[Senate Hearing 109-360]
[From the U.S. Government Printing Office]



                                                        S. Hrg. 109-360
 
OPPORTUNITIES FOR TOO FEW? OVERSIGHT OF FEDERAL EMPLOYMENT PROGRAMS FOR 
                       PERSONS WITH DISABILITIES

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON

  EXAMINING FEDERAL EMPLOYMENT PROGRAMS FOR PERSONS WITH DISABILITIES

                               __________

                            October 20, 2005

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions


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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                   MICHAEL B. ENZI, Wyoming, Chairman

JUDD GREGG, New Hampshire            EDWARD M. KENNEDY, Massachusetts
BILL FRIST, Tennessee                CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
RICHARD BURR, North Carolina         BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia              JAMES M. JEFFORDS (I), Vermont
MIKE DeWINE, Ohio                    JEFF BINGAMAN, New Mexico
JOHN ENSIGN, Nevada                  PATTY MURRAY, Washington
ORRIN G. HATCH, Utah                 JACK REED, Rhode Island
JEFF SESSIONS, Alabama               HILLARY RODHAM CLINTON, New York
PAT ROBERTS, Kansas

               Katherine Brunett McGuire, Staff Director

      J. Michael Myers, Minority Staff Director and Chief Counsel

                                  (ii)

  




                            C O N T E N T S

                               __________

                               STATEMENTS

                       Thursday, October 20, 2005

                                                                   Page
Enzi, Hon. Michael B., Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Kennedy, Hon. Edward M., a U.S. Senator from the State of 
  Massachusetts, opening statement...............................     4
Nelson, Michael, former sheltered employee, current Hollywood 
  Video employee, Greeley, CO....................................     5
    Prepared statement...........................................     7
Bartlett, Kate, National Down Syndrome Society, Arlington, MA....     8
    Prepared statement...........................................     9
Lawhead, Robert, executive director, Employment Link, Boulder, CO    10
    Prepared statement...........................................    12
Gashel, James, executive director, strategic programs, National 
  Federation of the Blind, Baltimore, MD.........................    33
    Prepared statement...........................................    34
Young, Tony, director, Government Affairs and Workforce 
  Development, NISH, Vienna, VA..................................    45
    Prepared statement...........................................    47
Ensign, Hon. John, a U.S. Senator from the State of Nevada, 
  prepared statement.............................................    59

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Response to questions of Senator Enzi by Bob Lawhead.........    17
    Response to questions of Senator Enzi by James Gashel........    42
    Response to questions of Senator Enzi by Tony Young..........    56
    Questions of Senator Ensign for James Gashel.................    62
    Questions of Senator Ensign for Bob Lawhead..................    62
    Questions of Senator Ensign for Tony Young...................    62
    Jim Gibbons, National Industries for the Blind (NIB).........    83
    Colorado Developmental Disabilities Council (CDDC)...........    92
    American Council of the Blind (ACB)..........................    93
    Letter from American Congress of Community Supports and 
      Employment Services (ACCSES)...............................    96
    National Council of State Agencies for the Blind (NCSAB).....    98
    National Industries for the Severely Handicapped (NISH)......   102
    Letter from Virginia Association of Community Rehabilitation 
      Programs (VaAccses)........................................   104
    Richard Bird, Randolph-Sheppard Vendors of America (RSVA)....   106
    Letter from Randolph Sheppard Vendors of America.............   107
    American Rehab Action Network (ARAN).........................   108
    Letter from Booz Allen Hamilton, Inc.........................   109
    Robert R. Humphreys, Esq.....................................   111
    Steven B. Schwalb............................................   113
    Letter from Committee for Purchase From People...............   116

                                 (iii)

  

 
  OPPORTUNITIES FOR TOO FEW? OVERSIGHT OF FEDERAL EMPLOYMENT PROGRAMS 
                     FOR PERSONS WITH DISABILITIES

                              ----------                              


                       THURSDAY, OCTOBER 20, 2005

                                       U.S. Senate,
        Committee on Health, Education, Labor and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:05 p.m., in 
Room SD-106, Dirksen Senate Office Building, Hon. Mike Enzi 
(chairman of the committee) presiding.
    Present: Senators Enzi, Isakson, DeWine, Kennedy, Ensign, 
Dodd, and Harkin.

                   Opening Statement of Senator Enzi

    The Chairman. Let me go ahead and order this hearing. We do 
have a vote scheduled at 2:30, so I am going to go ahead and 
start. I have a statement that I will make. Senator Kennedy, 
the ranking member of the committee, will be here shortly. He 
will make his statement, and then we will get into the 
testimony and the questions.
    There is a nice crowd here today. I would like to thank 
everyone for their interest in this important oversight hearing 
today. Before we begin, I want to especially thank the ranking 
member, Senator Kennedy. He has shown tremendous support 
through our investigation of this matter.
    Senator Kennedy's longstanding interest and involvement in 
these issues is well-known and greatly appreciated. Senator 
Kennedy and I are in agreement that these well-intended Federal 
programs are long overdue for congressional oversight and 
review.
    I would like to thank the witnesses who will testify before 
us today for taking the time out of their schedules to be here. 
I know several of you have traveled long distances to be here, 
and we appreciate your efforts very much. I suspect that many 
in the audience today have traveled long distances too, and we 
appreciate you being here to listen to this testimony and the 
questions.
    The programs we will discuss today are critical to the 
lives of many individuals. I recognize there are strong and 
differing points of view about how these programs should be 
managed, and I am looking forward to the testimony we will 
receive about that. I know it will help the committee develop 
meaningful and effective solutions that will benefit the 
maximum number of people. In this regard, I am confident that 
everyone will be respectful of all points of view as we work 
through these issues.
    The purpose of this hearing is to examine the two main 
Federal programs intended to provide employment to persons with 
disabilities. The Randolph-Sheppard Act and the Javits-Wagner-
O'Day Act were enacted in the 1930's and revised in the 1970's. 
Since then, Congress has never conducted significant oversight 
to see whether these two laws are operating as Congress 
intended when they were passed and amended.
    Now, simply put, have they created more and better 
employment opportunities for the optimum number of persons with 
disabilities? It is fitting we should examine these issues 
today since Congress declared October to be National 
Disabilities Employment Awareness Month.
    Now, there are currently about 15 million unemployed 
persons with disabilities between the age of 16 and 64. By 
comparison, the Javits-Wagner-O'Day Act program creates only 
45,000 jobs for persons with disabilities. And the Randolph-
Sheppard program creates only 3,300 jobs for persons who are 
blind or otherwise disabled. I think it is clear we can do 
better than that.
    About 2,700 of the 3,300 persons employed by Randolph-
Sheppard are called licensed blind vendors. The law gives these 
2,700 licensed blind vendors training, support, and rights to 
certain Federal food service contracts. We see these job 
opportunities played out across the Nation in vending 
facilities on Government property everyday. We need to see more 
of these opportunities played out across the country.
    However, the current statutory scheme has produced two bad 
outcomes. First, the law has enabled a few of the approximately 
2,700 licensed blind vendors to capture large financial 
windfalls. According to the Department of Defense, 39 Randolph-
Sheppard vendors currently control military cafeteria contracts 
with approximate total value dollars of 1.2 billion. Second, 
the approximately 2,700 licensed blind vendors hire very few 
employees who are blind. Now, to fulfill many contracts, 
licensed blind vendors must hire employees, or subcontract to 
large companies that hire employees.
    The 2002 official report of the Department of Education, 
which administers Randolph-Sheppard at the Federal level, noted 
that the approximately 2,700 licensed, blind vendors, as a 
class, hired 7,122 employees. Only 337 of these employees were 
blind, and only 278 had some other disability; 6,507 had no 
disability at all. Now, that is less than 5 percent of the 
employees hired by the licensed blind vendors were blind. This 
is cause for concern in a program intended to create jobs for 
persons who are blind.
    Now, while I applaud the success of the small number of 
blind vendors, I am concerned that too few persons who are 
disabled are getting these jobs. Whereas Randolph-Sheppard 
provides opportunities only to persons who are legally blind, 
Javits-Wagner-O'Day, JWOD, targets persons with any severe 
disability and requires the Federal Government to make its 
purchases of certain listed goods and services from 
organizations, 75 percent of whose direct labor is performed by 
persons with any severe disability. JWOD creates strong 
incentives to hire and retain persons with disabilities, but 
JWOD also creates strong disincentives to help people with 
disabilities move out of JWOD into the supported or competitive 
employment.
    According to statistics from the Committee for Purchase 
from Persons Who are Blind or Severely Disabled, which sets 
JWOD program rules, only 5 percent of JWOD workers move into 
supported or competitive employment each year. While JWOD 
program jobs grew 22 percent from 2001 to 2004, the rate of 
placement out of the JWOD programs into supported or 
competitive employment fell 1 percent. We can do better than 
this by getting more workers into the employment mainstream.
    In addition, the JWOD Act does not restrict nonprofit CEOs 
from exploiting JWOD contracts to a self-deal, receive 
excessive compensations and often lavish perks. The national 
average salary for CEOs of 501(c)(3) nonprofit corporations, in 
general, is $91,400. The national average for a CEO of a 
sheltered, employment nonprofit, with an annual budget of 
between $10 million and $25 million is $126,701. By contrast, 
IRS 990 forms show that CEOs of similarly-sized and similarly-
situated JWOD nonprofits earn salaries of $715,000, $680,00, 
$594,000, and $369,000. One JWOD nonprofit paid its CEO zero 
salary, but paid his consulting firm $4.6 million.
    We are not talking about the additional millions of dollars 
the officers, directors and affiliates of these five nonprofits 
receive through self-dealing or in the form of lavish perks, 
such as lear jet travel. These details are available in the 
Majority Staff Report, copies of which are available at the 
press tables.
    Congress intended for the JWOD Act to benefit many persons 
with disabilities, not just a few nonprofit CEOs. This reminds 
me a little of the corporate greed and accountability issues 
that led us to pass the Sarbanes-Oxley Act, and I believe these 
five nonprofits represent the tip of the iceberg. Today's 
hearing will prompt us to consider why, when the Sarbanes-Oxley 
Act requires greater accountability of the public company CEOs, 
no similar law restricts JWOD nonprofit CEOs from abusing their 
positions.
    The purpose of this hearing is to help reveal and address 
such problems. The Randolph-Sheppard and the JWOD Acts should 
be heralded for the advances they have promoted for many 
Americans over the years; however, we can improve on these laws 
by creating more and better opportunities for more persons with 
disabilities. Toward that end, our first three witnesses will 
share their hopes for the future and their experiences moving 
out of the institutionalized employment settings into the 
competitive employment mainstream.

    Before recognizing Senator Kennedy for opening remarks, let 
me say a word about the witnesses who I will introduce 
momentarily.
    The committee did invite a representative of the Department 
of Education to testify at the hearing this afternoon; however, 
the Department declined to participate. I am greatly 
disappointed the Department is not represented today because I 
believe it is important that it be a part of any discussion 
about solutions to the matters at issue in this hearing.
    Now, let me turn to Senator Kennedy for his opening 
remarks.

                  Opening Statement of Senator Kennedy

    Senator Kennedy. Thank you very much, Mr. Chairman. I thank 
you for having this hearing. I am joined on our side by an old 
friend and someone who has made such a difference in including 
those that are physically and mentally challenged in our Nation 
to be a part of the American family, Tom Harkin, and I am glad 
to see our colleagues on your side as well attend this hearing 
because of its importance.
    Disabled Americans want to work and contribute to their 
communities the same way the nondisabled friends and families. 
They have dreams just like everyone else. For far too long we 
have been denied the talents and contributions of thousands of 
our fellow citizens just because they are disabled. So it is a 
sad day when our committee staff produces clear findings that 
indicate shameful and serious failures in many aspects of the 
employment programs for the disabled and flagrant abuses by 
certain contractors for personal gain.
    I am sure Secretary Spellings will be as shocked as we are 
by these depressing staff findings. These two, long-
established, Federal programs may be showing their age. They 
were designed for another era, and the newer landmark programs, 
like ADA and IDA, have joined the effort. But there is no 
excuse for the fraud and abuses that this investigation seems 
to have uncovered.
    The disabled beneficiaries of these two programs face 
enormous hardships even in the best of circumstance, and the 
last thing needed was to become victims of major incompetence, 
outright fraud, abuse and corruption with the Department of 
Education AWOL on what was happening. Even minimum responsible 
oversight would have smelled smoke and been alerted to the 
problem, so I hope these findings will finally sound the 
congressional alarm.
    As Senator Enzi has said, people with disabilities are 
unemployed at the unacceptable high rate of 70 percent, and 
when we passed the landmark Americans with Disabilities Act in 
1990, that was not the vision we had in mind. The act was about 
much more than curb cuts. It was about improving access to 
opportunities, especially jobs for people with disabilities.
    The ADA itself build on significant progress over the past 
4 decades. In the 1970s, we passed the Section 504, the 
Rehabilitation Act, to end discrimination in the schoolhouse 
and promote equal opportunities for people with disabilities. 
We build on this promise in 1975 by passing the IDA Act, and 
last year we reauthorized the important civil rights laws for 
6.5 million students with disabilities in their families, and 
we want them to have greater opportunities after they leave the 
schoolhouse, but in too many cases, they still do not. The 
promise of IDA and ADA and the powerful vision of lives in the 
community that developed out of the U.S. Supreme Court's 
Olmstead decision have failed to penetrate much of the modern 
workplace.
    The JWOD and Randolph-Sheppard programs were both created 
70 years ago under Franklin Roosevelt. At that time, they 
responded brilliantly to the realities of an era when 
workplaces were inaccessible and when having a disability 
carried a much greater stigma, and when a quality education was 
out of reach to most children with disabilities. That was 
before rehabilitation, before IDA, and before ADA.
    The evidence Senator Enzi laid out today makes a clear case 
for reform. Over the past 15 years, since enactment of the 
Americans Disability Act, real progress has taken place, and 
ADA has created a revolution in the way society views 
disabilities, and that revolution is continuing.
    If we believe in equality of opportunity and if we believe 
everyone has something to contribute, then any reform should 
provide a broad commitment to employ people with disabilities, 
based on their skills, not their disabilities. It should create 
entrepreneurs among the disabled and give them the skills and 
resource they need to operate successful business and employ 
others. It should give people with disabilities a real choice 
about where they work and what they do. These are issues of 
basic human dignity and basic human rights. And most of all, 
any program should make a genuine commitment to move more 
people with disability into job settings with nondisabled 
workers.
    We all know that there is a bipartisan willingness to 
tackle these issues in Congress and that the time is right for 
reform. I was proud to join recently with Senator Roberts on 
legislation that has the potential to employ 100,000 more 
people with disabilities. I think most of our committee members 
are part of that effort, and I look forward to hearing from our 
witnesses today and working with Senator Enzi, Senator Harkin, 
and many other leaders in the disability community and 
employers to move this debate forward. We can and must do 
better, and now is the time to do it I think.
    The Chairman. Thank you.
    In the tradition of the committee, statements from any 
members of the committee are accepted to be made a part of the 
record. We will get right into the testimony, particularly 
recognizing that we have a vote coming up.
    Our first witness today is Mr. Mike Nelson from Colorado. 
Mr. Nelson served in a sheltered workshop, but now works at 
Hollywood Video.
    Mr. Nelson, thank you very much for traveling so far to 
share your personal experience.

STATEMENT OF MICHAEL NELSON, FORMER SHELTERED EMPLOYEE, CURRENT 
             HOLLYWOOD VIDEO EMPLOYEE, GREELEY, CO

    Mr. Nelson. Thank you very much, Mr. Chairman, and welcome, 
Senator Kennedy.
    My document is 100 percent true, and I would like to read 
it to you; however, I may not be fast. Thank you for this 
invitation. I would like to share my story. My name is Mike 
Nelson. I live in Greeley, CO. I attended a segregated school 
for students with disabilities. I lived with my family, and 
moved out of our home in the late 1980s.
    I am proud of my independence, and I am too independent to 
be told what to do. I can handle most things on my own. People 
underestimate me because I use a scooter all the time. Clearly, 
I am very happy of my employment at Hollywood Video. I work 
10.5 hours a week.
    My first job was in 1976, and I was bussed to a segregated 
school in the morning and a sheltered workshop in the afternoon 
for about 15 years. The kind of work I did at the sheltered 
workshop was putting fish hooks in bags for Eagle Claw company, 
and with United Airlines, cleaning headphones, and computer 
fans for IBM, recyclable.
    I have seemed to lost my place here.
    The Chairman. You are doing just fine.
    Mr. Nelson. I moved into a real job. It was called prepaid 
employment. If often means why would you retire from a 
sheltered workshop job all your life? All of the pay for these 
jobs are by piece rate and not by hour. But at the beginning, I 
thought I was getting paid by the hour.
    People with disabilities do not get paid minimum wage. To 
clarify, there would be no pay ratio. None of my paychecks were 
the same amount every month. When we were paid by piece rate, 
my check was about $44 for about almost a month's work. It was 
not worth the transportation costs, staff time, or my time, and 
I was not being trained or anything.
    I moved to Greeley case managers under the D.D. system, 
which stands for Development of Disabilities. I had requested 
for 4 years at each meeting--a real job never came about is 
what I am trying to say. So sheltered workshop was the only way 
and all they could find for me. We had individual planning 
meetings for 4 years, and it was always the same. They said if 
you wanted to work, it had to be a sheltered workshop.
    I continued to request a real job, but nothing ever came 
about. I met some friends in leadership and public policy 
training, and they introduced me to a person at the University 
of Northern Colorado. I worked on a grant there making $7 an 
hour. Case managers kept saying I would fail on the job. 
Anyway, this is what they expected. The grant did run out, so I 
got lucky and hoped I would never hear another staff person 
recommend that I work in a sheltered workshop for the rest of 
my life.
    Now I work at Hollywood Video and enjoy meeting other 
workers, customers, and live in a neighborhood that pays better 
than the sheltered workshop. I get minimum wage. I could not be 
happier. If I have questions on the job, other people who work 
there and my supervisor treated me with respect like I want to 
be treated and with high expectations.
    I appreciate the time and hope that you make some huge 
changes in the way the system works. People with disabilities 
need decent wages and benefits. I would like to earn enough 
money so I would not have to depend on Medicaid and Social 
Security. Sorry if I read that backwards.
    I would like to disperse my copy of my story to you and 
hope you enjoy it.
    The Chairman. Thank you very much for your presentation, 
and the full text will be a part of the record of this 
committee hearing. We will have some questions later. Our next 
witness, Senator Kennedy will introduce.
    [The prepared statement of Mr. Nelson follows:]
                   Prepared Statement of Mike Nelson
    Mr. Chairman and members of the committee, hello and thank you for 
the invitation to share my story with the committee. My name is Mike 
Nelson and I live in Greeley, Colorado and attended a segregated school 
just for students with disabilities as I lived with my family. I moved 
out of our home in the late 80's when I was 27 years old. I am a very 
independent kind of a person and very proud of it. I'm too independent 
to be told what to do and can handle most situations on my own. People 
underestimate me all the time because I use this scooter to get around. 
Currently I am very happy to be employed at Hollywood Video for 10.5 
hours a week and earn $5.85 an hour.
    My first sheltered workshop job started around 1976 when I was 
bussed from a segregated school in the mornings to the workshop every 
afternoon. The school bus would pick me up at the workshop at the end 
of the day and take me back home too. I have worked about 15 years in 
one workshop or another. The kinds of work we did at the workshops 
included putting fish hooks in bags for Eagle Claw company, cleaning 
headphones for United Airlines, running heavy machinery to staple bags 
together, and putting together recycled computer fans for IBM. None of 
these jobs were really training for work in the community, but just 
wasted time. I thought I was supposed to get training to move from the 
workshop into a real job. It was called ``pre-vocational'' training, 
but the ``pre'' part often means never.
    Why would you want to retire from a sheltered workshop at 65 after 
preparing for a community job all your life?
    All of the pay for these jobs was piece rate, not by the hour, but 
at the beginning I thought I was being paid by the hour. Piece rate is 
allowed so that people with disabilities don't get paid minimum wage, 
but by the piece of work they perform. If IBM had to return a job to be 
corrected, there would not be any pay to redo the job. None of my 
paychecks were the same amount because we were paid piece rate. My 
check was about $44 for most months work. It was not worth the 
transportation costs, staff time, or my time. I was not being trained 
for anything.
    After I moved to Greeley, case managers from the D.D. system 
promised that I could get a community job as I had requested for 4 
years at each planning meeting. The job never came about, so they said 
that the sheltered workshop was always there and it was all they could 
find for me. We had an individual planning meeting each year that was 
always the same--They always said, ``If you want to work, it has to be 
the workshop.''
    I continued to request a real job, but nothing ever happened until 
I met some new friends in leadership training on public policy. The 
people there introduced me to a person at the University of Northern 
Colorado and I then worked on a grant there and earned $7.00 an hour. 
Case managers kept saying that I would fail at the job, that I would 
have to be at the workshop, and it would not last. Well, the grant did 
run out, but luckily I have found a job at Hollywood Video and hope to 
never hear another staff person question my skills or recommend that I 
work at the workshop the rest of my life.
    I now work at Hollywood Video and enjoy meeting other workers and 
customers who live in the neighborhood. The pay as well as the job is 
much better than any of the many workshops I spent time in. I get 
minimum wage and work for 10 hours a week and couldn't be happier with 
the job. If I have questions on the job, I get it from other people who 
work there. My supervisor treats me like I would expect to be treated 
at work--with respect and high expectations.
    I appreciate the time from your committee and hope that you are 
able to make some huge changes in the way the system works. People with 
disabilities need to be able to have real jobs with a decent wage and 
benefits. I would like to earn enough money to not depend on social 
security and Medicaid. I would like to distribute a copy of my story 
for all of you and hope you enjoy it. Thanks again.

