government" got it all wrong. People should not have had to pay with their lives and others with the loss of all they possess to prove a point that federal workers as well as all Americans will rise to the occasion and not let anything get in the way to help others and survive in spite of the incompetent bureaucracy.

President’s Column - It’s All a Matter of Priorities

The cost of federal contractors to accomplish the work of the government is astronomical. Some of the work is that which can not and should not be done by the government, but a lot of it is work that is currently being accomplished more efficiently and more effectively by federal employees. That is the end of my diatribe about contracting out for this article.

Federal Contractors are required to operate under the laws of the land, enforced by the various agencies of the U.S. Government. Agencies that regulate wages, overtime and safety laws, in addition these contractors have to pay all state, local and federal taxes and other fees that might apply. Some of the agencies are the Department of Labor’s Wage and Hour Division; OSHA, OFCCP, the Equal Opportunity Commission and Immigration. Non-compliance with these varied and many agencies should result in the loss of the federal contract. In fact, companies with these types of violations should not be given federal contracts until the issues are resolved.

Yet, many of the contractors are repeat violators of most of the federal, state and local laws and still secure lucrative federal contracts. Even if such “monitoring” is being accomplished for compliance, which is doubtful, it appears to be forgiven and the same violators secure contracts over and over.

A Government Accountability Office (GAO) report has uncovered that more than 33,000 civilian contractors, many of which continue to win new contracts from the federal government – owe more than $3.3 billion in back taxes.

The report, Financial Management: Thousands of Civilian Agency Contractors Abuse the Federal Tax System with Little Consequence (GAO-5-637), investigated 50 civilian agency contractors more closely and found that all of them had “abusive and potentially criminal activity “auditors stated. It reported that businesses failed to forward the payroll taxes they collected from their employees to the IRS, which is a felony.

In one case, a contractor repeatedly opened new business and closed old ones that carried large tax debts for more than 20 years. Federal agencies paid that contractor $1 million in fiscal 2004, despite the fact that he owed almost $9000, 000 in taxes. In another case, a waste collection agency that contracts with the Veteran Affairs Department owes almost $13 million in taxes and the owner has property worth more than $2 million.

GAO auditors said the Treasury Department’s Financial Management Service (FMS), which dispenses and collects money for the government---mismanaged data related to tax collection and in some cases was not even aware of problems until GAO pointed them out. In fiscal 2004, FMS paid $3.8 billion to contractors without recording their proper name, the report stated.

The report recommended withholding payments to contractors if their payment file lacks a proper name. FMS disagreed, saying that withholding might delay payments to contractors who are paying their taxes. The GAO report said that the fact that these contractors have not paid taxes reduces their operating costs, which gives them an unfair competitive advantage against those who are paying their taxes.

There are no statistics that show how many of these same contractors violate the provisions of the Department of Labor’s Service Contract Act, the Davis Bacon Act and other wage and safety laws. Little oversight is accomplished, unless an employee complaint is filed. Other federal agencies such as EEOC and OFCCP and ICE operate similarly. But it appears that laws are being broken or at least bent to the same advantage by these contractors.

DOL’s OFCCP is one of the agencies charged with checking out potential federal contractors for compliance with the discriminatory and immigration laws and do very little of that at present. All Department of Labor agencies are supposed to check for illegal immigrants while conducting their investigations. Checking the INS I-9s against the names on the payroll lists, but has not happened much of late.

With all of this fraud, waste, abuse, non-payment of over $3.3 billion in taxes and potential violations of safety regulations, wage laws, potential discrimination and illegal immigrants, the Administration has by an Executive Order, charged OFCCP to go out and check whether federal contractors have posted and explained the Beck Poster. This is the Poster based on a Court Decision letting employees know that unless the company is a union shop, there is no requirement to join a union.

See, it’s all a matter of priorities! Collecting taxes isn't as important that keeping the union out of the workplace!

President’s Column - Contracting Out Just Doesn't Make Sense or Save Dollars

When one looks at contracting out (outsourcing) in the federal government rationally it really makes no sense. It saves no money; in fact even in the best of times it has proven to be more costly and less efficient. As a recent GSA Audit conducted by the GSA Inspector General documented that the existing process misuse has lead to wide spread fraud, abuse and waste.

I have demonstrated regarding the cost of contacting out a GS-4 administrative position, costing the Department of Labor $21.95 per hour. The contract employee only received a little more than $8.00 per hour with no benefits. The Department of Labor still had to supervise the employee and provide the equipment that was utilized to provide the service. With that scenario DOL could have hired two GS-4s with benefits for less money than then the cost of the contract.

This process added nothing to the local economy, even if the "work" remained in the community. Without benefits, an underpaid contract employee might easily become a burden on the local economy. Uninsured or underinsured workers cost the taxpayer millions of dollars each year in the cost of providing public assistance and cost of health care coverage for those who are not insured.

Speaking briefly regarding the economic impact of contracting out to low-paying federal contractors, it is part of phenomenon that some like to call "Wal-Martizing." That is to keep wages low so that they are forced to shop at places like Wal-Mart and are forced to apply for public assistance becoming a drain on the taxpayer and on and on and on. It seems to be a reprise of the early 1900s to keep workers poor!

But back to the main theme of whether contracting our makes sense. No matter the logic you apply to the process, it comes up short. Politicians extol the virtues of less government, but if someone is being paid with taxpayer’s money, performing the work that government is mandated to do. That’s not smaller government it is just shifting the money to, in most cases, a large contractor who might or not might not perform as efficiently. But this has become the right wing mantra and the public buys into it. They have somehow convinced the faithful and others that outsourcing is a way to save taxpayers money and make government smaller. When in reality the cost to the government is larger and it is merely a money-making proposition for the federal contractors and the politicians who get the campaign support from them. The taxpayer is the only loser in the process.

But the thing that puzzles me most is that Congress wants to contract out the work. If they belief is that the laws passed or regulations enacted are wrong, or that government agencies do not operate efficiently and it imposes undue hardship of employers, why not change the law or eliminate the regulations. Having a contractor perform the work still imposes the same regulations on companies it just pays someone else more money to do it. It provides neither efficiency to the process nor or less imposition on the companies.

One of the issues pointed out GSA Audit is that the contractor who received the original contract under the GSA regulations had in some cases sub-contracted the work out to other contractors who were not part of the original bid and may not provide the same level of efficiency nor security. So if the General Service Administration Inspector General’s audit is correct, it has cost the taxpayers billions of dollars in waste, abuse and even worse outright fraud!