    Senator Kennedy. Thank you, Mr. Chairman. It is a real, 
real pleasure to introduce Kate Bartlett, who is a 22-year-old 
young lady from Arlington, MA, and she is testifying on behalf 
of the National Down Syndrome Society. She graduated from high 
school at 18, passed the MCAS exam on her first try--that is a 
real achievement--and now attends Middlesex Community College.
    Last year, she attended Lesley College program for students 
with learning disabilities. She lived in a dorm in Cambridge, 
MA, went to class 3 days a week, and was an intern in an 
optical store in Harvard Square.
    She is now enrolled in Middlesex College, taking English 
class, voice class, and she loves to write. She works during 
the summers and vacations, doing administrative work, which she 
enjoys making friends, and she enjoys working.
    Kate feels strongly about having a good job of her own, 
talks about vocational aspirations and lifetime goals as a 
productive member of the workforce. She has won three swimming 
medals in Special Olympics. She has a bright future ahead of 
her, and she is a star. We are glad to have her.
    Thank you, Kate.

  STATEMENT OF KATE BARTLETT, NATIONAL DOWN SYNDROME SOCIETY, 
                         ARLINGTON, MA

    Ms. Bartlett. You are welcome.
    Thank you for inviting me here today. My name is Kate 
Bartlett. I am testifying today on behalf of the National Down 
Syndrome Society, which advocates to improve the lives of 
350,000 children and adults with Down syndrome and their 
families.
    I am a student at Middlesex Community College in Bedford, 
MA, and working on my associate's degree. I want what everyone 
wants. I want to be happy, have friends, and be able to live 
independently in the world.
    I grew up in Arlington, MA and attended regular education 
classes in our neighborhood schools. Growing up, I was a Girl 
Scout, played on soccer, basketball, and softball teams, sang 
in the chorus, and took dance classes in high school. The work 
got harder, but I took college prep classes, and because of 
that, I was able to pass the MCAS, and graduated with my class 
in 2004.
    In high school, I was on the swim team and got four varsity 
letters in swimming. I also was a co-captain in my senior year. 
I performed and traveled with the high school chorus. We went 
on great trips to Quebec, the Hudson River Valley, and 
Charleston, SC. I love to sing in the chorus and hope to join 
another one. I also work out at our local gym, and have since I 
was a freshman in high school.
    Last year I attended Lesley College's Threshold Program for 
students with learning disabilities. I lived in a dorm room in 
Cambridge, attended classes 3 days a week, and was an intern in 
Harvard Square optical store 2 days a week. Although I did well 
in classes and at work--the owner wanted to hire me last summer 
but I already had a job--there were roommate issues, and I left 
after one semester.
    In January, I enrolled at Middlesex Community College, and 
that is working great. Right now I am taking a six-credit 
English course and a voice class.
    I work during summers and school vacations. My jobs 
included an office support position in the benefits department 
of a Boston staffing company and a support associate at Macy's. 
In the office position I put together benefit packets, and I 
was responsible for labeling, copying, filing and shredding. I 
enjoy the office position and made some nice friends.
    I was fortunate to receive two scholarships from Arlington 
High and the National Down Syndrome Society's Joshua O'Neill 
and Zeshan Tabani Scholarship Fund. College is expensive; it is 
nice to have help.
    I am happy. As you can see, my life is pretty normal. I 
have a loving family, caring friends, and a life I enjoy. I am 
not sure what I want to do for a career in the future. I hope 
to figure that out in college. I know I want to have a career 
that I enjoy. I want to love going to work everyday and be 
great at whatever I choose to do. I want to continue making 
friends, participating in social and cultural activities, and 
live on my own again someday.
    Senator Kennedy. Very good. Thank you very, very much, 
Kate. Thank you very much.
    [Applause.]
    The Chairman. Thank you.
    [The prepared statement of Ms. Bartlett follows:]

                  Prepared Statement of Kate Bartlett

    Hello, my name is Kate Bartlett. I am testifying today on behalf of 
the National Down Syndrome Society, which advocates to improve the 
lives of 350,000 children and adults with Down syndrome and their 
families. I am a student at Middlesex Community College in Bedford 
Massachusetts and am working on my Associate Degree. I want what 
everyone wants. I want to be happy, have friends and be able to live 
independently in the world.
    I grew up in Arlington, Massachusetts and attended regular 
education classes in our neighborhood schools. Growing up, I was a girl 
scout, played on soccer, basketball and softball teams; sang in a 
chorus and took dance classes. In high school, the work got harder but 
I took college prep classes and because of that was able to pass the 
MCAS and graduate with my class in 2004. In high school, I was on the 
swim team and got four varsity letters in swimming. I was also a co-
captain in my senior year. I performed and traveled with the high 
school chorus. We went on great trips to Quebec, the Hudson River 
Valley, and Charleston, South Carolina. I loved singing in the chorus 
and hope to join another one. I also work out at our local gym and have 
since I was a freshman in high school.
    Last year I attended Lesley College's Threshold Program for 
students with learning disabilities. I lived in a dorm in Cambridge, 
attended class 3 days a week and was an intern in a Harvard Square 
optical store 2 days a week. Although I did well in classes and at work 
(the owner wanted to hire me last summer but I already had a job), 
there were roommate issues and I left after one semester. In January I 
enrolled at Middlesex Community College and that is working great. 
Right now I am taking a six credit English class and a voice class.
    I work during summers and school vacations. My jobs included an 
office support position in the benefits department of a Boston staffing 
company and a support associate at Macy's. In the office position I put 
together benefits packages and I was responsible for labeling, copying, 
filing and shredding. I enjoyed the office position and made some nice 
friends.
    I was fortunate to receive two scholarships from Arlington High and 
the National Down Syndrome Society's Joshua O'Neill and Zeshan Tabani 
Scholarship Fund. College is expensive, it's nice to have help.
    I am happy. As you can see my life is pretty normal. I have a 
loving family, caring friends and a life I enjoy. I am not sure what I 
want to do for a career in the future. I hope to figure that out in 
college. I know I want to have a career that I enjoy. I want to love 
going to work everyday and be great at whatever I choose to do. I want 
to continue making friends, participating in social and cultural 
activities, and live on my own again some day.

    The Chairman. Our next witness is Mr. Bob Lawhead, the 
executive director of Employment Link, which is a nonprofit 
organization in Colorado. Employment Link promotes integrated 
community employment.
    Mr. Lawhead, we really thank you for traveling so far and 
for being here today. Your testimony.

  STATEMENT OF ROBERT LAWHEAD, EXECUTIVE DIRECTOR, EMPLOYMENT 
                       LINK, BOULDER, CO

    Mr. Lawhead. Thank you, Mr. Chairman, members of the 
committee.
    Good afternoon. I am pleased to be here today to discuss 
the issue of pervasive segregation within Federally-funded 
employment programs for people with disabilities. My 9-year-old 
son, Jess, has Down syndrome. I hope my testimony will result 
in Jess and other young people with disabilities having 
regular, integrated jobs and careers when they grow up.
    My career, providing employment services to people with 
severe disabilities, has spanned 3 decades. Between 1976 and 
1996, I managed sheltered workshop programs in both Ohio and 
Colorado. Over the past 10 years, I have served as executive 
director of an employment agency which works with businesses 
throughout the Denver metro area to employ people with severe 
disabilities.
    Sheltered employment refers to a wide range of segregated 
programs, including sheltered workshops, adult activity 
centers, work activity centers, and day treatment centers. 
These kinds of programs have expanded over the last few decades 
because it was previously assumed that employers would not hire 
people with severe disabilities without intensive pre-
employment training.
    Sheltered workshops congregate and segregate people within 
production and/or warehouse-like facilities to complete 
subcontract work. Pay is typically based on a piece rate, which 
allows for low compensation, far below the Federal minimum 
wage.
    When the U.S. Department of Labor, DOL, studied children 
workshops, it was found that these programs did little to 
assist people in learning the skills needed for placement into 
real work. In fact, this data showed that a person entering the 
sheltered workshop upon high school graduation would get their 
first job at age 65 or later. It is estimated that more than 1 
million people with severe disabilities languish in these kind 
of segregated day services in the U.S. today.
    In the late 1970s and early 1980s, professionals developed 
a process for employing people with very significant 
disabilities within the regular workforce. This process has 
been refined over the past 25 years and is referred to as 
supported employment, which is defined as ``integrated paid 
work within business and industry, with ongoing support.''
    Presently, it is estimated that nearly 200,000 people with 
severe disabilities are employed within our business 
communities through supported employment and similar strategies 
such as supported self-employment and customized employment. 
There is a significant body of evidence supporting the enhanced 
benefit to people with disabilities of these efforts, including 
increased compensation, social inclusion, marketable work 
skills, and the dignity that comes from being a contributing 
member of their community.
    This is especially true for individual job placement as 
opposed to congregate group placements. Research has also shown 
that people with severe disabilities prefer community 
employment to segregation in the workplace. People with 
disabilities and their families are often told by well-meaning 
professionals that sheltered employment is the best or only 
option open to them. This is simply not true.
    Evidence-based research, completed over the last 25 years, 
shows that employment programs placing people into business and 
industry represent a good taxpayer investment. When one public 
dollar is spent on supported employment service costs, 
taxpayers earn more than a dollar in benefits through increased 
taxes paid, decreased Government subsidies, and foregone 
program costs. Further, this positive cost benefit relationship 
for community employment holds true for people with the most 
significant disabilities, and is stronger when people are 
employed individually as opposed to within group models of 
employment. On the other hand, segregated employment does not 
use public dollars efficiently, always running at a deficit 
year after year.
    Over the past 15 years I have assisted agencies serving 
urban and rural areas within approximately 20 States to convert 
their services from segregated, sheltered, employment programs 
to programs providing community employment outcomes. It is 
currently estimated that 275 agencies around the United States 
have changed their missions and are engaged in changeover 
efforts, with as many as 15 percent of them completing this 
activity.
    It is my experience that once an agency begins this process 
to change it does not decide to go back to the segregated 
employment model because the people they serve experience a 
better quality of life, and those people and their families 
express higher levels of satisfaction with the service. The 
changeover process and successful examples of agency conversion 
are well-documented within the professional literature.
    In summary, we know how to assist people with disabilities 
to achieve individualized job outcomes within the business 
community. People with disabilities clearly prefer to work 
alongside nondisabled co-workers when given choice and 
individualized support. When public dollars are used for 
employment programs that place one person at a time within 
local businesses, those dollars are used more cost effectively 
than with the dominant, segregated program model. And, yet, it 
has been very difficult to break the hold congregate programs 
have on public funding.
    We know in 1999 that 75 percent of the public funding 
available for ongoing employment support was used instead for 
segregated programs. There is little evidence that this trend 
is changing, and this fact leaves very few resources available 
for individualized, integrated employment options. Federal law, 
Federal policy, and the present administration support 
integrated employment, and we now have experience in changing 
the current service system, agency by agency and State by 
State. We exist at a time when Federal policy could be 
implemented to correct the national shame of our ongoing 
segregation of workers who experience a severe disability.
    Mr. Chairman, I commend this committee for exploring these 
issues, and thank you for the opportunity to share my 
perspectives with you today. I hope your leadership will result 
in real change, due to the large number of individuals who have 
been waiting for far too long to take their place in the 
workforce.
    The Chairman. Thank you very much for your testimony.
    [The prepared statement of Mr. Lawhead follows:]

             Prepared Statement of Robert A. Lawhead, M.A.

    Mr. Chairman and members of the committee, good afternoon. I am 
pleased to be here today to discuss the issue of pervasive segregation 
within federally-funded employment programs for people with 
disabilities. My 9-year-old son, Jess, has Down syndrome. I hope my 
testimony will result in Jess and other young people with disabilities 
having regular, integrated jobs when they grow up. My career providing 
employment services to people with severe disabilities has spanned 3 
decades. Between 1976 and 1996 I managed sheltered workshop programs in 
both Ohio and Colorado. Over the past 10 years I have served as 
Executive Director of an employment agency which works with businesses 
throughout the Denver metro area to employ people with severe 
disabilities.
    Sheltered employment refers to a range of segregated programs 
including sheltered workshops, adult activity centers, work activity 
centers, and day treatment centers (Kregel & Dean). These kinds of 
programs have expanded over the last few decades because it was 
previously assumed that employers would not hire people with severe 
disabilities without intensive pre-employment training. Sheltered 
workshops congregate and segregate people within production and/or 
warehouse-like facilities to complete sub-contract work. Pay is 
typically based on a piece rate which allows for low compensation, far 
below the Federal minimum wage. When the U.S. Department of Labor (DOL) 
studied sheltered workshops it was found that these programs did little 
to assist people in learning the skills needed for placement into real 
work. In fact, this data showed that a person entering a sheltered 
workshop upon high school graduation would get their first job at age 
65 or later. It is estimated that more than 1 million people with 
severe disabilities languish in these kinds of segregated day services 
in the U.S. today.
    In the late seventies and early eighties, professionals developed a 
process for employing people with very significant disabilities within 
the regular workforce. This process has been refined over the past 25 
years and is referred to as ``supported employment'' which is defined 
as integrated paid work, within businesses and industry, with ongoing 
support. Presently it is estimated that nearly 200,000 people with 
severe disabilities are employed within our business communities 
through supported employment and similar strategies such as supported 
self-employment and customized employment. There is a significant body 
of evidence supporting the enhanced benefit to people with disabilities 
of these efforts, including increased compensation, social inclusion, 
marketable work skills, and the dignity that comes from being a 
contributing community member (Bellemy, 1988; Bellamy, Rhodes, 
Bourbeau, & Mank, 1986; Kregel & Dean, 2003; Kregel & Wehman, 1997; 
Mcgloughlin, Garner, Callahan, 1987; Moon, Inge, Wehman, Brooke & 
Barcus, 1990; Murphy S. & Rogan, 1995; Shapiro, 1993; Wehman, 1981; 
Wehman, 1988). This is especially true for individual job placement, as 
opposed to congregate group placements. Research has also shown that 
people with severe disabilities prefer community employment to 
segregation in the workplace (Coker, Osgood & Clouse, 1995; Lawhead, 
1996; Test, Hinson, Solow, & Kuel, 1993; Shapiro, 1993; Wilson, 2003). 
People with disabilities and their families are often told by well-
meaning professionals that sheltered employment is the best or only 
option open to them. This is simply not true.
    Evidence-based research completed over the last 25 years shows that 
employment programs placing people into business and industry represent 
a good tax-payer investment (Cimera, 2002; Cimera, 2001; Cimera, 2000-
2001; Cimera, 2000-2002; Cimera, 1998; Kregel, Wehman, Revell, Hill, & 
Cimera, 2000). When one public dollar is spent on supported employment 
service costs, tax-payers earn more than a dollar in benefits through 
increased taxes paid, decreased Government subsidies, and foregone 
program costs. Further, this positive cost-benefit relationship for 
community employment holds true for people with the most significant 
disabilities and is stronger when people are employed individually as 
opposed to within group models of employment. On the other hand, 
segregated employment does not use public dollars efficiently, always 
running at a deficit year after year.
    Over the past 15 years I have assisted agencies serving urban and 
rural areas within approximately 20 States to convert their services 
from segregated sheltered employment programs to programs providing 
community employment outcomes. It is currently estimated that 275 
agencies around the United States have changed their missions and are 
engaged in change-over efforts, with as many as 15 percent of them 
completing this activity. It is my experience that once an agency 
begins this process to change it does not decide to go back to the 
segregated employment model because the people they serve experience a 
better quality of life and those people and their families express 
higher levels of satisfaction with the service. The change-over process 
and successful examples of agency conversion are well documented within 
the professional literature (Albin, Rhodes, & Mank, 1994; Butterworth & 
Fesko, 1998; Butterworth, Sullivan, & Smith, 2001; DiLeo & Hagner, 
1990; DiLeo & Rogan, 1999; Dufresne & Laux, 1994; Fesko & Butterworth 
2001; Lawhead, 1996; Marrone, Hoff & Gold, 2000; Murphy, Rogan, Hanley, 
Kincaid & Royce-Davis, 2002; Murphy, S. & Rogan, 1995; Novak, Rogan, 
Mank, & DiLeo, 2003; Parent & Hill, 1990; Petty, Brickey, Verstegen, & 
Rutherford, 1999; Rogan, 2005; Rogan, Held, & Rinne, 2001; Rogan, 
Novak, Mank & Martin, 2002).
    Recent Federal law and initiatives have clearly supported that 
people with disabilities have a right to be employed in integrated 
settings. The Supreme Court's 1999 Olmstead Ruling clarified this 
mandate that has been variously expressed by the Americans with 
Disabilities Act of 1990 (PL 101-336), the Workforce Investment Act of 
1998 (PL 105-220), the Ticket to Work and Work Incentive Improvement 
Act of 1999 (PL 106-170). The Olmstead ruling affirmed that publicly-
funded services must utilize the most integrated setting possible. This 
direction was further supported in 2001 when the Rehabilitation 
Services Administration (within the U.S. Office of Special Education 
and Rehabilitation Services, OSERS) decided to no longer allow 
sheltered workshop employment to be considered a successful employment 
outcome by State Vocational Rehabilitation Programs (Federal Register, 
January 22, 2001, p.7254) President Bush's New Freedom Initiative: 
Community Based Alternatives for Individuals with Disabilities, 
Executive Order 13217 issued in 2001, has identified community 
integration as the goal of Federal policy within all aspects of life, 
including employment.

        ``By the authority vested in me as President by the 
        Constitution and the laws of the United States of America, and 
        in order to place qualified individuals with disabilities in 
        community settings whenever appropriate, it is hereby ordered 
        as follows: The Federal Government must assist States and 
        localities to implement swiftly the Olmstead decision, so as to 
        help ensure that all Americans have the opportunity to live 
        close to their families and friends, to live more 
        independently, to engage in productive employment, and to 
        participate in community life.''

            President George W. Bush, Executive Order 13217.

    Our lack of progress toward this goal for people with severe 
disabilities was documented in the DOL report, Delivering on the 
Promise in 2003, which states:

        ``People with the most significant disabilities continue to be 
        viewed as unable to contribute and are instead relegated to 
        dependency on Government programs and isolated from their 
        communities. This view is pervasive despite multiple innovative 
        demonstrations and model programs documenting that people with 
        significant disabilities can work and can contribute to the 
        fabric of community life.'' (p. II-1); and

        ``Decades of research, demonstration projects, and other 
        private and public activities, are challenging and changing the 
        stereotypes that the only options for individuals with 
        significant disabilities are segregated or non-work status. 
        There are many successful and promising strategies for securing 
        integrated competitive employment: supported employment and 
        entrepreneurship; individualized job development; job 
        ``carving'' and restructuring . . .'' (p. I-1).

    The DOL's Office of Disability Employment Policy in July, 2005, 
published a detailed brochure describing the concept of ``customized 
employment,'' which has been characterized as providing strategies to 
employ people with the most severe disabilities within the Nation's 
competitive businesses and industries. Customized employment means 
individualizing the relationship between job seekers and employers in 
ways that meet the needs of both. It is based upon an individualized 
determination of the strengths, requirements, and interests of a person 
with a complex life. The process is designed to meet the workplace 
needs of the employer, and the discrete tasks of the position. When a 
customized relationship is developed, a shared employment alliance 
results (Office of Disability Employment Policy, U.S. Department of 
Labor Web site). Please find actual examples of this process within the 
Appendix A and find additional information on customized employment at: 
http://www.dol.gov/odep/pubs/custom/index.htm.
    In summary, we know how to assist people with disabilities to 
achieve individualized job outcomes within the business community. 
People with disabilities clearly prefer to work alongside non-disabled 
co-workers when given choice and individualized support. When public 
dollars are used for employment programs that place one person at a 
time within local businesses, those dollars are used more cost 
effectively then with the dominant segregated program model. And yet, 
it has been very difficult to break the hold congregate programs have 
on public funding. We know in 1999 that 75 percent of the public 
funding available for on-going employment supports was used instead for 
segregated programs. There is little evidence that this trend is 
changing, and this fact leaves very few resources available for 
individualized integrated employment options. Federal law, Federal 
policy and the present administration support integrated employment and 
we now have experience in changing the current service system, agency-
by-agency and state-by-state. We exist at a time when Federal policy 
could be implemented to correct the national shame of our ongoing 
segregation of workers who experience a severe disability.
    Mr. Chairman, I commend this committee for exploring these issues 
and thank you for the opportunity to share my perspectives with you 
today. I hope your leadership will result in real change due to the 
large number of individuals who have been waiting for far too long to 
take their place in the workforce.

References

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Bellemy, G.T. (1988). Supported employment. In G. T. Bellamy, L. 
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Appendix A: Description of Current Best-Practice Supported Employment 
        Services
    Employment Link and other community employment agencies utilize 
five steps* when developing and maintaining job placements for a job-
seeker through supported employment services. The term supported 
employment refers to paid employment in integrated settings (with 
regular opportunities for social interaction with nondisabled co-
workers), within private businesses and public agencies with ongoing, 
non-time-limited support.
    Initially, an assessment, referred to as a personal profile, is 
conducted by an employment consultant. This personal profile is 
intended to gather information about the job seeker such as his/her 
interests, hobbies, educational experience, previous work experience, 
skills, abilities, task preferences, typical daily schedule, typical 
responses to various community settings and needed accommodations. This 
``discovery process'' provides insight about potential directions that 
job development may take.
    The next step occurs as an employment consultant hosts an 
employment-planning meeting for the job-seeker, his/her family & 
friends, and other service providers supporting the job seeker. At the 
employment-planning meeting, the team discusses major work 
contributions of the job-seeker, work preferences for the job-seeker, 
job conditions necessary for the job-seeker's employment success, and 
tasks the job-seeker enjoys and has competence in or likely can develop 
competence in. At the end of the meeting, the team lists potential 
employers who may need the identified tasks performed, and who are 
within the same locality of the job seeker's home so the issue of work 
transportation is minimized. These employers are targeted for initial 
contact.
    Within the third step, the employment consultant engages in job 
development/career development services. The employment consultant 
works with the job-seeker to contact and meet potential employers, fill 
out job applications, and job shadow current employees until a 
successful job match has been found or created. Job creation/job 
carving is utilized when an employer in the community has an existing 
job opening (or a number of job openings) and the job-seeker's skills 
and desires does not match that (those) position(s). This strategy may 
also be utilized when no job opening exists, but when an employer has 
an unmet need that can be identified. Job developers, the job-seeker, 
and the family and friends work together to identify work tasks and 
characteristics that match the abilities and preferences of the job-
seeker and that will fall within an employer's employment needs. For 
instance, specific job duties within the position description such as 
``must understand technical manuals'' or ``must drive an automobile for 
deliveries,'' may not match the abilities of the job-seeker. 
Negotiation occurs with the employer to ``carve out'' those job duties 
from the position description so that the position better matches the 
Served Person. At times an entirely new position may be created when 
duties from a variety of positions and/or previously unidentified 
employer needs are combined to create a new position. Job creation and 
job carving activities often improve cost efficiencies for the employer 
by creating a new, perhaps less technical position, that would be 
compensated at a rate of pay commensurate with that positions 
contribution to the employer's business activity. These activities are 
sometimes referred to as job customization.
    Self-employment may be utilized when a job-seeker may have more 
significant disabilities and has a passion for a particular vocation. 
For example, with the assistance of the federally-created State 
Vocational Rehabilitation Program, one job-seeker purchased a 
cappuccino machine and had it installed within the break and lunch room 
of a large community college. Although the individual had total 
paralysis and severely limited communication abilities, he was able to 
sit by his machine while his customers operated the machine and made 
their own change. This allowed that individual to integrate socially 
with his customers while monitoring his business. Revenues from 
customers paid the individual and additionally defrayed the costs of 
supplies and machine maintenance.
    A variety of other job development and accommodation strategies 
that have not been fully previously described include: negotiated 
duties, negotiated job procedures, negotiated daily hours, negotiated 
weekly schedule, negotiated rate of work, ``high technology'' (computer 
assisted communication devices, for instance), ``low technology'' 
(raising the level of a desk so a wheel chair user can use the surface, 
for instance), transportation assistance, personal care attendants, 
coworker as mentor, demonstrated instructions as opposed to written 
instructions, picture cue booklets instead of written schedules, 
programmable PDAs, highly personalized job development, reminder alarm 
watches, job coaches in a variety of roles, and a variety of others. 
Individuals who previously may have only been served within segregated 
settings are thus able to take advantage of individualized, integrated 
employment within their community.
    As a fourth step, the employment consultant provides ``job 
stabilization'' services. ``Job stabilization'' is the process by which 
an employment consultant assists the employer and the new employee with 
orientation, job accommodations, initial job training strategies and 
coworker relationship development. The employment consultant works to 
involve the employer and other employees in the orientation and 
training process as much as possible with the employment consultant 
assisting only when needed. The goal of job stabilization services is 
to build upon the natural supports (the same support that any co-worker 
has access to within a team-based work environment, thus the term 
``natural'') between the new employee and his/her employer and co-
workers. While the employment consultant may provide some initial 
support for the new employee, the new employee's co-workers/manager 
should be directly assisting the new employee with learning the job and 
dealing with job-related questions/concerns as orientation and training 
progresses. Initial support provided by the employment consultant to 
the employer may include understanding how to communicate with the new 
employee and developing specific training techniques effective for 
teaching job duties. Over time, and as the new employee learns the job 
and becomes more comfortable with that job, the employer, and the work 
environment, the time spent by the employment consultant within the 
work environment decreases to a more or less stable minimum.
    The final step in the community employment process is referred to 
as ``follow along'' services during which the employment consultant 
periodically monitors the supported employee's progress and provides 
employment intervention on an as needed basis. During the ``follow-
along'' stage, the employment consultant checks in with the supported 
employee and the employer no less than monthly to answer questions or 
assist with issues and concerns. The level and type of supports 
provided is customized to fit the needs of that particular employee and 
employer. The employment consultant continues to provide on-going 
support for the duration of the supported employee's employment, 
however the goal is for the employee to utilize his/her co-workers for 
day-to-day support.
    *The five step process described here is consistent with the 
process that is considered state-of-the-art by leaders in the field of 
community employment for people with significant disabilities. Much of 
the above content is based on the techniques described by Marc Gold & 
Associates (MG&A), although MG&A personnel have not reviewed nor 
approved the above description.

          Response to Questions of Senator Enzi by Bob Lawhead

    Question 1. In your testimony you stated that there is a 
significant body of evidence supporting the enhanced benefit to people 
with disabilities working in integrated environments. What details can 
you provide about such research?
    Answer 1. References pertaining to the enhanced benefits to people 
with disabilities working in integrated environments:

Bellemy, G.T. (1988). Supported employment. In G. T. Bellamy, L. 
        Rhodes, D. Mank and J. Albin (Eds.) Supported employment: A 
        community implementation guide (pp.1-18). Baltimore: Paul H. 
        Brookes Publishing.
Bellamy, G. T., Rhodes, L., Bourbeau, P., & Mank, D. (1986). Mental 
        retardation services in sheltered workshops and day activity 
        programs: Consumer benefits and policy alternatives. In F. 
        Rusch (Ed.), Competitive employment issues and strategies 
        (pp.257-271). Baltimore: Paul H. Brookes Publishing Company.
Butterworth, J. & Fesko, S. (1998). Conversion to integrated 
        employment: Case studies of organizational change. Boston: 
        Institute for Community Inclusion.
Butterworth, J., Sullivan, J. & Smith, C. (2001). The impact of 
        organizational change on individual outcomes: Transition from 
        facility-based services to integrated employment. Boston, MA: 
        University of Massachusetts, Institute for Community Inclusion. 
        Manuscript prepared for the President's Task Force on 
        Employment of Adults with Disabilities.
Coker, C., Osgood, K., & Clouse, K. (1995). A comparison of job 
        satisfaction and economic benefits of four different employment 
        models for persons with disabilities. Menomie, WI: 
        Rehabilitation Research and Training Center on Improving 
        Community-Based Rehabilitation Programs, University of 
        Wisconsin.
DiLeo, D. & Rogan, P. (1999). Toward integrated employment for all: 
        APSE's position statement on segregated services for people 
        with disabilities. The Advance, 10(1), 1-2.
Dufresne, D. & Laux, B. (1994). From facilities to supports: The 
        changing organization. In V.J. Bradley, J.W. Ashbaugh, & B.C. 
        Blaney (Eds.), Creating individual supports for people with 
        developmental disabilities: A mandate for change at many levels 
        (pp. 271-280). Baltimore: Brookes.
Kregel, J., & Dean, D. (2002). Sheltered vs. supported employment: A 
        direct comparison of long-term earnings outcomes for 
        individuals with cognitive disabilities. In Achievements and 
        challenges in employment services for people with disabilities: 
        The longitudinal impact of workplace supports. Richmond, VA: 
        Rehabilitation Research and Training Center on Workplace 
        Supports and Job Retention, Virginia Commonwealth University.
Kregel, J., & Wehman, P. (1997). Supported employment: A decade of 
        employment outcomes for individuals with significant 
        disabilities. In W.E. Kiernan & R.L. Schalock (Eds.), 
        Integrated employment: Current status and future directions. 
        (pp. 31-48). Washington DC: American Association on Mental 
        retardation.
Lawhead, R. (1996). Program conversion: From segregated, sheltered 
        workshops to supported employment services. Richmond, VA: 
        Association for Persons in Supported Employment.
McGaughey, M., Kiernan, W., McNally, L., Gilmore, D. & Keith, G. 
        (1995). Beyond the workshop: National trends in integrated and 
        segregated day and employment services. Journal of The 
        Association for Persons with Severe Handicaps, 20(4), 270-285.
Mcloughlin, C., Garner, J., & Callahan, M. (1987). Sheltered work 
        environments: A dinosaur in our midst? In Getting employed, 
        staying employed. Baltimore: Paul H. Brookes Publishing Co.
Moon, M.S., Inge, K., Wehman, P., Brooke, V. & Barcus, J.M. (1990) 
        Helping persons with severe mental retardation get and keep 
        employment. Baltimore: Paul H. Brookes.
Murphy, S., Rogan, P., Hanley, M., Kincaid, C., & Royce-Davis, J. 
        (2002). People's situations and perspectives 8 years after 
        workshop conversion. Mental Retardation, 40(1), 30-40.
Murphy, S. & Rogan, P. (1995). Closing the shop: Conversion from 
        sheltered to integrated work. Baltimore: Paul Brookes 
        Publishing Co.
Novak, J., Rogan, P., Mank, D., & DiLeo, D. (2003). Supported 
        employment and systems change: Findings from a national survey 
        of State Vocational Rehabilitation agencies. Journal of 
        Vocational Rehabilitation, 19 (3), 157-166.
Shapiro, J. P. (1993). No pity: People with disabilities forging a new 
        civil rights movement (pp.249-250). New York: Random House.
Test, D., Hinson, K., Solow, J., Kuel, P. (1993). Job satisfaction of 
        persons in supported employment. Education & Training in Mental 
        Retardation, 27 (1), 57-68.
Wilson, L. (2003) Survey of the employment needs and goals of 
        individuals with developmental disabilities. Tallahasee: 
        Florida Developmental Disabilities Planning Council.
Wehman, P. (1981). Competitive employment: new horizons for severely 
        disabled individuals. Baltimore: Paul H. Brookes Publishing 
        Company.
Wehman, P. (1988). Supported employment: toward zero exclusion of 
        persons with severe disabilities. In P. Wehman and M.S. Moon 
        (Eds.) Vocational rehabilitation and supported employment 
        (pp.3-16). Baltimore: Paul H. Brookes.

    Question 2. You also stated that evidence-based research show that 
employment programs placing people into business and industry represent 
a good taxpayer investment. What details can you provide about such 
research?
    Answer 2. References supporting that employment programs placing 
people into business and industry represent a good tax-payer 
investment:

Cimera, R.E. (2002). The monetary benefits and costs of hiring 
        supported employees: A primer. Journal of Vocational 
        Rehabilitation, 17, 23-32.
Cimera, R.E. (2001). Utilizing coworkers as ``natural supports'': 
        Evidence on cost-efficiency, job retention, and other 
        employment outcomes. Journal of Disability Policy Studies, 11, 
        194-201.
Cimera, R.E. (2000). Improving the cost efficiency of supported 
        employment programs. Journal of Disability Policy Studies, 11, 
        145-151.
Cimera, R.E. (2000). The cost-efficiency of supported employment 
        programs: A literature review. Journal of Vocational 
        Rehabilitation, 14, 51-61.
Cimera, R.E. (1998). Are individuals with severe mental retardation and 
        multiple disabilities cost-efficient to serve via supported 
        employment programs? Mental Retardation, 36, 280-292.
Kregel, J., Wehman, P., Revell, G., Hill, J., & Cimera, R. (2000). 
        Supported employment benefit-cost analysis: Preliminary 
        findings. Journal of Vocational Rehabilitation, 14(3), 153-161.

    Question 3. Additionally, you have a wealth of experience 
converting sheltered workshops into supportive employment and other 
integrated employment environments. Additionally, in your testimony you 
stated that a non-profit's philosophy and mission must change in order 
for a conversion to take place. After an organization has decided that 
it would like to provide its employees with integrated work 
experiences, what are the steps that a non-profit has to make in order 
for this to come to fruition?
    Answer 3.

 PROGRAM CONVERSION: FROM SEGREGATED, SHELTERED WORKSHOPS TO SUPPORTED 
                          EMPLOYMENT SERVICES



       CONVERSION FROM SHELTERED TO SUPPORTED EMPLOYMENT SERVICES

                              INTRODUCTION

Conversion: The Customer Service Solution

    In the field of vocational rehabilitation, just as in the broader 
corporate sector, leaders search for philosophical constructs that 
provide a framework for interpreting the rapidly changing conditions 
that seem to swirl around them. It is important to bring some sense of 
stability to organizations facing the challenge of doing business in 
significantly different ways. Presently, an increasing number of 
sheltered workshops are considering converting their vocational 
services to supported employment. Change in employment service 
configuration is being called for as a result of the superiority of 
integrated employment over the traditional sheltered workshop model 
(The Association for Persons with Severe Handicaps, 1991; Bellamy, 
Rhodes, Mank, & Albin, 1988; Mcloughlin, Garner & Callahan, 1987; 
Murphy & Rogan, 1995; Wehman, 1981; Wehman & Kregel, 1994; Whitehead, 
1979). The identification of a guiding principle for the implementation 
of such significant organizational change would be useful. One of the 
most salient philosophical characteristics of organizational entities 
that respond successfully to change is a commitment to customer service 
(Peters, 1987).

        In today's business environment, more than in any preceding 
        era, the only constant is change. (Waterman, 1987, p.100)

    Conversion from sheltered work to the provision of supported 
employment services is one of the most difficult changes a vocational 
rehabilitation agency will face. We feel that a focus on customer 
service can bring considerable clarity to tactical and strategic 
decisionmaking as agencies move through the conversion process. The 
most important customer for any service agency are the people it 
serves. People with disabilities are speaking out with increasing 
clarity that they will no longer tolerate the segregated, stigmatizing, 
typically low paying conditions that exist within sheltered workshops 
(Byzek, 1995; Kennedy, 1988) and are, along with other advocates, 
pushing for the rapid expansion of supported employment (Mank, 1994). 
Disability rights activists have begun to target sheltered workshops as 
an issue that can be universally understood: segregation in workshops 
is inconsistent with people's desire to build meaningful careers for 
themselves (Gwin, 1994; Shapiro, 1993; Steinbring & Smith, 1994). 
Rehabilitation facilities engaged primarily in sheltered workshop 
activities will need to increasingly consider conversion if they want 
to stay in business (Murphy & Rogan, 1995). As Paul Wehman (1994) has 
so succinctly put it, ``Conversion, the time is NOW!''

Section One: Philosophical Commitment

    1. Information Gathering: Initial conversion efforts require 
current information. Philosophical and values-based discussions begin 
by becoming well informed about current employment and disability 
trends, especially since conversion is inconsistent with the status 
quo.
    Written Material: As an agency solidifies it's commitment to 
conversion it is valuable to review current writings on the issue. This 
activity will familiarize the organization with the challenges 
experienced by others and can serve to initiate conversion planning. 
Parent and Hill (1990) provide an excellent starting point for 
reviewing conversion resources. The Employment Network of the 
University of Oregon has prepared an excellent resource, Bibliography 
on Supported Employment (Cioffi & Renes, 1993), which has a section on 
organization change and conversion. The recently published, Closing the 
Shop: Conversion from Sheltered to Integrated Work (Murphy & Rogan, 
1995) provides solid, practical information and case studies of 
agencies that have been through the conversion process.
    Policy Initiatives: The decision to convert is consistent with 
recent Federal policy initiatives. Familiarity with this legislation 
can provide additional justification for moving toward full conversion. 
Especially useful are the Rehabilitation Act Amendments of 1986 and 
1992, along with the Americans with Disabilities Act of 1990. Supported 
employment was initially defined within the Developmental Disabilities 
Assistance and Bill of Rights Act of 1984. It is interesting to note 
that the Americans with Disabilities Act Handbook (Equal Employment 
Opportunity Commission & U.S. Department of Justice, 1991) refers to 
supported employment within regulatory interpretive guidance related to 
providing reasonable accommodations (pp. I-59-I-60).
    2. Values: Agencies engaged in conversion have reported that clear 
and consistent philosophies and values facilitate the transition from 
center-based services to supported employment services.

        Successful agencies (in the process of converting) have shown a 
        high level of cohesion around shared principles and values. 
        (DiLeo & Hagner, 1990, p. 8).

    Zero Reject--The High Expectation of SE: Inherent in the definition 
of supported employment is the assumption that all individuals, 
regardless of the degree or severity of disability, are able to work 
when appropriate supports are provided. For some individuals this may 
mean that a highly specific combination of job characteristics, along 
with supports from the employer and co-workers, the agency, the home, 
and the community are necessary for employment success.
    For example, John, who has a label of autism, works at a bank where 
he pours coinage into a coin rolling machine. His manager and co-
workers remind him to take a break whenever they observe initial signs 
of frustration, so he is able to compose himself and come back to his 
workstation, without the situation escalating to self-injurious 
behavior. John does not use public transportation and car pools with a 
co-worker. Without attentive co-workers, a flexible work schedule and 
transportation assistance, John would have difficulty maintaining his 
job.
    The bottom line is that no one is rejected from consideration for 
supported employment and no one needs to become ``job ready'' before 
accessing supported employment. People who are eliminated from 
employment consideration due to their disability, or their perceived 
lack of ``readiness,'' are being denied basic employment access. This 
issue may be the central reason sheltered workshops that simply ``add-
on'' supported employment (as an option within an ``array'' of 
services) have reported feeling like they have competing philosophies.

        According to the thinking of the disabilities rights movement, 
        it is not so much the disabled individual who needs to change, 
        but society. (Shapiro, 1994, p.19).

    Values Clarification: Many organizations have found it useful to do 
interactive exercises with groups of individuals associated with the 
agency in order to clarify basic assumptions about the organization's 
activities and purpose. One valuable exercise is to ask groups to 
identify what they value most about their life or what their personal 
life goals are. People will list a variety of concepts like ``a good 
job,'' ``friendship,'' ``a vacation to Europe,'' ``a nice home,'' etc. 
This can be followed up with a question about what people with 
disabilities value in their lives. The point of the exercise is to 
realize that both lists are the same.
    Quality Litmus Test: Some organizations have found it useful to 
discuss and adopt John O'Brien's five critical service accomplishments 
for those providing services to people with disabilities (1987). 
Program consistency with these values provides another measure of 
whether the organization is on the right track with their conversion 
efforts. They include ``sharing places'' (sometimes referred to as 
integration or community presence), ``relationships'' (inclusion and 
participation in community life), ``making choices'' (empowerment), 
``reputation'' (dignity and respect), and ``developing'' (an assumption 
that all individuals have capacity to learn and grow).

        We are living in one of those rare times in history when the 
        two crucial elements for social change are present--new values 
        and economic necessity. (Naisbitt & Aburdene, 1985, p.2).

    3. Organizational Commitment: Successful conversion requires a high 
degree of commitment on the part of organizational leadership and staff 
members. The development of commitment within an organization is 
perhaps most readily initiated by an executive director or other senior 
management representatives who support conversion. However, a variety 
of staff-initiated tactics may also serve to develop and expand 
organizational commitment.
    Vision/Mission: An organization's vision describes the future: 
where it will be and what it will look like at some future point in 
time. The mission tends to be more descriptive of how the vision will 
be accomplished. Both are typically defined by the organization's 
leadership, but staff, people with disabilities and others can 
strategically influence the process.
    The vision and/or mission of an organization in the process of 
converting would include reference to phasing out workshop services and 
the increasing reliance on community employment options. If an 
effective vision is developed and clearly communicated, staff and 
leadership are more likely to stay focused and less likely to become 
side-tracked. Typically, vision and mission statements are brief, 
memorable, inspirational, and descriptive of the future. Nike's ``Just 
do it,'' and the Starship Enterprise's, ``To boldly go where no man has 
gone before,'' illustrate these concepts.

        The main thing is to keep the main thing the main thing. 
        (Covey, 1994, p. 13).

    Staff Tactics: Staff can do a great deal to develop commitment to 
supported employment and, over time, commitment to conversion. The 
following ``guerrilla strategies'' have been adapted from Dale DiLeo 
(1991):
    a. Refocus problems as opportunities. For example, if residential 
service staff oppose your initial employment efforts, think 
strategically about how you can gain their cooperation. If you are 
successful, they will increase their efforts to assist people in their 
efforts to come to work dressed for their job and arrive to work on 
time.
    b. Ask ``What if . . .'' to develop creative thinking in others. 
Brainstorming, during which all ideas no matter how ``far out'' are 
recorded in some fashion, can open up people to new ideas.
    c. Frame discussions by stepping into the person's (individual 
being served) shoes: what would you feel like if you were in the 
situation?
    d. As a staff person, you are a powerful role model for others on 
your team: act, think and respond accordingly. For example, if one 
staff person is exhibiting a negative, ``no-can-do'' attitude, give 
that person examples of successful employment experiences of 
individuals previously thought unemployable.
    e. Stay informed about the progress of others around your 
community, State, region and the Nation: most people don't and it gives 
you an advantage. APSE can assist in this through Advance articles and 
the annual conference. Publications from the Training Resource Network, 
Virginia Commonwealth University, the University of Oregon and others, 
are resources for current information.
    f. Get close to the action of employment. You can speak with 
authority about the successful employment of people with severe 
disabilities when you're out there doing it!
    g. Push for employment priorities that are disability neutral. 
While prioritizing people perceived as having fewer disability-related 
employment challenges may seem to make sense, it serves to strengthen 
the stereotype that people with the most severe disabilities cannot 
maintain employment.
    h. Prove that people with the most significant disabilities can be 
employed. Success stories go a long way toward convincing disbelievers.
    Strategic Thinking: Always be thinking in terms of how your actions 
can influence others in the organization. Later within this narrative, 
a discussion of stakeholders considers this issue in more detail. How 
can your advocacy for supported employment and the people you serve get 
others behind you? Talk to others about the positive changes you have 
observed within the individuals you serve and within participating 
businesses. Spread credit for accomplishments around to any who have 
contributed to a success. A written thank you note lets others know you 
appreciate their efforts and support. Team approaches, both internally, 
within the organization, and between agencies make everyone's efforts 
more productive.
    4. Customer Service Philosophy: By utilizing a customer service 
philosophy, agencies in the process of converting will enhance their 
efforts significantly. A customer service philosophy can be defined as 
using customer identified needs, preferences and desires to guide 
service process and outcomes. When consumers, families, advocates, 
businesses, staff, service coordination, residential services and 
others are treated with genuine respect it pays off. Organizations that 
commit to a customer service philosophy not only develop a reputation 
for responsiveness and quality, but also create a cooperative 
atmosphere. When difficult problems and issues arise you have others 
rallying around the organization to assist in finding solutions.

    The revolution is upon us and it isn't going to stop. Call it the 
customer revolution, the quality revolution, the service revolution, or 
whatever you like. (Albrecht, 1992, p. ix).

    Customer Identification: Obviously, your most important customer is 
the individual seeking employment. Some individuals with disabilities 
will indicate that family members are just as important to satisfy. 
Another primary customer group is the local business community which 
will supply employment opportunities to your most important customer. 
During the agency conversion process, other identifiable customers 
include agency funding sources (State and local disability services 
funders, vocational rehabilitation, grants/foundations, etc.), the 
board of directors, agency staff, and other agencies providing 
essential supports (residential, transportation, attendant care, 
service coordination and advocacy organizations).
    Customer Satisfaction: It's difficult to know whether your service 
fills a customer's needs and desires unless you ask the customer first. 
Customer input obtained during service plan development and prior to 
critical decisionmaking may provide significant insights into customer 
needs. Following the delivery of a service or support, customers must 
be contacted to determine their level of satisfaction. The service can 
then be improved on the basis of this customer feedback.
    Input and feedback can be obtained in a number of ways. Techniques 
include questionnaires, interviews, open forums, focus groups, or 
regular contact with any customer group or individual customer. Some 
agencies are using ``business advisory councils'' to provide essential 
information about service development and refinement. By obtaining 
advice from the business community, the agency can improve its 
performance in ways that will encourage business commitment to 
supported employment.

        Become customer obsessed . . . To do this, the customer, in 
        spirit and flesh, must pervade the organization--every system 
        in every department, every procedure, every measure, every 
        meeting, every decision. (Peters, 1987, p. 184).

    Consensus and Multiple Customers: Pleasing the broad array of 
customers described above can be a challenge, particularly when 
customer interests compete. The board of directors may want to approve 
a raise which is less than staff expect. When the board learns that 
staff wages are considerably lower than in similar agencies, and when 
staff learn that the cost of health insurance has just increased by 25 
percent, each party better understands the position of the other.
    The careful cultivation of consensus between customers with 
competing interests can go a long way toward generating customer 
satisfaction. By sharing information between customer groups, and 
sometimes having them sit down together to discuss issues in detail, 
their understanding of complex decisions is enhanced. Let customers 
know that organizational decisionmaking is improved when they provide 
input. The final outcome may not be entirely consistent with their 
position, but they will be more satisfied knowing that their position 
was communicated, understood, and considered. They will also become 
more aware of the reasoning behind competing positions. Keep in mind 
that a valued, informed customer is often a satisfied one.
    TQM & Continuous Improvement: Everybody is talking ``total quality 
management'' and ``continuous quality improvement'' these days. These 
concepts fit well with conversion and the supported employment movement 
with its emphasis on mission clarity, incremental and continuous 
improvement, internal and external cooperation, self-directed teams and 
respect for customers. Managers and staff interested in converting 
their organization should familiarize themselves with these concepts. 
Quality service is what your customers are looking for!

Section Two: Finances and Funding

    5. Funding Needs to Follow Individuals: Sheltered workshops can not 
convert unless sheltered workshop funding converts. Funding previously 
allocated for segregated services must move into the community with the 
individual, as that person is served within the new supported 
employment service. In some agencies, once a person is served in a 
community job, their funding is used to serve a new person coming into 
the sheltered setting (sometimes referred to as ``backfilling''). 
Organizations converting to supported employment need to assure that 
support dollars follow the individual for ongoing support needs, career 
development, future reemployment efforts and to help offset the initial 
intensive service costs related to job development and stabilization.
    Go to the Policymakers: If service dollars do not follow the 
individual when their service changes from sheltered services to 
integrated employment, contact your State and local funders and 
policymakers. Often APSE will be able to assist in your efforts to 
change the way funding is allocated and utilized within your area. 
Policymakers need to understand that the ``place and forget'' model 
does not work for people with severe disabilities. Funding must be made 
available for regular, ongoing employment support and career 
development.
    6. Alternative Funding Sources: The funds previously utilized for 
sheltered employment will be a primary source of funding for an 
organizational conversion project. However, a number of additional 
funding sources exist to facilitate conversion efforts.
    Vocational Rehabilitation: Your local VR office can provide 
information on grant dollars available to support conversion efforts. 
Vocational Rehabilitation is often willing to provide grant monies that 
would support a new pattern of service or would introduce a new 
population of rehabilitation eligible individuals to an existing 
service.
    Additionally, VR in some instances will provide funding for staff, 
for onsite assessment, on the job training, and a variety of other 
services, technology and supports. It is wise to consider your local VR 
office as an important partner during conversion efforts.
    Grant Resources: Don't hesitate to contact a variety of sources in 
your efforts to locate funding to support conversion efforts. Make a 
pilot project proposal to the State agency responsible for funding your 
employment service agency. Contact the State Developmental Disabilities 
Planning Council to determine interest in funding assistance. The local 
Job Training Partnership Act (Private Industry Council) may have 
interest in developing a performance-based contract that will pay the 
agency for each successful employment outcome achieved. Some 
communities are developing corporate partnerships which may provide 
employment opportunities and training stipends. Finally, don't ignore 
more traditional sources of funding like foundations and individual 
donors. The supported employment initiative is consistent with the 
disability rights movement and the expansion of civil rights for all 
individuals. Certain donors will find conversion worthy of their 
support.
    Fee for Service: Particularly when other forms of funding are not 
available, fee for service arrangements should be considered. This 
requires the careful analysis of supported employment costs and 
charging a fee to the consumer, family, school, business or other 
funding source. Cost-sharing is another viable option, particularly 
when funding is available for one service component (initial job 
training, for instance) but unavailable for other components (for 
example, transportation or ongoing support). APSE has produced a 
document describing how supported employment service costs can be 
reliably determined (Hill, Ruth & Wood, 1990). This concept can also be 
applied to the primary social security work incentives (PASS and IRWE). 
APSE can provide information and training related to the access of 
these work incentives through Project Win (Ellis, 1995). APSE may be 
able to refer you to a local expert ready to assist in these efforts.
    7. Revenue & Expense Analysis: The fiscal impact of conversion on 
an organization is a primary consideration during planning and 
implementation. It is useful to compare revenues and expenses within 
sheltered workshop operations with projected revenues and costs related 
to supported employment services.

        Supported employment was much more cost effective than 
        habilitation training . . . (and) was also more cost effective 
        than sheltered employment for the majority of programs studied, 
        with annual returns ranging from $1.30 to $4 for every $1 
        invested. (Institute on Community Integration study: cited in 
        DiLeo, 1995, p. 3).

    Workshop Analysis: This analysis requires that cost centers be 
clearly defined and that shop-related costs (staff and consumer wages 
and benefits, building costs, all work contract costs, etc.) be 
separated from administrative costs and other program costs. When 
agencies compare the total cost of providing sheltered work to the 
contract revenues received, most will find that contract revenues are 
not paying for all expenses related to sheltered employment. Sheltered 
workshops typically need to be subsidized through other program dollars 
to break even. This difference can, for planning purposes, be directly 
allocated toward monies needed to operate the new supported employment 
service.
    SE Analysis: Future expenses for an agency's supported employment 
program are best estimated on the basis of existing data. As with any 
labor intensive service, most monies will go for staffing-related 
expenses. It seems reasonable to estimate that one direct-service 
supported employment staff person (job coach, employment training 
specialist, employment consultant, human resource consultant, etc.) can 
serve somewhere between 8 to 15 persons within a supported employment 
program. Support staff such as job developers, secretarial support and 
managers would also need to be included. Other expenses to consider 
include increased mileage costs associated with a more mobile work 
force, and reduced space (100 square feet of office space per staff is 
reasonable with additional allowances for common areas).
    Operational Expense Reduction: Complete agency reorganization may 
be required to make conversion work financially. All positions and all 
expenses may need to be considered for reduction or elimination. The 
major savings within operating expenses for workshops that convert will 
typically derive from reduced consumer wages and reduced operating 
space. All operating expenses need to be carefully analyzed for 
potential savings. Budgets should be created from scratch with each 
item being considered for its necessity and consistency with the 
conversion project.
    Staffing Expense Reduction: With the majority of expenses related 
to staff, staffing reassignment represents the greatest potential for 
expanding resources for the new supported employment emphasis. Any 
staff associated with the ``readiness model'' (work adjustment, adult 
education, activity programs, etc.) should be considered for eventual 
reassignment to a supported employment function in direct service 
positions. In fact, with the exception of direct service SE staff such 
as job coaches/employment consultants, every staff position should be 
analyzed for it's consistency with the new service. Positions such as 
nurses, therapists and social workers could typically be converted, as 
these specialties can be provided through generic services within the 
community. Planning should reflect the rate that workshop staff 
positions will be converted to supported employment positions on the 
basis of the number of consumers projected to be served at any given 
time.
    Management/Administration Reduction: In addition, management and 
administration functions should be considered for simplification and 
reduction. Each current staff position should be carefully analyzed for 
what they will functionally bring to the new reorganized agency. If 
this is not done, a ``hidden'' barrier to full conversion may be 
created. The organizational structure of the new organization should be 
``flat,'' having limited, fully-justified levels. This flat structure, 
besides utilizing staff efficiently, will promote better communication 
between direct service staff and leadership. Some organizations have 
switched from as many as six levels within an organizational chart to 
three: the executive, who provides leadership and support to a 
management team, who in turn provide leadership and support to direct 
service teams. This type of simplified organizational structure fits 
well with the concepts of self-directed teams and total quality 
management.
    Fiscal Conservatism: While conversion is considered 
``progressive,'' making it work requires a conservative approach when 
it comes to money management. Capital investments should be made very 
cautiously since they will need to be depreciated through your 
operating statement. It is difficult to foresee the capital needs of an 
organization when it is changing so rapidly; try to assure the need 
really exists. Remember that a new van loses a significant amount of 
its value as soon as it's driven off the lot.
    Conversion planning should include selling the building or using it 
in a different fashion. Could the building be leased? Would another 
agency come in to share expenses after remodeling? Does the Chamber of 
Commerce know of a business considering moving into the area that needs 
a facility? Could the building be used to generate revenue and 
employment opportunities by the initiation of a day care service for 
children?

Section Three: Stakeholder Considerations

    8. Primary Stakeholders: Stakeholders can be considered those 
customers that have the most to gain or lose as a result of conversion. 
Primary stakeholders include: (a) customers with disabilities, (b) 
their family members, (c) agency staff, (d) agency board of directors, 
(e) other related agencies. Each of these stakeholder groups are 
important because of their influence over the conversion process.

        Supported employment will not succeed without consumer 
        involvement and consumer advocacy. (Wehman & Kregel, 1994, p. 
        7).

    Individuals Served and Family Members: In theory, conversion will 
automatically benefit those people directly served since they will be 
moving out of low paying, stigmatizing workshop activities into real 
employment opportunities. However, due to the significant impact of 
change on individuals receiving services, this stakeholder group should 
be frequently consulted when solutions to a variety of conversion-
related issues are addressed. Consumers and family members should be 
provided with opportunities (open forums, focus groups, surveys, etc.) 
to express their input and concerns relative to the organization's 
plan.
    Staff and Board Members: Conversion is much easier if staff and the 
board are behind conversion efforts. The timing and success of a 
conversion project can be significantly influenced by particular 
members within these two groups. Up front work with staff on developing 
consensus around why conversion needs to proceed will pay big morale 
dividends as the project proceeds. It may be impossible to begin 
conversion until the board of directors understands and fully supports 
the conversion plan.
    Related Agencies: Similarly, conversion efforts can be greatly 
facilitated when agencies providing other supports to the individuals 
served (residential, service coordination, transportation, etc.) are 
kept informed and are made to feel that their input and feedback are 
considered by the converting agency. When related agencies work with 
you instead of against you, many conversion-related headaches can be 
avoided. Agencies that provide funding are, of course, major players 
and need to be brought into the process.
    9. Stakeholder Issues: Conversion-related information should be 
freely provided to all stakeholder groups throughout the entire 
process. Stakeholders will also provide information related to 
preferences and concerns that should be used to guide the process.

        It (is) imperative that each participant have an active voice 
        in planning his or her future as well as an opportunity to take 
        part in the process of agency conversion. (Murphy & Rogan, 
        1995, p. 113).

    Service Recipients: An individual receiving services needs the same 
information that anyone would need who is obtaining employment. Actual 
experience in a variety of job situations will benefit people who have 
had very limited experience working in regular employment environments. 
The provision of work experience in the community allows service 
recipients to make a more informed choice about job and career 
preferences. Organizations should consider committing to the concept 
that any experience in community job environments will benefit 
individuals receiving services. A consumer's separation from a 
community job should not be considered ``a failure'' by people served 
or the staff who provide employment support. It should be valued as a 
learning experience for the individual and staff. If that learning is 
applied, the next community employment opportunity will probably be a 
better match between the job and the individual. In addition, staff 
will have gained insight into how to better support the individual in 
future employment situations.

        Consumers must wrest control of their vocational destinies from 
        human service bureaucracies by exercising their legal and moral 
        right to direct their own careers. (Wehman & Kregel, 1994, p. 
        4).

    Family Members: A primary focus of many family members is related 
to safety in the work place and the adjacent community. If family 
members are to buy in, reasonable assurances around this issue will 
need to be addressed. On the other hand, ``dignity of risk'' may need 
to be brought to the attention of certain family members. Another 
concern that may come up is related to the workshop facility, 
particularly if family members took part in lobbying for and/or 
financing the building. Families may feel a loss of long term security 
that was represented by the facility. All concerns must be acknowledged 
and openly discussed. Utilize a partnership approach to resolving these 
issues.
    Staff: Staff typically want to understand how conversion will 
impact their current job and how they might contribute to the future 
organization. Staff issues and techniques for building staff consensus 
and buy-in will be discussed in more detail within a later section.
    Board of Directors: The focus of a board of directors considering 
conversion may include whether the mission will need to be modified, 
whether an understandable plan has been developed, and whether the plan 
is financially sound. The board will need to be involved from the 
beginning of conversion deliberations. If not, there is the risk that 
an influential constituent will persuade a board member, or the board 
as a whole, that conversion should not be pursued. Be attentive to the 
potential for this style of political wrangling!
    Related Agencies: Agencies providing related services will be 
concerned about how conversion affects their staffing patterns and will 
expect their input to be taken seriously. Suggestions by funding 
agencies will need to be incorporated into the conversion plan in some 
fashion.
    10. Alliance Development: The development of alliances with 
individual stakeholders can be a powerful tool for expanding buy-in by 
other stakeholders who may not be fully convinced that conversion 
should proceed.
    Identify Opinion-Leaders: An effective tactic relative to working 
effectively with stakeholders is to identify and focus information-
sharing efforts on the opinion-leaders within each group. Once the 
support of these people is obtained, they will assist in persuading 
others of the positive impact of conversion.
    Identify Experience Sources: Similar to the preceding 
consideration, it is useful to locate and utilize the ``testimonials'' 
of individuals who have had some experience with the results of 
conversion and/or supported employment. Family members who have 
witnessed the positive change following a supported employment 
situation are powerful allies in efforts to increase the comfort level 
of other families. When persons with disabilities who have supported 
employment experience are added to a board of directors, the board will 
be more likely to support a conversion plan. People served in a 
sheltered setting will be more willing to increase their expectations 
for themselves when a successful SE participant explains the benefits 
he or she has experienced through real employment. People with 
disabilities who feel strongly about their positive experiences within 
a community work place are the best source of information that will 
persuade others that conversion makes sense.

        Do you know of anyone who wanted to return to an adult activity 
        center after being successfully employed in a real job? (Wehman 
        & Kregel, 1994, p. 7).

    11. The Conversion Plan: The written plan is a primary device for 
communicating with stakeholders about conversion. It will communicate 
why, how and when conversion will proceed. The plan creates a 
consistency of understanding that would otherwise be impossible.
    Plan Development and Input: It is very useful to obtain input from 
a variety of sources prior to presenting any plan for conversion. In 
addition to receiving some useful ideas that will guide strategy, this 
will facilitate the creation of buy-in from the various stakeholder 
groups. Polling service recipients about their desires for future 
employment is a powerful way to build conversion support within other 
groups of stakeholders.
    Plan Changes Through Feedback: For the same reasons described 
above, it is useful to obtain information from stakeholders prior to 
implementing any significant changes in the conversion plan. Nothing 
can turn people against your conversion plan as rapidly as when people 
are told one thing and you do another, particularly when the change is 
important to them.

        Input and feedback . . . are essential for the identification 
        of implementation issues, strategies, and resources that will 
        facilitate systems change from center-based to community-based 
        employment services . . . (Parent & Hill, 1990, p. 331).

    Why Change? This portion of the plan would describe the 
philosophies and real benefits of supported employment to those people 
receiving employment services and supports. The inclusion of 
information on Title I (Employment) of the Americans with Disabilities 
Act is useful here as is the concept of civil rights. Reference to the 
rapidly increasing numbers of people with severe disabilities served by 
supported employment and descriptions of successful conversion efforts 
is appropriate within this section. A revised mission statement, agency 
vision, guiding principles, etc. could also be included within this 
portion of the document. It could also be mentioned that many self 
advocates and advocacy organizations are calling for the expansion of 
supported employment services.

        . . . when people realize that community employment is not one 
        option but an opening to many employment options, the demand 
        for workshops will disappear almost completely. Just as 
        institutions are no longer offered in some States, workshops 
        will also be abolished as a viable option. (Murphy & Rogan, 
        1995, p. 22).

    What is Projected to Change? A description of the projected 
outcomes for people served by the organization would be a good starting 
point. Projected organizational charts and how staff positions might 
convert to positions consistent with supported employment provision is 
another piece. This may be the place to summarize the fiscal impact of 
conversion as well.
    Measurable Goals and Objectives: The how and when of conversion may 
be described within targeted accomplishments for the project through 
goals and objectives. These include grant reception and other fiscal 
milestones, placement objectives, staff position conversions, the 
conducting of focus group and open forum meetings. Without the 
projection of achievable (but challenging) goals and objectives, the 
``meat'' of a conversion plan is absent.

Section Four: Implementation Issues

    12. Internal Consensus Development: One of the most significant 
challenges is managing the disruptive effects of implementing an 
agency-wide change in mission and staff function. Real change is 
difficult for anyone. We seem to avoid change whenever possible, almost 
as if we had a status quo instinct. Bringing internal consensus to the 
converting agency will usually require some effort and creativity.
    Input and Clarification: Once the basis for a conversion plan has 
been identified, preferably with input from various stakeholders, staff 
will become concerned about what the change will mean to them, their 
jobs, and their future with the agency. Consumers will have concerns 
about how the change will effect their work lives and access to their 
friends with disabilities. This represents an opportunity to build 
consensus around why, when, and how conversion will be implemented. Of 
course, detailed information will be unavailable and impossible to 
project with absolute certainty. There is no ``road map'' for this 
process. However, staff and consumers can be involved in a process to 
help clarify philosophy, values and principles that will guide the 
change.
    Working Sessions: It is recommended that leadership develop some 
basic ground rules for these sessions. A beginning nonnegotiable list 
might include: a. conversion will proceed (it is not the purpose of 
these sessions to decide whether conversion will occur, that decision 
has been made); b. all people with disabilities have the same right as 
other citizens to access regular employment opportunities within their 
community; and c. discussions will remain positive and focused on the 
issue at hand. Leadership will need to determine which content will be 
developed and drafted prior to the sessions with a request for input. 
Other issues can be more freely discussed with less structure.

        It turns out that sheltered environments ``prepare'' people 
        best for sheltered environments. (Hagner & DiLeo, 1993, p. 10).

    Exercises: Internal buy-in can be best fostered by utilizing 
multiple sessions and multiple techniques. As described previously, a 
values clarification session which identifies the participants life 
goals and aspirations as compared to those of people with disabilities 
may be a good place to begin. Another technique, referred to as SWOT or 
force field analysis, allows for staff and consumers to brainstorm 
(remember, there are no wrong answers during brainstorming) strengths, 
weaknesses, opportunities and threats to the conversion process. This 
exercise can provide leadership with insights into how internal 
customers view conversion and can identify areas to focus on during 
future sessions.
    Mission and vision exercises are valuable once a threshold of 
commitment to the conversion process has been developed. These 
exercises can be done through consensus within small groups with a 
reporting out process to compare results. Mission exercises will tend 
to revolve around what is accomplished and in what fashion. Vision 
exercises may be portrayed as, ``In the future, when we achieve our 
mission, what will consumers be doing and in what kinds of 
environments?'' A technique sometimes referred to as compression 
planning, can be used to make decisions through the development of 
options through brainstorming with those options being narrowed by the 
numerous votes of participants (referred to as multi-voting). Don't use 
this technique unless you are willing to abide by the group's decision. 
The use of an independent facilitator is often beneficial to the 
creative process.

        The more opportunities that staff have to be a part of the 
        change process, the greater their commitment to the resulting 
        change. (DiLeo & Hagner, 1990, p. 10).

    Direct Service Empowerment: A philosophy of customer service 
requires responsiveness to customers. Customer responsiveness is 
enhanced when decisions are made by persons as close to the customer as 
possible. This translates into a commitment by management to let staff 
make decisions about daily issues that come up. This is conceptually 
consistent with management deciding what needs to be done, while 
allowing staff autonomy in how it gets done. Mistakes will be made at 
times and may indicate the consideration of customer service standards. 
These standards or guidelines provide structure to guide staff 
decisionmaking. Written standards become more useful as staff 
increasingly disperse into the community with less direct access to 
management for day in, day out guidance. Although some staff will fear 
increased autonomy, others will thrive on it, increasing their buy-in 
to the process. A measure of staff autonomy is unavoidable as 
conversion proceeds.
    Staff Promotion Ladder: Some agencies have found that staff will 
buy into conversion when they realize that new promotional 
opportunities, with accompanying increases in pay, are present. 
Workshop staff may promote up to community connectors, job coaches, job 
developers, etc. It should be made clear that promotions will not be 
automatic and will occur as a result of being qualified for the 
position the individual promotes into. Organizations have found it 
useful to combine internal promotion of qualified individuals with 
periodic recruitment from outside the organization as staff positions 
are converted. Externally recruited staff bring new ideas and 
perspectives essential for creativity. It is essential that staff hired 
for supported employment positions are well qualified and are willing 
to commit to ongoing training to increase competence. Some existing 
staff may not be able to make this transition.
    Commitment to Becoming the Best They Can Be: Talented staff should 
be encouraged to convert with the agency. Conversion should be 
portrayed as an opportunity for staff to learn new skills that will 
enhance their lives and the lives of the people they serve. Most staff 
will realize that conversion benefits not only consumers, but 
themselves as well!

        The autonomy granted is real and significant, but it is matched 
        by the psychological pressure to perform up to one's limits and 
        to the highest standards. (Peters, 1987, p. 453).

    13. Staff Training Priorities: One aspect of conversion that does 
not seem to vary is the need for a considerable investment in staff 
training. Without enhanced skills, staff will find difficult barriers 
in providing supported employment and related services.
    Marketing/Sales/Customer Service: If staff are to be effective with 
the business community they need to speak, act, and appear like 
business persons and be attentive to fitting into the culture of a 
variety of work places. When staff that are able to make this 
transformation, they become more effective in developing and supporting 
jobs opportunities within the business community. Marketing, sales and 
customer service training may be available through local Chambers of 
Commerce, or national business seminars that circulate around the 
country. Don't hesitate to consider a dress and grooming code, 
particularly for those staff contacting business customers. This issue 
becomes easier to deal with once you make dress and grooming standards 
a ``condition of employment'' when hiring new staff.
    Systematic Instruction: Systematic instruction refers to the skills 
necessary to teach someone who has difficulty learning new things. 
These skills are important not only for the SE professional to utilize 
directly. Systematic instruction expertise will allow support staff to 
provide managers and corporate human resource staff with information 
that will improve their skills in personnel training and development. 
SE professionals who have these skills will be more successful in 
effectively supporting people with severe disabilities.
    Natural Support: Without an understanding of natural support 
development, the SE professional runs the risk of becoming too 
intrusive and allowing the new employee and his or her employer to 
become dependent on the professional. This can result in less stable 
employment for the individual and is an inefficient use of staff 
resource. When the majority of orientation, training and ongoing 
support is provided by employers and co-workers (as they do with most 
new employees), relationships and job security are enhanced. One's job 
satisfaction has a lot to do with the relationships present in the work 
place.

        Because inclusion in the culture is critical to job success, 
        supported employment professionals need to invest time to 
        better help employees to become full-fledged, accepted members 
        of the culture of the workplace. (Hagner & DiLeo, 1993, p. 45).

    Assistive Technology: Assistive technologies hold great promise for 
expanding and enhancing employment opportunities for people with 
disabilities. Many applications are low cost and can often be utilized 
without professional consultation. Familiarity with these technologies 
can be obtained through JAN, the Job Accommodation Network.
    Cooperation and Consensus: A little bit of TQM can go a long way 
when it comes to cooperation and teamwork. These concepts provide a 
basis for working with co-workers and other support agencies. 
Leadership should emphasize that working cooperatively with others 
produces efficiencies for all parties and results in better service to 
customers.
    Create Your Opportunities: As supported employment has expanded, 
increased opportunities for training have become available. Funding 
agencies, vocational rehabilitation, State Developmental Disabilities 
Planning Councils, and other organizations are interested in the 
expansion of supported employment. Contact these groups about their 
interest in funding training in the above and related areas. Contact 
other similar agencies to see if they might agree to pool monies to 
bring training opportunities into the region. Don't forget the 
potential of corporate funding for this kind of training. Corporations 
are increasingly speaking about issues related to diversity in the work 
place and may have interest in funding training that would result in an 
expansion of people with disabilities in their businesses.
    14. Position Conversion: Staffing will be one of the major 
challenges related to successful conversion. Decisions in this area 
should be carefully considered.
    Staff Conversion Opportunities: When a staff person separates from 
the organization, it creates an opportunity to utilize personnel 
resources differently. Instead of automatically filling the position, 
consider whether supported employment staff should be expanded at this 
point. Is it time to add another job developer? Would another job 
coach/employment specialist be a better utilization of the resource? As 
ratios of staff to people served within the workshop decline (as a 
result of community employment), staff can be converted from workshop 
functions to supported employment functions. It makes sense to make 
these staff conversions in conjunction with staff attrition so that the 
hiring process can proceed on the basis of present staffing needs.
    Job Development: Obviously, in order for conversion to progress, 
people must be provided with community employment opportunities. Staff 
who develop jobs within the business sector need to be efficient and 
effective in those efforts. If staff are not able to provide employment 
outcomes after appropriate orientation and training, they should be 
replaced with people who can. Some organizations hire people with a 
proven sales and marketing ``track record'' to increase the likelihood 
that job development will proceed. Other organizations closely monitor 
the productivity of their job development staff to know when they need 
to add or change personnel resource to this function. The success of 
this function is paramount to the success of the conversion project. On 
the other hand, each and every person in the organization should be 
involved in creating employment opportunities through their personal 
and business networks.
    Consulting vs. Coaching: From an inclusion perspective, employment 
consultation makes more sense than job coaching. The employment 
consultation approach attempts to utilize the support resources that 
already exist in the work place so the employee with disabilities is 
presented with expanded opportunities for meeting and making friends 
with managers and co-workers. This approach also makes sense from an 
efficiency stand point. When employers and employees with disabilities 
become dependent on a job coach, staff time on the site increases 
proportionately. It is recommended that agencies strongly consider 
utilizing an employment consultation approach.
    Data: The agency's progress must be monitored through data so that 
informed management decisions can be made. Information useful to making 
conversion-related decisions include the following: jobs developed, 
jobs intact after 60 days, job coach intervention time (how job coaches 
utilize their time directly serving consumers), customer satisfaction 
data, and job characteristics (wages, benefits, hours per week, etc.). 
While the above list is far from exhaustive, it provides some basis for 
analyzing whether conversion is proceeding as planned.
    If conversion is not progressing, these data should provide you 
with some perspective relative to your supported employment service. Is 
the job development function providing enough employment opportunities? 
Are jobs being developed, but not being maintained? Are employment 
staff spending adequate levels of time directly serving consumers? Are 
your various customers expressing a high level of satisfaction with the 
service? Are jobs being developed that have inadequate hours or low 
pay? The second question asked in conjunction with any of the above 
questions is, ``Why or why not?'' Without data it's difficult to even 
ask the right questions!
    Hiring and Firing: Your staff are your organization. Without 
talented, highly motivated staff, your efforts to provide an excellent 
service to people with disabilities and related customers will not 
produce results. Be cautious in hiring staff and cautiously aggressive 
in firing them. Too many nonprofits make a practice of retaining staff 
that do not perform their job duties adequately. Create clear 
expectations and hire staff with the understanding that if they do not 
perform well, they will be terminated from employment. Job match is a 
universal concept. Some people who may perform quite well in other 
service sector positions, will not perform well as a supported 
employment professional.

        Good supported employment management and good conversion 
        management have not required separate skills but simply good 
        management. (DiLeo & Hagner, 1990, p. 7).

    15. Other Policy & Procedure Issues
    Watch the Back Door: Converting organizations will want to consider 
a policy that does not allow individuals to come back into the work 
center once they have been employed. This issue should be discussed 
with stakeholders to better understand the effect such a policy will 
have on consumers and others who provide support. Instead of returning 
to the workshop can people be provided with a community access service? 
Would adult vocational education classes at the local technical school 
make sense for some individuals? How about tours of local businesses or 
actual work experience opportunities within those businesses? The risk 
in opening the ``back door'' of the workshop is that you may never 
close the facility.
    Group Employment: Many agencies in the process of converting are 
considering group employment options as a way to rapidly employ large 
numbers of individuals. While it can typically be said that group 
employment within community businesses offers advantages over sheltered 
work, this option retains many of the stigmatizing effects. Some 
organizations initiate group employment options as a transition phase 
within their conversion plan. However, once these models are relied 
upon, they tend to be difficult to give up. This model is not 
recommended. While this model may seem necessary when job opportunities 
are severely limited, it represents a compromise to the real vision of 
supported employment.
    Transportation: When barriers to supported employment are 
discussed, this issue tends to top the list. Transportation creativity 
is a critically important aspect of conversion planning. Looking at 
existing transportation modes within your community is a start. Car 
pooling, family members, walking, van services, cabs, governmental 
agencies, and ADAtransportation provisions represent possible 
solutions. Do brainstorming with community members who may be able to 
assist in creating new transportation solutions. Transportation monies 
may be available through governmental agencies serving low-income 
populations. Social security work incentives (PASS and IRWE) have been 
utilized to pay for transportation services and, in some cases, 
vehicles. If individuals choose to work close to home and walk or ride 
a bike they may avoid transportation barriers.
    Decentralization: As was mentioned previously, an unavoidable 
result of converting to a supported employment service organization is 
the decentralization of staff. Staff should be expected to take on 
additional responsibility to accurately report work hours and other 
data relative to compensation and reimbursement. Some organizations 
create report forms that include signed statements relative to the 
accuracy of recorded information. Clear expectations and written 
procedures will assist staff in their self-management efforts.
    Safety: Additional considerations resulting from reduced access of 
management support is the issue of consumer safety. Staff responsible 
for working with individuals should go through an investigative process 
that determines their criminal and driving records. Any issues related 
to the safety of consumers and staff should be considered for 
standardization. The agency's liability insurance should be reanalyzed 
to assure that appropriate coverage is in place. Administrators should 
constantly analyze whether exposures exist relative to the safety of 
consumers and staff as any new initiative is implemented. Some agencies 
have developed a formal safety audit which is written for each 
community job opportunity.
    Creativity and Innovation: Conversion does not come with a road 
map. It is likely that a variety of new challenges will arise within 
any organization proceeding through the process. As a result, staff and 
leaders should be encouraged to develop creative responses to issues as 
they arise. Supported employment is a rapidly changing service paradigm 
and will continue to evolve through the creativity of supported 
employment agencies and the people served by them. Converting 
organizations should consider the development of a corporate culture 
that encourages creativity and innovation. Staff should be encouraged 
to be creative, make mistakes and learn from them as opposed to being 
fearful.

        Support failure by actively and publicly rewarding mistakes--
        failed efforts that were well thought out . . . and thoroughly 
        learned from. (Peters, 1987, p. 258)

    The Role of Management: Leadership within converting agencies can 
do much toward reducing the fears that occur when rapid change occurs 
within their organization. Managers and staff alike tend to fear making 
mistakes, taking risks, engaging in conflict, losing control, and 
appearing less than perfect. Leaders and staff must fight these fears 
if they want to significantly change how their organizations do 
business. Leaders can begin the process through the example they set. 
Leaders should do their best to support staff to move beyond fears that 
can harm the entire organization's morale. Celebrating staff 
accomplishments that are consistent with the agency's new orientation 
let's people know that their efforts are important and appreciated.
    Self Advocacy: It is important that self advocates define outcomes 
and express their concerns related to conversion. If an active group 
does not presently exist, try to locate volunteers who will assist in 
the development and coordination of a local group of self advocates. 
People First and local independent living centers can be contacted for 
organizational assistance. Empowered and organized, people with 
disabilities are an extremely valuable resource in resolving many of 
the issues that arise during the conversion process.

Summary

    Conversion from facility-based to supported employment is 
challenging. Converting organizations need to come from a solid 
philosophical base to provide stability as internal conditions become 
chaotic and change rapidly. A written mission, a clearly stated vision, 
and shared values are critical tools that keep the conversion process 
on track. Accurate financial and funding information and well thought 
out fiscal projections go a long way toward easing the fears of 
stakeholders. The creation of forums that seek out and utilize input 
and feedback from stakeholders will provide invaluable information that 
improves planning and implementation. Innovative problem-solving 
throughout, with a focus on customer service, will create an atmosphere 
in which solutions will be identified.

        Keep your eyes on the prize. --Martin Luther King.

    We are often defined as much by ``what we do'' as ``who we are.'' 
Work within ordinary careers must no longer be denied to citizens with 
disabilities. The driving force behind conversion must come from people 
with disabilities who have every right to expect the good things in 
life. As conversion progresses, always remember the purpose of your 
efforts: to provide equal access to real employment opportunities for 
all people with disabilities. It is up to each of us to make the vision 
a reality.

    The Chairman. Our next witness is Mr. Gashel. Mr. Gashel is 
the executive director of the strategic programs for the 
National Federation of the Blind. The National Federation of 
the Blind is the largest member organization of persons who are 
blind. We also look forward to receiving testimony for the 
record from the American Council of the Blind and other 
interested parties.
    Mr. Gashel, you can make your statement for the record.

   STATEMENT OF JAMES GASHEL, EXECUTIVE DIRECTOR, STRATEGIC 
   PROGRAMS, NATIONAL FEDERATION FOR THE BLIND, BALTIMORE, MD

    Mr. Gashel. Thank you very much, Mr. Chairman. I am James 
Gashel. I will proceed to summarize the written statement which 
I have submitted. I am appearing here today on behalf of the 
National Federation of the Blind. I really thank you for caring 
enough to hold this hearing, which is a very important event in 
the employment life of blind and disabled people in years to 
come.
    I am very pleased to comment on employment under the 
Randolph-Sheppard and Javits-Wagner-O'Day acts. These are two 
laws with distinctively different purposes and they achieve 
distinctly different results. I will describe the programs very 
briefly.
    The Randolph-Sheppard Act is used to create small 
businesses for blind people on public property. It is not a 
sheltered program or a segregated program. The self-employed 
vendors earn average profits of about $40,000 a year, with 
responsibilities for financial and personnel management, sales, 
marketing, and business development, all the things that you do 
in a small business.
    The Javits-Wagner-O'Day program is a labor jobs law, where 
the people who work in the program, blind and disabled workers, 
earn average wages of about $8,000 a year, from production, 
assembly, light manufacturing, and maintenance work, which they 
perform under Federal contracts.
    Returning to the Randolph-Sheppard Act, in 1974, Congress 
sought to double the number of Randolph-Sheppard businesses 
over the next 5 years, but 30 years after that, this has never 
happened. I will just point to a few reasons why.
    The first one would be indifference by the Department of 
Education, and the absence of their official here today I guess 
tells the story. Maybe I could just skip the rest of those 
points on that one. By the way, I was going to beg your 
indulgence to take some of Mr. Hager's time, but I guess I will 
not necessarily do that. Maybe he wants us to speak for him.
    The problem is that the 1974 amendments to the Randolph-
Sheppard Act required staffing of 13 full-time positions in the 
Rehabilitation Services Administration to administer and expand 
the program. But in 31 years, the Department of Education has 
never really kept faith with that required staffing. Most of 
the part-time positions devoted to Randolph-Sheppard have been 
abolished. The Division for the Blind, responsible for 
administration of the Randolph-Sheppard program, has been 
abolished.
    The problem is not with the personnel they do have; it is 
with the personnel they do not have. Surveys required to find 
new business opportunities for the program, and for blind 
people in general, have never been done. Funds authorized, 
which could have been spent on program expansion, have never 
been sought.
    The Department of Education stewardship of this program 
amounts to keeping the lights on, but that is just about it. 
Lack of financial resources would be another reason. With 
limited support from the Department of Education, State 
agencies pay for business expansion from funds appropriated 
under the Rehabilitation Act. They use about one half of one 
percent of the total annual appropriation to do this, but most 
of that money is spent on program administration and not on 
expansion of the program.
    Mr. Chairman, you know that you cannot grow a small 
business if you do not spend money on doing it. Limitations 
imposed by Federal agencies other than the Department of 
Education would be another reason for the failure of growth. 
The Postal Service, the Department of Veterans Affairs, and the 
Bureau of Prisons all have established policies which place 
arbitrary limits on business growth for blind vendors within 
their agencies.
    These are just five examples that I mention in my written 
statement, but there is more. NISH seeks preferential treatment 
over blind vendors in military dining contracts. Aside from 
troop dining, 11,633 other products and services are already 
reserved on a special procurement list for NISH and National 
Industries for the Blind as mandatory Government suppliers. 
That is 11,633 other products and services, and then they still 
want food service. NISH alone receives annual commissions of 
over $8 million from military dining contracts, and none of the 
$8 million goes to blind or disabled workers. How much is 
enough for NISH?
    As chairman of this committee's Subcommittee on Disability 
Policy or earlier the Subcommittee on The Handicapped, Senator 
Randolph believed, in unique solutions, to unique 
circumstances, of unique disabling conditions. He did not see 
disability as a generic condition. I cited some of the laws for 
people with specific disabilities that he promoted to get those 
programs funded.
    With respect to the Randolph-Sheppard Act, he sought to 
explode the myth that blind people are best suited for menial, 
repetitive and sheltered jobs. His solution of entrepreneurship 
in public spaces for blind people has provided successful role 
models for all blind people. Now, I have never worked a day in 
my life as a blind vendor, but my life has been enriched, and 
the opportunities I have had have grown because of the 
Randolph-Sheppard Act. The people who are here today, who 
represent the interests of the blind, and there are many of 
them, can tell you, symbols count. Blind vendors employ other 
blind and disabled workers, but we can probably do better at 
that.
    Now, the same can be said of the U.S. Senate, for that 
matter, and of any corporation in America, for that matter, and 
that is why we have this large unemployment rate, and we do not 
like it at all. The same can also be said of NISH. When NISH 
wins contracts, the real winners are managers who are not blind 
or not disabled.
    The critics say that blind people are making too much 
money. Well, they are entrepreneurs, and making money is what 
entrepreneurs are all about. But their average profits are 
$40,000 a year. A program that promotes low-wage jobs for 
persons with disabilities should not be valued to the exclusion 
of entrepreneurship. I thank you.
    [Applause.]
    The Chairman. Thank you very much.
    [The prepared statement of Mr. Gashel follows:]

                   Prepared Statement of James Gashel

    Mr. Chairman, and members of the committee, my name is James 
Gashel. I am Executive Director for Strategic Initiatives for the 
National Federation of the Blind. You have asked me to testify today on 
employment opportunities for blind persons and for persons with 
disabilities under the Randolph-Sheppard Act and the Javits-Wagner-
O'Day Act. Thank you for this opportunity. Both of these programs are 
an important part of our Nation's efforts to assist blind persons and 
persons with disabilities to enter the workforce, support themselves 
and their families, live productive lives, and pay taxes. This 
oversight hearing can do a great deal to insure that these goals are 
achieved.
    Mr. Chairman, I am appearing here today on behalf of the National 
Federation of the Blind (NFB). In case it is not obvious, we often say 
that ``of'' is perhaps the most important word in our name. All of our 
elected leaders and the vast majority of our members are blind. With 
700 local chapters, an affiliate in every State, and more than 50,000 
members nationwide, the NFB is widely recognized as the ``Voice of the 
Nation's Blind.'' Therefore, I welcome the opportunity of this hearing 
to present our views on implementation of both the Randolph-Sheppard 
Act and the Javits-Wagner-O'Day Act as these two laws affect employment 
prospects for blind people in the United States.
    I will begin this discussion by contrasting the purposes of the 
Randolph-Sheppard Act on the one hand, and the Javits-Wagner-O'Day Act 
on the other. As the Randolph-Sheppard Act declares in its opening 
sentence, the mission of this law is: ``. . . providing blind persons 
with remunerative employment, enlarging the economic opportunities of 
the blind, and stimulating the blind to greater efforts in striving to 
make themselves self-supporting . . .'' The word we use today to 
describe this purpose is ``entrepreneurial.'' The goal of the Randolph-
Sheppard Act was and still is to make arrangements for blind people to 
operate small business enterprises on Federal and other public 
property. Program success is measured in part by whether a blind 
individual is set up in a business. The amount of net earnings for 
blind persons from the businesses they operate is the other key measure 
of program success.
    By contrast to the Randolph-Sheppard Act emphasis on individual 
entrepreneurship, the Javits-Wagner-O'Day Act focuses on direct labor 
jobs for blind and disabled people. Under this law the number of jobs 
is the relevant success factor. These jobs are promoted by reserving 
certain products and services for exclusive procurement from nonprofit 
agencies. It is the agencies, not blind or disabled entrepreneurs, who 
qualify to receive Government contracts. These agencies can qualify to 
receive noncompetitive Government contracts as long as blind or 
disabled people perform 75 percent of the agency's direct labor hours.
    Javits-Wagner-O'Day contracts are not conditioned on employment of 
blind or disabled people in management or supervision. Also, the amount 
of wages paid to blind or disabled employees is not a measure of 
program success under Javits-Wagner-O'Day contracts. The average wage 
is far below industry standard for comparable work and may often be 
well below the minimum wage. The law allows any wage below the minimum 
wage to be paid.
    In fiscal year 2004, the latest year for which data are available, 
gross receipts reported by blind Randolph-Sheppard vendors were $488.5 
million, with net profits to the blind of approximately $103.6 million. 
This shows a program-wide profit margin of about 22 percent, all of 
which is received by the blind vendors, and none of which is received 
by a management agency. A profit margin of 22 percent is consistent 
with the industry-wide net profit standard in food service.
    By contrast, sales to the Government under Javits-Wagner-O'Day 
contracts were about $2.05 billion during fiscal year 2004, with about 
$326.2 million paid out to the blind and disabled direct labor 
employees. This is about 18 percent of gross sales, when the industry 
standard for labor costs in light manufacturing and assembly work is 
more like 23 percent. It should also be noted that during fiscal year 
2004, the Government paid approximately $82 million to two central non-
profit coordinating agencies--National Industries for the Blind (NIB) 
and NISH. The amount they receive on each contract is included in the 
price paid by the Government. The price, which is not a competitive bid 
price, is set by a Federal agency known as the Committee for Purchase 
from People who are Blind or Severely Disabled, which oversees the 
Javits-Wagner-O'Day program.
    Since the Randolph-Sheppard Act is entrepreneurial, blind people 
who operate the businesses are the principle beneficiaries in terms of 
remuneration. The same cannot be said of the Javits-Wagner-O'Day 
program. Neither the Javits-Wagner-O'Day Act nor the Javits-Wagner-
O'Day Committee requires NIB or NISH to hire disabled employees in 
management or otherwise, and in practice most managers or supervisors 
are not blind or disabled. The same is true in the management of the 
agencies that receive contracts through NIB and NISH. This means that 
most of the responsible and better-paying jobs resulting from the 
Javits-Wagner-O'Day program are held by non-blind and non-disabled 
people. This is a shocking and little known fact of how this program is 
being operated.
    Mr. Chairman, I am aware that the Randolph-Sheppard program has 
been criticized for failing to employ greater numbers of blind or 
disabled people. I will have more to say on that point in a few 
minutes. However, it is important to know that blind people, rather 
than those who are neither blind nor disabled, receive all of the 
proceeds, pay all of the bills, and retain all of the profits resulting 
from businesses created through the Randolph-Sheppard program. 
According to the data, average net earnings for blind vendors during 
fiscal year 2004 were about $39,800 as compared to estimated average 
annual wages of $8,083 for blind and disabled employees working under 
Javits-Wagner-O'Day contracts during the same period. I should also 
note that the 45,300 employees in the Javits-Wagner-O'Day program 
worked fewer than 41,000 hours, or approximately 900 hours for each 
employee during the year. This is less than half-time employment as 
compared to the full-time work and full-time responsibility involved in 
running a business under the Randolph-Sheppard program.
    This brings me to the question of whether the Randolph-Sheppard 
program leads to too few jobs for blind and disabled people. Mr. 
Chairman, as long as most blind people continue to receive public 
benefits, either Social Security Disability Insurance or Supplemental 
Security Income, as their primary means of support, every effort, 
including the Randolph-Sheppard program, is not enough. The national 
unemployment rate of blind persons is not even compiled by the Bureau 
of Labor Statistics because doing so is neither a political nor an 
economic imperative. The best we can do is to estimate that more than 
70 percent of employable blind persons are either unemployed or 
significantly underemployed to the point that they receive public 
benefits. I wish I were making this up, but these estimates are widely 
believed to be true.
    The National Federation of the Blind believes that too few 
employment opportunities are available through the Randolph-Sheppard 
Act. We are concerned that the number of blind vendors operating 
businesses in the Randolph-Sheppard program continues to decline each 
year. We are pleased that the overall quality of the businesses has 
significantly improved. Better businesses lead to better earnings for 
the vendors, but significantly more opportunities should be available.
    In 1974 Congress overhauled the Randolph-Sheppard Act with the 
expectation that the number of vending facilities in the program could 
double within 5 years. In 1975, 1 year after the amendments, there were 
3,810 blind people operating vending facilities in the Randolph-
Sheppard program. Although the law was changed to increase this number, 
the expansion has not occurred. Today, in fact, there are 1,230 fewer 
blind vendors than there were in 1975. I think I know some of the 
reasons for this decline, but lack of interest among blind people in 
becoming entrepreneurs is not one of them.
    Mr. Chairman, the blind men and women who operate businesses made 
possible through the Randolph-Sheppard Act are taxpaying Americans. 
They honor the legacy of Jennings Randolph and those in Congress who 
supported him. They provide needed services to public employees. Poor 
performance by the vendors is not a reason for their numbers to 
decline.
    The law as amended in 1974 places primary responsibility for 
program expansion in the hands of the Rehabilitation Services 
Administration (RSA), now administered under the Assistant Secretary 
for Special Education and Rehabilitative Services in the U.S. 
Department of Education. According to the law, this agency is supposed 
to lead the Federal Government's effort to establish one or more 
vending facilities for operation by licensed blind persons on all 
Federal property. Is this happening? The answer is ``no.'' All of us 
who care, and especially members of Congress who write the laws, need 
to know why.
    Before the law was amended in 1974, RSA had three full-time 
equivalent positions devoted to administration of the Randolph-Sheppard 
program. With the new statutory designation of RSA as the lead 
Randolph-Sheppard Federal agency, Congress directed that 10 additional 
positions should be established in the Office for the Blind and 
Visually Impaired under RSA. This means that there should have been 13 
full-time equivalent positions at RSA exclusively devoted to developing 
new business opportunities for blind people and administering the 
Randolph-Sheppard program for the past 31 years. The law expressly 
requires RSA to conduct surveys to identify new employment 
opportunities for blind vendors and other blind persons. Have the 
personnel been hired? Have the surveys been conducted? The answer to 
both questions is ``no.'' All of us who care and especially members of 
Congress who write the laws need to know why.
    On October 1, 2005, a new organization plan was put into effect for 
RSA. Under this plan the Division (formerly the Office) for the Blind 
and Visually Impaired has been abolished. The vending facilities 
branch, with personnel exclusively responsible for the Randolph-
Sheppard program, has been abolished. The 10 regional offices, which 
have had personnel responsible for oversight of the Randolph-Sheppard 
program within each Federal region, have been abolished. The positions 
held by all of the personnel in the RSA regional offices have been 
abolished. Most of the remaining RSA employees assigned to the 
Washington, D.C. central office have general responsibilities. Only a 
few have anything whatsoever to do with administering the Randolph-
Sheppard Act as part of their work. This is far short of the staffing 
level directed by Congress in 1974. Somehow the 13 positions designated 
by Congress for Randolph-Sheppard expansion have evaporated. All of us 
who care and especially members of Congress who write the laws need to 
know why.
    Even before this most recent round of retrenchment at RSA, the 
position of Director of the Vending Facilities Branch was left vacant 
for about 18 months from early 2003 until August 2004. The position was 
then filled in about 3 weeks after I went over the head of the 
assistant Secretary and met with the Deputy Secretary of Education. The 
problem is not a failure of the law, Mr. Chairman. It is not a failure 
of the remaining personnel assigned in part to the Randolph-Sheppard 
program. In general, the problem is not a failure of the State 
licensing agencies to do their part on behalf of blind vendors. Nor has 
there been a failure of the blind vendors themselves to uphold their 
responsibilities. By far the most vexing problem is an attitude of 
callous indifference toward the Randolph-Sheppard program at the 
management level in the Department of Education and in the Office of 
Special Education and Rehabilitative Services. Does the Assistant 
Secretary in charge of this office have a plan to achieve the goals for 
the Randolph-Sheppard program that Congress established in 1974? The 
answer is ``no.'' All of us who care and especially members of Congress 
who write the laws need to know why.
    The final section of the Randolph-Sheppard Act provides an 
authorization of appropriations for such sums as may be necessary. No 
administration in over 31 years has asked Congress for funds to carry 
out the Randolph-Sheppard Act pursuant to this section. If the National 
Federation of the Blind has any responsibility for this failure, I will 
accept it, but we are not charged with implementing the law. The 
current administration should be asked if funds will be sought for the 
Randolph-Sheppard program as part of its fiscal year 2007 budget 
request to be submitted early next year. If the answer is ``no,'' all 
of us who care and especially members of Congress who must approve the 
budget need to know why.
    Absent a specific appropriation to implement the Randolph-Sheppard 
Act, State licensing agencies are expected to fund all of their efforts 
for this program primarily from the allotment they receive under 
Section 110 of the Rehabilitation Act of 1973, as amended. Combined 
with the State match, the amount spent to carry out the Randolph-
Sheppard program in fiscal year 2004 was about $10.3 million. This 
represented an investment of less than one-half-of-one-percent of the 
total amount available for vocational rehabilitation that year. Most of 
this spending was just to keep the lights on. Even if all of it was 
devoted to developing new opportunities, what business could grow with 
spending of only one-half-of-one-percent devoted to business expansion 
each year?
    Aside from leadership indifference at the Department of Education, 
the Randolph-Sheppard program is still blocked by most of the obstacles 
to growth that Congress identified in 1974. The Postal Service, for 
example, has a policy that vending route contracts are not subject to 
the priority for blind vendors. This is a substantial limitation since 
most postal buildings will not support an entire vending facility 
business for a single blind vendor. The Department of Veterans Affairs 
refuses to apply the Randolph-Sheppard priority in awarding contracts 
for vending machines and other services at its VA hospitals in spite of 
an unambiguous ruling from the U.S. Court of Appeals for the 8th 
Circuit to the contrary. Also, the Bureau of Prisons continues to 
resist awarding vending facility contracts under the Randolph-Sheppard 
Act.
    The prospects for growth in the Randolph-Sheppard program would be 
poor enough if these were the only obstacles, but they are not. In 
recent years both NISH and the Javits-Wagner-O'Day Committee have 
teamed up to block blind vendors from receiving military troop dining 
contracts. The military food service businesses are much larger than 
the typical Federal office-building snack bar. Having contracts with 
military installations to feed the troops represents a wonderful growth 
opportunity for the Randolph-Sheppard program, but NISH and the Javits-
Wagner-O'Day Committee have claimed that the Randolph-Sheppard Act does 
not apply to these contracts. Failing to maintain this position in the 
Federal courts, they brought their case to Congress to remove the 
Randolph-Sheppard program from military troop dining altogether. To 
date they have won only a limited exemption, which has been included in 
two annual defense authorization bills.
    Combined with the Department of Education's leadership indifference 
and the other forces working to limit the Randolph-Sheppard program, 
opposition from NISH and the Javits-Wagner-O'Day Committee is nothing 
short of shameful. According to the www.JWOD.gov Web site, NISH has 
already been awarded 105 troop dining service contracts but still wants 
the 39 more being performed by blind vendors. For all I know, NISH will 
not be satisfied until they have received all of the military dining 
service contracts available in the United States, and the Randolph-
Sheppard program has none. This on top of the 8,375 products and 3,256 
services that have already been reserved for mandatory source 
procurement through NIB and NISH.
    Mr. Chairman, the Randolph-Sheppard Act places a priority for the 
blind on only one service--vending facilities as defined in the law. 
Although NISH wants it to be otherwise, military dining halls are 
cafeterias, subject to the priority of the Randolph-Sheppard Act. 
Surely it is enough for NISH and the Javits-Wagoner-O'Day program to 
have a mandatory source opportunity to supply 11,633 different products 
and services to the Federal Government without also claiming an 
exclusive right to food service--the only service provided by blind 
vendors under the Randolph-Sheppard Act. How much is enough for NISH?
    Critics have said that a few blind vendors are earning too much 
money from these larger size military dining contracts. However, 
entrepreneurship implies earnings without artificial or arbitrary 
restrictions. Besides, applying the NISH alternative means that a few 
nondisabled managers at NISH and its affiliates are enriched while the 
disabled workers earn an average of $8,083 a year. If blind vendors are 
displaced, NISH itself would receive several million dollars more on 
top of the $8.4 million it now receives each year from military dining 
contracts. How much is enough for NISH?
    Military dining contracts are consistent with the expressed goal of 
the Randolph-Sheppard Act--to enable blind people to achieve ``their 
maximum vocational potential.'' With the food service now being 
provided by blind vendors at 39 military bases, there is a clear track 
record of success that lifts expectations for all blind people. As a 
blind person myself, I am proud to live in a country where people who 
are blind can be given the responsibility for feeding our armed forces. 
I don't believe there is anywhere else in the world but the United 
States where the skills of qualified blind people are so recognized and 
respected.
    This brings me to the most important point about the Randolph-
Sheppard program--what it says and what it means to all of us who are 
blind. I know there are not enough opportunities being created through 
the Randolph-Sheppard program, but the program is not a failure. I have 
never worked a day in my life as a blind vendor, but I along with all 
other blind people have received enormous benefits from this program. 
Watching blind men and women conduct business on a par with others, I 
learned that it is respectable to be blind. Although the Randolph-
Sheppard program directly creates high-quality business opportunities 
only for those licensed to operate vending facilities, the benefits of 
the program go far beyond the licensees. Whenever you belong to a 
minority, Mr. Chairman, you learn the truth in the statement that ``all 
of us are lifted when one of us is lifted.'' No one counts the jobs for 
blind people that result from Jennings Randolph's wisdom of having 
blind entrepreneurs responsible for food services in public buildings. 
However, the spin-off effect is real. The statistical reports do not 
tell you about the lives of those of us who are blind who are enriched 
and more successful because of successful blind vendors who are seen as 
role models. These are the unreported benefits of the Randolph-Sheppard 
Act.
    An explanation of why the Randolph-Sheppard Act targets blind 
people for business opportunities is in order. I knew Senator Randolph. 
He was a sensitive and caring legislator. He was chairman of the 
Subcommittee on Handicapped Workers--later the Subcommittee on the 
Handicapped, and still later the Subcommittee on Disability Policy--
under this full committee, then called the Committee on Labor and 
Public Welfare. As chairman of the Subcommittee on the Handicapped, 
Senator Randolph led the effort to create many programs especially 
designed to address the unique needs of people with diverse disabling 
conditions.
    Senator Randolph demonstrated the understanding that disabilities 
are specific not generic. Different disabilities impose unique 
limitations, which require unique solutions. Consequently, Senator 
Randolph led the way with legislation in the following areas:

     to remove architectural barriers for people who use 
wheelchairs,
     to create training and service opportunities for people 
with developmental disabilities,
     to establish education programs especially designed for 
people who are deaf,
     and more.

    For people who are blind, Senator Randolph said that opportunities 
to serve the public would help to overcome the isolation of stereotyped 
jobs in sheltered settings. He knew that lack of public acceptance and 
misunderstanding were greater problems for the blind than loss of 
eyesight. Providing a priority for blind people to meet a public need 
by having businesses in public spaces was his unique way of exploding 
the myth that the blind could only work in menial, repetitive, and 
sheltered jobs.
    As a blind person growing up in the era when Jennings Randolph 
served in the Senate, I remember wondering what would become of me. I 
knew there were blind people staying at home or working in small shops 
weaving rugs. These were the only blind role models available to me. 
Isolation of this kind can be overpowering, but I was fortunate to 
discover other opportunities. This happened in part by witnessing the 
success of blind entrepreneurs who became my role models.
    If the Randolph-Sheppard program for the blind had been a generic 
program for the disabled, it would not have provided a relevant example 
for me. It may be convenient to write generic laws as a matter of 
public policy, but I thank God that Jennings Randolph had a different 
understanding. In my mind, people with disabilities should have support 
for entrepreneurial opportunities. Bills such as the one proposed by 
Senator Roberts and Senator Kennedy could help to do this. Contracting 
arrangements made possible under the Javits-Wagner-O'Day Act could also 
be used to promote entrepreneurship for people with disabilities. The 
last time I proposed this, NIB, NISH, and the Javits-Wagner-O'Day 
Committee opposed it. That was several years ago, so I hope they would 
take a different point of view today. Expanding the Javits-Wagner-O'Day 
Act to promote entrepreneurship through Federal contracts would be 
better than diminishing opportunities for the blind under the Randolph-
Sheppard Act.
    I have heard it said that the Javits-Wagner-O'Day program is more 
effective than the Randolph-Sheppard program because it results in more 
employment opportunities for more disabled people. NISH has said this 
in trying to remove Randolph-Sheppard vendors from military dining 
contracts. However, this claim expresses a single-minded preference for 
raw jobs over high quality business opportunities. Jobs are important, 
but running a business on your own is also a part of the American 
dream. Contracts, which net more to blind vendors than you and I make, 
are not wrong. The alternative is that entrepreneurs who can see will 
have the earnings. People in business try to make money; that's what 
entrepreneurship is all about.
    Should blind people hire more disabled people when they have jobs 
available? The answer is ``yes,'' but the same can be said of any 
corporation in America. The record of blind vendors in hiring blind and 
disabled employees is far better than the record of NISH in hiring 
blind people in management positions. Non-blind and non-disabled 
executives of NISH affiliates are paid in excess of $500,000 in some 
reported cases, while their direct labor workers who are blind or 
disabled receive an average of $8,083 annually. According to the values 
I have, this is wrong. Creating low-wage jobs for people with 
disabilities is not a better outcome than entrepreneurship.
    Mr. Chairman, speaking for those who care about the health and 
prosperity of the Randolph-Sheppard program, I hope this hearing will 
be the beginning of a renewed commitment to the course of action and 
promises made by Congress when the 1974 amendments to the act were 
passed. Congress did its part in 1974, and the law that was passed at 
that time is still sound. This law is elastic so the program can 
respond to changes over time. Securing effective and committed 
administration is the present challenge. How can administrative 
indifference be overcome? If the Department of Education is either 
unable or unwilling to fulfill its responsibilities, perhaps it is time 
for the Department of Commerce or the Small Business Administration to 
assume the stewardship responsibility for the Randolph-Sheppard program 
from a business-friendly perspective. This is not necessarily a 
suggestion to change the law, but administration of the program must be 
improved. Beyond that, the priority for blind people to operate vending 
facility businesses ``on all Federal property'' must be honored and 
preserved. I hope this hearing will help to achieve these goals. On 
behalf of the National Federation of the Blind, I thank you.
                                 ______
                                 

            National Federation of the Blind (NFB),
                                       Baltimore, MD 21230,
                                                  November 3, 2005.
Hon. Michael Enzi,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, D.C. 20510.

    Dear Mr. Chairman: On behalf of the National Federation of the 
Blind I am submitting the attached supplemental statement for the 
record of the hearing on Employment Opportunities for Persons with 
Disabilities, held October 20, 2005.
    As explained in my supplemental statement, the record contains a 
``Report of the Chairman,'' which is focused on facts that are not 
representative of the Randolph-Sheppard program. I am particularly 
concerned that members of the Senate receive a complete and fair 
analysis of opportunities available to blind vendors. The charges that 
a few blind millionaires are profiteering at the expense of help for 
other blind and disabled people are false and based on distorted 
information reported to you, to other members of the Senate, and to the 
public.
    Blind people who manage large dining service contracts for the 
Department of Defense are not subsidized in any different way from non-
blind commercial enterprises. These facts were available to your staff 
but not reported to you, to other members of the Senate, or to the 
public. Without this information you are given a picture of the 
Randolph-Sheppard program that is not in accordance with the truth. 
Moreover, the staff analysis is based on incomplete information 
relating primarily to large dining contracts that represent less than 
one half of one percent of the businesses operated under the Randolph-
Sheppard Act. These limited facts were then applied to construct a 
broad-based condemnation of the entire Randolph-Sheppard program.
    In light of this, the attached supplemental statement is submitted 
with the hope that you intend to be fair to Randolph-Sheppard vendors, 
all blind people, and the public as improvements and new directions are 
considered.
            Very truly yours,
                                              James Gashel,
                      Executive Director for Strategic Initiatives.
                                 ______
                                 
                 Supplemental Statement of James Gashel

    I am submitting this supplemental statement to respond to issues 
raised in the ``Report of the Chairman on Federal Programs for 
Employment of Persons with Disabilities,'' released at the time of the 
oversight hearing on October 20, 2005. I am particularly concerned that 
members of the committee are not receiving a complete picture of the 
Randolph-Sheppard program due to concentration in the report on some 
military dining contracts viewed in the context of Randolph-Sheppard as 
having an unusually high dollar value. These contracts are not the 
heart and soul of the Randolph-Sheppard program. However, the report 
charges that the entire program has lost its way in favor of high 
(million dollar) incomes for a few blind people. This is a distortion.
    Military dining services constitute less than one half of one 
percent of the businesses currently operated under the Randolph-
Sheppard Act. Most Randolph-Sheppard enterprises are small snack bars, 
coffee shops, automated vending machine services, and newsstands. 
Vending facilities like these make up about 90 percent of available 
Randolph-Sheppard opportunities. Larger businesses, such as cafeterias, 
make up approximately 10 percent of the entire program. Relatively few 
of the Randolph-Sheppard cafeterias have 15 or more employees but often 
may have between 5 and 10, depending on the size of the business. Most 
vending facility managers operate their businesses by themselves, with 
part-time assistance for bookkeeping or running errands. It is not an 
exaggeration to describe these businesses as ``mom and pop'' 
enterprises. This is the heart and soul of the Randolph-Sheppard 
program.
    Answers to the committee's core questions will now be provided from 
the perspective of the entire blind vendor program, rather than the 
sub-set of 39 military dining services:

    Question 1. What outcomes does the Randolph-Sheppard law produce?
    Answer 1. During fiscal year 2004:

     Randolph-Sheppard enterprises had gross sales of $488.5 
million;
     blind vendors had average annual earnings of $39,880;
     Randolph-Sheppard enterprises employed 9,881 individuals;
     2,584 blind persons managed Randolph-Sheppard enterprises;
     32 percent of all jobs in Randolph-Sheppard enterprises 
were held by blind or disabled people.

    This is in stark contrast to the conclusion in the report that, 
rather than helping to promote competitive employment of blind people, 
the Randolph-Sheppard Act ``has made a select few of them wealthy and 
done little if anything for the vast majority.'' This is a distorted 
impression based on analyzing military dining services, creating the 
false impression that these few businesses represent the outcome of the 
entire Randolph-Sheppard program.

    Question 2. Does the Randolph-Sheppard Act fulfill the 
Congressional intent?
    Answer 2. By providing business opportunities to blind people in 
public settings, the Randolph-Sheppard Act:

     gives blind vendors the chance to work, pay taxes, and 
support themselves and their families;
     provides training and work adjustment services for blind 
people assigned to work with blind vendors for on-the-job experience;
     helps to promote a more positive public view of the 
employment potential of blind people, rather than the image of sitting 
at home in rocking chairs;
     encourages blind people to enter fields of employment 
aside from the blind vendor program.

    This is in stark contrast to the report's overall conclusion that 
the Randolph-Sheppard program perpetuates dependence and otherwise 
enriches a few blind millionaires. This distorted view does not reflect 
the first-hand experience of blind vendors, blind people in general, or 
the rehabilitation professionals who serve the blind. Contrary to the 
impression of the Chairman's Report, the Randolph-Sheppard program is 
highly regarded as a successful model used to promote employment 
opportunities for a class of persons who, regardless of laws against 
discrimination, are still often considered to be unemployable. Members 
of Congress responsible for laws like the Americans with Disabilities 
Act (ADA) need to know that lack of opportunities for blind and 
disabled people are deep seated in our society and persist regardless 
of good intentions by lawmakers.
    It should be noted that, notwithstanding comments in the Chairman's 
Report and at the hearing, the Randolph-Sheppard Act and expressed 
Congressional intent do not include any expectation about employment of 
blind or disabled people by blind vendors. The single focus of the act 
is on business opportunities for blind licensees. Congress can change 
this, but the intent of the current law is being fulfilled.
    Beyond that, the suggestion that blind vendors should employ 
greater numbers of blind and disabled persons is based on an impression 
of what occurs under military dining contracts. These contracts contain 
standard conditions imposed on any commercial vendor, including 
nondiscrimination provisions based on race, sex, national origin, age, 
and disability. Pre-employment inquiries to identify people with 
disabilities or to condition employment on the basis of disability are 
prohibited under Federal contracts. Also, no definition, guideline, or 
process is in place for blind vendors to report the number of their 
disabled employees, let alone identifying employees who may be 
considered to have significant disabilities. In light of this, the 
Randolph-Sheppard program should not be judged as a failure for not 
meeting standards that do not exist.

    Question 3. How can the Randolph-Sheppard program be made more 
effective and more efficient?
    Answer 3. Rather than giving up on the blind and the Randolph-
Sheppard concept, Congress should affirm the goals of the 1974 
amendments to the act by:

     directing the Department of Education to establish an 
operating component responsible for promoting and expanding Randolph-
Sheppard opportunities throughout the Federal Government;
     requiring the Department of Education to maintain a 
minimum of 13 full-time positions with staff sufficiently trained and 
qualified for leadership in small business operation and development;
     assuring that regular and periodic surveys are made to 
expand business and employment prospects for the blind in the Randolph-
Sheppard program and beyond, with regular reports to Congress as 
originally required in the Randolph-Sheppard Act;
     prohibiting the United States Postal Service, the 
Department of Veterans Affairs, the Bureau of Prisons, and other 
Federal agencies from implementing policies and practices that limit 
opportunities for Randolph-Sheppard businesses to be established on 
property under their control;
     providing an annual appropriation to support expansion in 
the number of Randolph-Sheppard enterprises both on Federal property 
and in the States;
     requiring all Randolph-Sheppard vendors who have full-time 
employees to recruit new employees first through the State vocational 
rehabilitation program; and
     requiring Randolph-Sheppard vendors with contracts to 
operate Government-provided dining services to employees to 
subcontract, using the Javits-Wagner-O'Day Act to obtain direct labor 
services or in lieu thereof to employ individuals who are blind or 
disabled for a specified percentage of the total hours of work 
performed under the contract.

    These recommendations are consistent with the expressed 
Congressional goal of doubling the size of the Randolph-Sheppard 
program within 5 years of the 1974 amendments to the Act. It is a 
tragedy that this goal was not achieved. Indifference by the Department 
of Education and continued opposition by other Federal agencies and 
programs are the principal contributing factors. Congress should stand 
up for the blind and not abandon this program.

         Response to Questions of Senator Enzi by James Gashel

    Question 1. In your verbal testimony you stated that licensed blind 
vendors can do a better job hiring more persons that are blind or have 
another type of disability. How can the Randolph-Sheppard Act be 
amended to help achieve this goal? Additionally, what assistance do 
State licensing agencies and licensed blind vendors need from the 
Federal Government in order to meet this objective?
    Answer 1. The Randolph-Sheppard Act contains provisions that 
uniquely apply to cafeterias as distinct from other vending facilities. 
These provisions could be modified to include requirements relating to 
employment of blind persons and persons with disabilities. The vast 
majority of vending facilities, other than cafeterias, have few, if 
any, employees.
    Regarding cafeterias, contracts to provide food services to 
employees on behalf of Government agencies could include requirements 
for employment of blind persons and persons with disabilities. 
Subcontracting for direct labor through the Javits-Wagner-O'Day program 
would be a plausible approach. Otherwise, these contracts could include 
disability-hiring requirements relating to all hours worked under the 
contract in lieu of using the Javits-Wagner-O'Day program. Also, the 
same disability hiring requirements should be applied to all 
contractors, not just Randolph-Sheppard vendors. This would further 
increase employment opportunities for blind persons and persons with 
disabilities, while assuring that all competitors for contracts are 
expected to meet the same workforce standards.
    Requirements for employment of blind and disabled persons under 
other cafeteria contracts need to be considered separately since 
profitability of these enterprises is far less certain. Revenue 
received under these contracts depends strictly on individual, over-
the-counter sales and not on prices paid by the Government. Therefore 
the blind vendor is required to keep all costs, including personnel 
costs, as low as possible in order to maintain reasonable and 
affordable prices for the customers. This suggests that a standard, 
such as recruiting employees first through State vocational 
rehabilitation agencies, should be established, rather than more 
specific requirements that may be applicable to contracts for 
Government-provided food service. Also, cafeterias with fewer than 15 
employees should be exempt from any specific disability hiring 
provisions due to the small size of the business. This is consistent 
with Title I of the Americans with Disabilities Act and other equal 
employment opportunity laws.
    The Federal Government should support this initiative by 
establishing a small business employment grant program for State 
vocational rehabilitation agencies to use in providing blind vendors 
with instruction in effective strategies for training, employment, and 
supervision of persons with various disabilities. Payments to support 
on-the-job training services should also be made from funds available 
through this program.

    Question 2. The Randolph-Sheppard Act was enacted in 1936 when most 
individuals with disabilities other than blindness were not included in 
society. Since that time laws such as the Rehabilitation Act of 1973, 
the Individuals with Disabilities Education Act, the Americans with 
Disabilities Act, etc., were enacted to help assure that all 
individuals with disabilities are included in society. Instead of 
carrying out separate programs how can the Randolph-Sheppard Act be 
amended to ensure that it provides business ownership-management 
opportunities to individuals that have a primary disability other than 
blindness?
    Answer 2. A small business development program for persons with 
disabilities, other than blindness, should be established. However, 
this should not be done by amending the Randolph-Sheppard Act. 
Enactment of S. 1570, introduced by Senator Roberts and Senator 
Kennedy, would be a good beginning. Also, Congress should consider 
allowing businesses having a majority ownership interest by blind or 
disabled persons to qualify as mandatory source suppliers under the 
Javits-Wagner-O'Day Act. Amending the Randolph-Sheppard Act by 
substituting ``disability'' for ``blindness'' would be undesirable for 
several reasons:

     The number of Randolph-Sheppard enterprises continues to 
decline while blind people who are trained and ready to work continue 
to wait for opportunities.
     Public acceptance of the blind is best promoted by a 
targeted, rather than a generic, disability approach.
     A specialized program provides all blind people with 
relevant role models of success which would not exist under a generic 
disability program. Congress cannot write a law that makes individuals 
with different disabling conditions identify with one another as being 
generically disabled or having the same needs or experience.
     Extending Randolph-Sheppard business opportunities to a 
broad universe of persons with disabilities, or even to persons with 
significant disabilities, would lead to program abuse. This has been 
found under the Javits-Wagner-O'Day program where the term ``other 
severely disabled,'' has come to mean almost anyone with a disability, 
rather than a person who is unable to work in competitive employment 
due to having a ``severe disability.'' Disability as compared to 
blindness is hard to define and virtually impossible to regulate in 
applying eligibility criteria in the context of programs like Randolph-
Sheppard or Javits-Wagner-O'Day.
     Much of the success achieved by and resulting from the 
present Randolph-Sheppard program is based on public awareness, 
acceptance, and understanding. This is the result of almost 70 years of 
``branding'' around the concept of blind people providing food, 
vending, newsstand, and snackbar services on public property. The 
public image, which has been created is generally quite positive and 
should not be sacrificed when opportunities exist to create alternative 
business development programs for persons with disabilities outside of 
the existing Randolph-Sheppard program for the blind.

    People who are blind represent approximately 2 percent of all 
persons with disabilities in the United States. Blindness stands out as 
an unusually all-pervasive, over-powering and much misunderstood 
condition, surrounded by fear, and wrapped in myth and misconceptions. 
These views of blindness are as prevalent in generic disability 
programs as they are among members of the general public. Therefore, 
blind people--and especially those who cannot see at all--become 
victims of governmental efficiency when programs are combined and 
persons with more easily understood and less feared disabilities 
receive the best opportunities. This result can only be avoided by 
maintaining Randolph-Sheppard as a specialized program for the blind 
while initiating other efforts to promote business opportunities for 
persons with disabilities through other laws and programs.

                   ADDITIONAL QUESTIONS AND COMMENTS

    Question 1. Should the Randolph-Sheppard program be categorical for 
blind vendors or open to persons with all disabilities?
    Answer 1. The mission of the Randolph-Sheppard program--to promote 
business opportunities for the blind--should not be changed for the 
following reasons:

     The number of Randolph-Sheppard enterprises continues to 
decline while blind people who are trained and ready to work continue 
to wait for opportunities. Business opportunities for persons with 
disabilities should be promoted through other laws and programs that 
are not in conflict with the Randolph-Sheppard Act.
     Public acceptance of the blind is best promoted by a 
targeted, rather than a generic, disability approach. Other business 
development programs especially designed for persons with particular 
disabilities should be created. The limitations resulting from 
different disabling conditions are unique and must be considered to 
achieve appropriate use of skills and abilities.
     A specialized program provides all blind people with 
relevant role models of success that would not exist under a generic 
disability approach. Congress cannot write a law that makes individuals 
with different disabling conditions identify with one another as being 
generically disabled or having the same needs or experience.

    People who are blind represent approximately 2 percent of all 
persons with disabilities in the United States. Blindness stands out as 
an unusually all-pervasive, over-powering and much misunderstood 
condition, surrounded by fear, and wrapped in myth and misconceptions. 
These views of blindness are as prevalent in generic disability 
programs as they are among members of the general public. Therefore, 
blind people--and especially those who cannot see at all--become 
victims of governmental efficiency when programs are combined and 
persons with more easily understood and less feared disabilities 
receive the best opportunities. This result can only be avoided by 
maintaining Randolph-Sheppard as a specialized program for the blind 
while initiating other efforts to promote business opportunities for 
persons with disabilities through other laws and programs.

    Question 2. Are Randolph-Sheppard vendors ``triple dipper 
millionaires?''
    Answer 2. Rather than being thorough, balanced, and fair, the 
Chairman's Report is a disservice to the Senate and the public by 
painting a false picture of abuse and profiteering in the Randolph-
Sheppard program. The facts are that blind vendors who operate military 
dining services do not receive different or any greater subsidies as 
compared to non-blind vendors. Nor do they receive Social Security 
benefits, contrary to the implication of the report. Randolph-Sheppard 
vendors who provide military dining services do so under standard 
commercial contracts with components of the Department of Defense. 
Their prices, costs, and profits are regulated to the same extent that 
prices, costs, and profits are regulated by the Government under 
similar contracts with other non-blind vendors. Also, since these 
businesses are conducted under standard conditions applicable to blind 
and non-blind vendors alike, the vendors who are blind are 
unequivocally not eligible for Social Security Disability Insurance 
(SSDI) benefits. Those who are age 65 and older are eligible for Social 
Security retirement benefits, just as Members of Congress who continue 
to work are eligible for Social Security retirement benefits beginning 
at age 65.
    Aside from military dining, subsidies to support blind vendor 
enterprises are definitely part of the program provided by law. If they 
were not, most of the businesses that now exist would not exist or 
would be completely in the hands of private, non-blind, entrepreneurs. 
In that case, the blind individuals who operate these businesses would 
not be paying taxes and would definitely be drawing public benefits for 
themselves and their families. Congress wrote the Randolph-Sheppard Act 
and other laws that subsidize blind vendors, but could now change them 
with great consequence to thousands of individuals. Congress has also 
written tens of thousands of other laws that provide hundreds of 
billions of dollars of taxpayer supported subsidies to tens of millions 
of other people in America who are not blind. Any or all of these laws 
could be changed by Congress at any time, but the Randolph-Sheppard Act 
should not be singled out because subsidies are considered to be an 
abuse. If it were, why wouldn't the entire vocational rehabilitation 
program, providing taxpayer dollars for training and supported 
employment for persons with disabilities, also be considered an abuse? 
When and if the facts are really examined it will be found that 
subsidies provided to blind vendors are not disproportionate to the 
need and are not based on greed.
    It should be noted that eligibility for SSDI benefits is not a 
Randolph-Sheppard subsidy. The Social Security Act provides disability 
benefits, based on an evaluation of each individual's work activity. 
The work activity of blind people in Randolph-Sheppard enterprises and 
in other businesses is evaluated in accordance with guidelines in the 
Social Security Program Operations Manual. These guidelines apply to 
several million Americans, most of whom are not blind. Therefore, the 
implication in the report, that blind vendors are somehow milking the 
system and bilking the taxpayers to obtain billions of dollars of 
undeserved benefits, is not in accordance with the truth.

    Question 3. Should the Randolph-Sheppard Act and the Javits-Wagner-
O'Day Act be examined as essentially equivalent laws?
    Answer 3. Not until the present consideration has the Congress ever 
considered the Randolph-Sheppard and Javits-Wagner-O'Day Acts to have 
essentially the same or similar purposes. While it is true that both 
laws were originally enacted in the 1930's and amended in the 1970's, 
these laws have never been considered by Congress to have anything 
whatsoever to do with one another. However, the present examination has 
led to confusion about the completely separate purposes of these laws 
and created the impression that both programs should meet essentially 
the same standards of evaluation.
    The purposes of both programs are dramatically different from one 
another on the face of both statutes. Viewing program outcomes and 
expectations under the same microscope leads to a distorted picture and 
conclusions that are apt to be incorrect or ill advised for both 
programs. For example, Congress has never expressed the expectation 
that blind vendors should make deliberate efforts to be seen as model 
employers of persons with disabilities. No one can quarrel with the 
goal of employing persons with disabilities in greater numbers. 
However, it is not reasonable to hold blind vendors up to some 
unspecified standard and condemn them for failure when this has never 
been a point of discussion. Moreover, consideration would have to be 
given to whether employment of significant numbers of people with 
disabilities is a practical expectation for most blind vendors who have 
one or two employees. On the other hand, requirements for employing 
blind people and people with disabilities in large businesses, such as 
military dining services, may be practical.
    The point of the Randolph-Sheppard Act is to provide business 
opportunities for blind individuals who are able to manage businesses. 
This distinct purpose should continue to be the preeminent goal of the 
Randolph-Sheppard program. In addition, the Randolph-Sheppard program 
can and should be used more effectively to improve employment 
opportunities for blind people and for people with disabilities. 
Nonetheless, the essential purpose of the Randolph-Sheppard program--to 
create and support business opportunities for the blind--should not be 
obscured by employment standards applicable by law to the unique 
circumstances of the Javits-Wagner-O'Day program and not applied to 
small businesses generally. The expectation that blind vendors could 
employ persons with disabilities for 75 percent of the direct labor 
hours in the business--the Javits-Wagner-O'Day standard--would be as 
unworkable for most blind vendors as it would be for any other small 
business in America.

    The Chairman. I need to recess now so that we can vote. I 
apologize to Mr. Young. He gets to be the big finale on it, but 
we will have to recess a few moments so that I can go vote. 
Others will be returning momentarily.
    Mr. Young. Just a few minutes to say a few things about our 
mission, JWOD.
    The Chairman. You will get to testify. You are next. I want 
to hear it too, otherwise I would turn it over to my colleague 
here. But I want to hear the entire testimony, so I will recess 
it.
    [Recess.]
    The Chairman. I will call the hearing back to order, and I 
thank everybody for their patience. Now, we will have our last 
witness, Mr. Tony Young of NISH, formerly known as the National 
Institutes of the Severely Handicapped. NISH is one of two 
501(c)(3) nonprofit organizations designated to provide 
technical assistance to JWOD nonprofits. Mr. Young is 
testifying only on behalf of NISH and not as a representative 
of the affiliated entities, such as the Committee for Purchase 
from Persons Who are Blind or Disabled or the National 
Industries for the Blind. We are looking forward to receiving 
the written testimony for the record.
    Now, Mr. Young, you can make your statement for the record.

   STATEMENT OF TONY YOUNG, DIRECTOR, GOVERNMENT AFFAIRS AND 
            WORKFORCE DEVELOPMENT, NISH, VIENNA, VA

    Mr. Young. Thank you, Mr. Chairman, members of the 
committee, for this invitation to discuss the Javits-Wagner-
O'Day, or JWOD program, the largest single source of employment 
opportunities for people with severe disabilities in the 
Nation.
    I am Tony Young, senior public policy director for NISH. I 
wear many hats today. I am a person with a severe disability, 
at least by some definitions, a former SSDI, SSI, Medicare and 
Medicaid beneficiary, and a private citizen with decades of 
experience in the disability field. However, as the chairman 
noted, I am not here to represent our Federal oversight agency, 
the Committee for Purchase from People Who Are Blind or 
Severely Disabled, or NISH's sister agency, National Industries 
for the Blind.
    As I stated, by some definitions I have a severe 
disability. I would not be physically eligible for the JWOD 
program, but some time ago I got a job, and I have been working 
ever since, therefore demonstrating that I am not eligible for 
JWOD. The JWOD program is not for people like me. It is for the 
millions of people with severe disabilities who cannot get and 
keep employment without support, or for the people with severe 
disabilities whom the public and private labor markets are not 
yet ready to employ. Some people participate in the JWOD 
program, where they acquire skills and confidence, and move on 
to other employment. However, many other people need more 
intensive services, training and long-term supports, in order 
to work successfully.
    The unwillingness of employers to hire people with severe 
disabilities and the cultural bias against having people with 
severe disabilities in the workplace is still prevalent today, 
despite the passage of the ADA. Later today, we will deliver to 
you copies of a national television and radio public service 
campaign that NISH has launched to encourage all Americans to 
give people with severe disabilities a chance in the workplace.
    Nationwide, employment of people who are blind or have 
severe disabilities in the JWOD program grew to 45,000 in 2004, 
with 70 percent of them working in integrated jobs. JWOD 
employees through NISH provide not only services, such as 
facility management, food service, custodial and grounds 
maintenance for key locations around the country, but also 
fleet management, document destruction, secure mail center 
services and others.
    While very few people think they are familiar with the JWOD 
program, nearly every American has come into contact with the 
program. If you have entered into the United States through a 
border station in Canada, or Mexico, or have been on almost any 
defense installation in this country, or toured the Statue of 
Liberty, the Library of Congress, or many of the presidential 
libraries, then you have most likely been in contact with 
people with severe disabilities, working in the JWOD program.
    If you call the IRS customer service line during tax 
season, chances are good that the customer service person who 
answered your call is a person with a severe disability working 
out of their home through the JWOD program. You have also seen 
the impact of the JWOD program on television while watching 
American soldiers in their battle dress uniforms or wearing 
chemical protective over-garments. These items are all produced 
by people with severe disabilities through the JWOD program.
    It is a fact that 70 percent of all the jobs offered by 
NISH are in integrated settings as defined by the 
Rehabilitation Services Administration. Our nonprofits use a 
variety of strategies and approaches to offer many different 
choices to people with severe disabilities in employment. As a 
group, NISH-affiliated, nonprofit agencies are the largest 
providers of supported employment jobs in the Nation.
    The JWOD program also creates employment opportunities in 
State and local Government and the private sector. During 2004, 
JWOD nonprofit agencies assisted people with severe 
disabilities to obtain almost 30,000 community-based jobs with 
Federal, State and local governments and private businesses.
    People with severe disabilities working in JWOD jobs 
deliver more than quality services and products to Federal 
agencies at a fair price. They also return value to the 
taxpayers. A recent independent study found that JWOD jobs help 
people with severe disabilities reduce their dependence on both 
Federal and State-Government entitlements, and help them become 
taxpaying citizens.
    While the Committee for Purchase has oversight authority 
for the JWOD program, NISH expects its affiliated nonprofits to 
meet the letter and spirit of all applicable laws and 
regulations, including the JWOD directive labor hour ratio, 
Department of Labor, Fair Labor Standards Act, Section 14-C, 
and Internal Revenue Service, executive compensation rules. 
NISH regulatory assistance staff conducts regular on-site 
reviews of these nonprofits, and this supports their nonprofit 
compliance with these regulations through a comprehensive 
program of training and technical assistance.
    NISH urges the HELP Committee to use report language in the 
sense of the Senate resolutions to encourage Federal agencies 
to create employment opportunities for people who are blind or 
have severe disabilities by purchasing services and products 
through the JWOD program. In addition, NISH urges Congress to 
direct the administrative agencies that are overseeing the JWOD 
program and the Randolph-Sheppard program, with the Department 
of Defense, to negotiate a mutually agreeable settlement that 
protects both jobs in both programs and creates a level playing 
field for any new business.
    In closing, NISH would like to work with the Congress to 
develop public policy solutions that deliver more and better 
jobs for all people with disabilities. Unfortunately, for every 
job in the JWOD program there are nearly 500 people with severe 
disabilities who want to work, but are excluded from the 
workplace.
    I will be happy to answer any questions you may have.
    The Chairman. Thank you very much.
    [The prepared statement of Mr. Young follows:]

                    Prepared Statement of Tony Young

    Thank you for this invitation to discuss the Javits-Wagner-O'Day 
(JWOD) Program, the largest single source of employment opportunities 
for people with severe disabilities in the United States with 
operations in every State. I am Tony Young, Senior Public Policy 
Director for NISH. I wear many hats today as I speak to you. I am a 
person with a severe disability and a private citizen with decades of 
experience in the disability field. However, I am not here to represent 
the JWOD Federal oversight agency, The Committee for Purchase from 
People Who are Blind or Severely Disabled, or NISH's sister agency, 
National Industries for the Blind.

                          HISTORY & BACKGROUND

NISH and the Javits-Wagner-O'Day Program

    The Javits-Wagner-O'Day (JWOD) program provides employment 
opportunities for more than 45,000 Americans who are blind or have 
other severe disabilities through Government purchases of services and 
products provided by nonprofit agencies employing such individuals 
throughout the country. In 1938, the Wagner-O'Day Act was passed under 
President Franklin D. Roosevelt in order to provide employment 
opportunities for people who are blind by allowing them to manufacture 
products to sell to the Federal Government.
    In 1971, under the leadership of Senator Jacob Javits, Congress 
amended this act (41 U.S.C. 46-48c) to include people with severe 
disabilities and allow the program to also provide services to the 
Federal Government. More than 60 years later, this extraordinary 
socioeconomic program provides Federal customers with a wide array of 
quality services and products, while providing thousands of people with 
severe disabilities real jobs and increased independence.
    In 1974, NISH was incorporated as the second Central Nonprofit 
Agency to implement the 1971 amendments to the program. The first JWOD 
service contract, which is still in operation today, was for grounds 
maintenance services at the Naval Air Station Whidbey Island, 
Washington.
    Through the Javits-Wagner-O'Day program, the Federal Government can 
use its acquisition policies to support important socioeconomic goals 
while demonstrating integrity and good stewardship of Federal 
contracting dollars. The program is a cost-effective way to help people 
who are blind or have severe disabilities achieve greater independence 
as it enables many individuals to reduce dependence on Government 
support and join the ranks of taxpayers.
    NISH is a national nonprofit agency whose mission is to create 
employment opportunities for people with severe disabilities by 
securing Federal contracts through the JWOD program for its network of 
community-based, nonprofit agencies. Currently, more than 600 nonprofit 
agencies operate through the JWOD program. NISH also works with 
approximately 1,400 affiliated nonprofit agencies to help build their 
capacity and enhance their performance. These include many independent 
organizations as well as nearly 200 nonprofit agencies that are 
affiliated with large, well-known National Nonprofit Agencies that 
include The Arc of the United States, American Congress of Community 
Supports & Employment Services, Goodwill Industries International, 
Inc., International Association of Jewish Vocational Services, Easter 
Seals, and United Cerebral Palsy.

The Past 20 Years of Services and Products (1985-2005)

    At its inception, the JWOD program offered the purchasing of 
products to the Federal Government under the Wagner-O'Day Act. When the 
act was expanded to include people with severe disabilities, the 
Javits-Wagner-O'Day Act authorized nonprofit agencies to provide not 
only products, but also services to the Federal Government. This 
occurred with the addition of NISH's first service contract in 1973. By 
1979, the majority of jobs were still in the manufacturing arena (92 
percent products, 8 percent services). However, the past 20 years 
reflect the Federal Government's growth in outsourcing service 
projects. In 1985, 55 percent of the JWOD jobs were in the service 
industry versus 45 percent that were in manufacturing settings. Today, 
70 percent of employment through the JWOD program is in integrated 
service work, while only 30 percent is in manufacturing.
    Over the years, the JWOD program has diversified its services and 
products through innovative lines of business. JWOD employees, through 
NISH, provide not only such services as facility management, custodial 
and ground maintenance services for key locations around the country, 
but also fleet management, document destruction, secure mail center 
services and others. Therefore, while very few people think they are 
familiar with the JWOD program, nearly every American has come into 
contact with the program. If you have ever entered into the United 
States through a Border Station in Canada or Mexico, or been on almost 
every defense installation in this country, or toured the Statue of 
Liberty, Library of Congress, or eight of the Presidential Libraries, 
then you have most likely been in contact with people with severe 
disabilities working in the JWOD program. Additionally, if during tax 
season, you picked up the phone to call the IRS Customer Service Line, 
chances are good that the customer service person who answered your 
call is a person with a disability working out of their home through 
the JWOD program. And, you have seen the impact of the JWOD program on 
TV when watching American soldiers in their battle dress uniforms or 
wearing chemical protective over-garments. These items have all been 
produced by people with severe disabilities through the JWOD program.
    The NISH Board of Directors exercises oversight to ensure that the 
mission of the organization is fulfilled. The Board is comprised of 27 
voting members and an additional seven advisory members who have 
expertise and skills in a variety of areas, including JWOD employees 
(past and present), legal, advocacy, finance, commercial and nonprofit 
executive experience and a myriad of other backgrounds. For example, 
the current chair is executive director of a State protection and 
advocacy service; the past chair is a representative from small 
business; and the current treasurer is former JWOD Federal Defense 
customer. Many of these Board members have disabilities themselves, 
including three of the five officers.
    In addition to the compliance functions performed by the Committee 
for Purchase, NISH staff also conducts program oversight of NPA 
compliance with JWOD program and other Federal regulations and 
policies. As directed by the Committee for Purchase, NISH expects its 
affiliated NPAs to meet the letter and spirit of all regulations, 
including the JWOD direct labor hour ratio and disability determination 
requirements. NISH supports their ability to comply with rules from the 
Department of Labor, OSHA, IRS and other Federal and State entities 
through a comprehensive program of training and technical assistance. 
NISH Regulatory Compliance staff members conduct regular on-site and 
desktop reviews of all its producing NPAs. Cooperative training 
programs with Federal agencies like the Department of Labor ensure 
consistent interpretation of all standards, such as the complex FLSA 
14(c) regulations. Findings from NISH compliance activities are 
reported to the Committee for Purchase for monitoring and review.

               NPA EXECUTIVE COMPENSATION AND GOVERNANCE

    The committee published a notice of proposed rulemaking on November 
12, 2004 (69 FR 65395) proposing to amend its regulations by requiring 
nonprofit agencies awarded Government contracts under the authority of 
the JWOD Act, as well as central nonprofit agencies designated by the 
committee and nonprofit agencies that would like to qualify for 
participation in the JWOD program, to comply with new governance 
standards. NISH expressed strong support for the general intent of the 
committee. The committee is continually working to improve transparency 
and governance in the JWOD program.

                          NISH/JWOD ADDS VALUE

Serving the Federal Customer With Quality at a Fair Price

    The JWOD program, a priority source of supply, collaborates with 
its Federal customers to satisfy their needs with quality services and 
products, and leverages a national network of nonprofit agencies to 
expand the array of solutions for Government customers. These nonprofit 
agencies are dedicated to training and employing individuals with 
severe disabilities.
    Through the JWOD program, NISH identifies opportunities to assist 
NPAs in developing and implementing new projects. NISH and the NPAs 
have the expertise necessary to provide quality contract management 
services to the Government. By remaining responsive and sensitive to 
the customers' needs and concerns, NISH and the NPAs form strong, long-
term business partnerships with individuals and organizations in every 
sector of the Federal Government. NISH is one the largest sources of 
quality support services to Federal agencies. In 2004, NISH NPAs 
delivered a wide variety of support services to Federal agencies. These 
include such services as secure document destruction for the IRS, 
military dining services, fleet management, commissary shelf stocking, 
grounds keeping, and custodial services.
    People with severe disabilities also produced 86 percent of the 
Government requirement for Chemical Protective Suits. They met the need 
for duffel bags; battle dress uniforms, cold/wet weather protective 
garments and underwear, various military clothing and equipment, 
weapons, including the magazine for the M16 rifle; the new Improved 
First Aid Kit, Fleece Jackets under its Rapid fielding initiative and 
the new Army Combat Uniform. Every NISH product has consistently met 
specification while assembling a record that equals or exceeds that of 
commercial production.
    People with severe disabilities also supply food for use in the 
Women, Infants and Children program and the School Lunch program. They 
procure, package and ship complete meals for National Guard units and 
package nonfat dry milk to support the National Nonprofit Humanitarian 
Initiative to donate nonfat dry milk to nonprofit faith-based 
organizations.
    What is especially important is that, particularly in the arena of 
apparel and other textile related items, DOD is mandated to buy 
domestically produced items under the guidelines of the Defense 
Appropriations Act. While this helps the domestic industrial base, we 
all recognize that import penetration, particularly from China, has 
decimated the number of manufacturing plants in this country. Every 
year there are fewer and fewer and many of them have dedicated 100 
percent of their capacity to the military market as their commercial 
customers go off shore to bring in cheaper goods. NISH nonprofit 
agencies have become a greater influence in this manufacturing market. 
They are available to expand production because we have dedicated 
managers who are willing to put in that extra effort to support their 
military customer and because the unemployment for people with severe 
disabilities is at about 70 percent. These are people who want and need 
to work, but the opportunities have been limited. We at NISH recognize 
the current need to share production with our private sector 
counterparts, but also understand that as the nonmilitary work 
continues to dry up, many will not be able to sustain their businesses 
solely on DOD production.
    In addition to the employment opportunities developed through the 
JWOD program, NISH offers more than 4,000 participants to take 
advantage of the various training events through NISH annually. The 
training program offers more than 350 e-learning courses with over 
1,300 participants through the NISH Institute Online, 250 classroom-
based courses with approximately 1,500 participants, 20 book clubs with 
250 participants and more than 100 NPAs taking advantage of the NISH 
Lending Library.
    NISH also has the capability to respond rapidly to unforeseen 
emergency needs of the NPAs and the people they employ. In the recent 
tragedies of hurricanes Katrina and Rita, the NISH Board and the 
Committee for Purchase responded immediately to be of service to those 
NPAs impacted. The Executive Committee of the NISH Board met in 
emergency session to review and approve authority to allocate 
substantial resources for immediate support of JWOD employees impacted 
by the storm, expenditures necessary to restart JWOD projects or secure 
new work/projects, and intermediate/long-term rebuilding needs.

                            HOW WE ARE DOING

Jobs, Wages, and Benefits

    In 2004, NISH nonprofit agencies, primarily serving people with 
severe disabilities reported a record 41,154 JWOD jobs for people with 
severe disabilities who earned an average annual hourly wage of $9.14. 
The average hourly wage paid to employees in the JWOD program 
significantly exceeds by nearly $4.00 the Federal minimum wage of $5.15 
per hour. All JWOD program employees are paid in accordance with 
Department of Labor rules, including the Fair Labor Standards Act and, 
where applicable, the Service Contract Act. The Department of Labor 
rules enable public and private employers to obtain special 
certificates to pay commensurate wages based on documented productivity 
measures. Some of the agencies that participate in the JWOD program use 
these provisions to extend opportunities for participation in the 
Nation's workforce to people with the most severe disabilities, while 
ensuring a fair contract price for the Federal customer.
    Also, the JWOD program serves as an engine to create many more 
employment opportunities in State and local Government and the private 
sector. The economic benefits resonate throughout the local community, 
including small businesses. During 2004, JWOD producing NPAs also 
reported a total of more than 135,000 jobs for people with disabilities 
supporting a wide range of companies, organizations and Government 
customers. Additionally, more than 29,000 people with severe 
disabilities were placed in jobs in the private and public sectors in 
communities throughout the United States. These placements in 
community-based jobs were a direct result of the extensive training and 
supports offered by NISH NPAs. NISH and its affiliated NPAs have 
continually added services and products to the offerings made to 
Federal agencies, resulting in more types of employment opportunities 
over their 30-year history. The NISH 2004 Annual Report contains more 
detail on the history and scope of NISH activity within the JWOD 
program.
    About 70 percent of these jobs are in integrated, community-based 
settings as recognized by the Rehabilitation Services Administration. 
These jobs are subject to the Service Contract Act. Each worker 
receives Health & Welfare (H&W) benefits for each hour worked, 
including health, dental, and life insurance; retirement; vacation and 
sick leave; and similar benefits.

Satisfaction of Employees With Disabilities

    In 2005 NISH completed an independent survey of its JWOD employees. 
This study found that 76 percent of employees reported that they were 
very happy with their jobs. Only 3 percent were not at all happy with 
their work. Overwhelmingly, employees were also proud of the work they 
did. Approximately 79 percent reported they were very proud of the 
products their company makes, sells, or otherwise supplies, whereas 
only 3 percent said they were not proud at all of their work. When 
rating their jobs, approximately 99 percent of the employees reported 
the jobs were either excellent (53 percent) or good (46 percent). 
Finally, 94 percent of employees reported that they would recommend 
their company to a friend who was looking for work.
    Below is a personal story that demonstrates how the program offers 
independence to employees.

        An important component of employee satisfaction is choice. To 
        Carson R., an employee of the Jeanne Bussard Center in 
        Frederick, MD, choice was actually one of the largest factors 
        in his successful transition to employment. Carson, diagnosed 
        with learning disabilities and mental retardation, was referred 
        to the NPA by the Maryland Division of Rehabilitation Services 
        in 2002.
        During his evaluation, Carson worked jobs in several areas such 
        as assembly, document processing and laundry. While he 
        performed well, Carson was unsatisfied with these options. When 
        asked what work he would prefer, Carson chose a position as a 
        shelf stocker at the Fort Detrick Commissary. Supervisors 
        initially described Carson as shy and withdrawn, but within a 
        few months, his confidence grew.
        Carson moved from part-time to full-time employment. He 
        continually learned new tasks such as order processing, 
        eventually ordering stock for the entire store on a regular 
        basis. Because of the choices offered to him through the JWOD 
        program, Carson had the opportunity to choose his work. His 
        resulting success has enabled him to become much more 
        independent. Currently Carson, who had never worked in the 
        community before JWOD, is saving to buy his own car.

Taxpayer Savings

    People with severe disabilities working in JWOD jobs do more than 
deliver high quality services and products to Federal agencies at a 
fair price; they also return value to taxpayers. A NISH study evaluated 
how employment in JWOD commissary services, food service programs and 
Public Building Service custodial projects affects workers' use of 
Government entitlements. These studies found a substantial return on 
taxpayer investment in the JWOD program.

    Commissary: Employing individuals with disabilities in JWOD 
commissary programs saves the Federal and State Governments an 
estimated $2.75 million annually through the reduction of entitlements 
paid to these individuals. These workers also increased their payments 
to the Government through income and payroll taxes, which amount to an 
estimated $3.9 million yearly. In all, by employing 2,134 workers with 
disabilities in 2003, these JWOD commissary contracts have a net impact 
on Government balance sheets of $6.65 million. This is an annual 
savings of $3,138 per worker. This number has increased every year 
since this study was completed.
    Food Service: Employing individuals with disabilities in JWOD food 
service programs saves the Federal and State Governments an estimated 
$3.7 million annually through the reduction of entitlements paid to 
these individuals. These workers also increase their payments to the 
Government through income and payroll taxes, which amount to an 
estimated $4.9 million yearly. In all, by employing 2,809 workers with 
disabilities, these JWOD food service contracts have a net impact on 
Government balance sheets of $8.6 million. This number has increased 
every year since this study was completed. This is an annual savings of 
$3,053 per worker.
    Custodial: Employing individuals with disabilities in JWOD Public 
Building Service custodial programs saves both the Federal and State 
Governments an estimated $15.7 million annually through the reduction 
of entitlements paid to these individuals. In addition, JWOD employment 
increases the payments these workers make to the Government through 
income and payroll taxes, totaling an additional $15.8 million yearly. 
Thus, by employing 5,176 workers with disabilities, these JWOD 
custodial contracts have a net impact on Government balance sheets of 
$31.5 million. This number has increased every year since this study 
was completed. This is an annual savings of $6,084 per worker.

Federal Customer Satisfaction

    In 2003, NISH surveyed more than 500 Federal organizations with 
NISH contracts. Respondents were primarily in acquisition/contracting 
functions. More than four out of five of the respondents (85 percent) 
were on the positive end of the scale in rating their satisfaction with 
the JWOD program with 44 percent of these being ``very satisfied.'' 
More than four out of five of the respondents (86 percent) said that 
they would recommend the JWOD program to other Federal customers. This 
baseline survey is supplemented by continuous electronic opinion 
research made available to Federal customers after every contact.

              CHALLENGES AND OPPORTUNITIES FOR IMPROVEMENT

Changing Global Services Economy

    While NISH is proud to report that in 2004 almost 42,000 people 
with severe disabilities were employed through JWOD/NISH, the reality 
is that there are millions of people with severe disabilities who want 
to work, but remain unemployed. Contributing to this challenge is the 
fact that the global services economy is requiring a constantly 
changing workforce in the United States. To address this situation, 
NISH has established a team of strategic business development experts 
that are pursuing employment opportunities in diverse lines of business 
that offer greater opportunities for skill training and advancement. 
These include jobs such as complete facility management, medical 
transcription, call center services, fleet management, secure mail 
center services, and document destruction just to mention a few.
    Employment opportunities created through the JWOD program have 
increased substantially over the last 2 decades. During this same time 
period, employment for people with severe disabilities in the 
commercial sector has remained flat or decreased slightly, and 
employment for people with severe disabilities in the Federal 
Government has significantly declined. One reason for this discrepancy 
is that JWOD can offer appropriate job training and employment supports 
to their employees with severe disabilities that enable them to enter 
into and successfully retain long-term employment. These services and 
supports are either not available or available only in a limited scope 
from private sector employers and the Federal Government. The 
availability of these employment supports, coupled with good wages and 
health and welfare benefits, leads many people with severe disabilities 
to choose to stay employed within the JWOD program rather than changing 
to a commercial employer. Even with this fact, in 2004, 2,310 workers 
with severe disabilities were placed in employment outside the NPA from 
JWOD jobs. As fewer and fewer private sector employers offer jobs with 
health care benefits, fewer people with severe disabilities will choose 
this less attractive option.

Low Productivity With Certain Disability Populations

    Many people with severe disabilities who are eligible to 
participate in the JWOD program have challenges to their productivity. 
These challenges limit the economical feasibility of hiring individuals 
in both the private and public sectors many times. NISH has taken on 
this challenge in several ways. First, we have created a Productivity 
Enhancement Initiative that is multi faceted. Five major project areas 
are incorporated to implement our assistive technology (AT) and 
productivity enhancement efforts. These five areas are direct 
assistance, AT best practices and awareness, capacity-building models, 
new employment approaches and NISH internal efforts. Internally, our 
rehabilitation engineers are demonstrating best practices through pilot 
projects where we are using assistive technology and reengineering 
processes to meet this challenge. Our business development team is 
creating jobs in new lines of business that will be better suited for 
applying job carving techniques so that productivity will not limit a 
person's ability to work. Scott Mikelson's story is a good example of 
how a person with severe disability has the opportunity, time, and 
support to gradually advance their careers.

    Scott, or Scottie, as his friends at work call him, has worked for 
Skookum, a Washington State NISH NPA since 1993. Scottie started in the 
Skookum Jump Rope Company after transferring from the Special Education 
program at the Port Townsend School District. He was non-communicative 
and could not make eye contact with his fellow workers. His 
productivity level was a mere 39 percent.
    In 1996, Scottie improved his productivity to 51 percent which 
allowed him to transfer to a JWOD contract at Indian Island, 
Washington. He was able to truly demonstrate his skills and worked with 
supervisors to improve his productivity. He overcame his inability to 
make eye contact with fellow works and customers. Most importantly, he 
became a model worker and increased his productivity to 74 percent.
    One year later, he moved to a janitorial job at Puget Sound Naval 
Shipyard in Bremerton. He was assigned the largest building on the 
base, a huge move for a young man that didn't feel comfortable in new 
surroundings. Scottie has received numerous awards, including one from 
the Deputy Director of the Defense Logistics Agency for ``. . . 
performing his tasks amazingly well and for his professionalism.''

    These news lines of business include the following:

    IRS Document Destruction--People with severe disabilities provide 
secure document destruction (SDD) services under the JWOD program for 
all IRS offices in the western United States. This line of business 
lends itself to similar work in the commercial sector as a means to 
people to transition their skills.
    Laundry Services--This line of business offers an array of 
positions that are machine driven thus an individual's productivity is 
irrelevant. Much work in this area is found in the commercial hospital 
field.

Employment for Diverse Disability Populations

    Serving the diverse disability populations that participate in the 
JWOD program, NISH is making great strides in creating jobs in non-
traditional lines of business. With greater variation in our job 
profile, we can offer more choice to those we serve. These jobs lend 
themselves to more opportunity for integration and upward mobility. A 
few of these options follow.
    Fleet Management--One of the major fiscal year 2004 new business 
line initiatives is fleet management services. This business line has 
the potential to create challenging new job opportunities for 
individuals with many different types of barriers to employment. Fleet 
management is a good line of business because the service involves a 
wide array of activities, in various disciplines and consequently 
offers a variety of employment opportunities. The most labor-intensive 
facet of fleet management is vehicle maintenance and repair, which 
requires technical expertise and physical coordination, strength, and 
stamina. Fleet management services also encompass fleet maintenance 
which is the repair and maintenance of vehicles. During fiscal year 
2004, NISH explored such services with the U.S. Army. All of these 
fleet management business lines will be pursued further in fiscal year 
2005. NISH is partnering with the Department of Labor, ATELS division 
to create a certified apprenticeship program. This will allow people 
with significant barriers to learn the various skills that lead up to 
journeymen mechanic competency.
    Medical Record Transcription--Medical record transcription is a 
home-based employment opportunity. This initiative will provide much 
needed employment to people with severe disabilities who are largely 
restricted to work in their homes. Without jobs such as these, home-
bound people with disabilities would never be able to enter the U.S. 
workforce. The training model used will allow those who develop the 
skill sets over an extended time to become ``certified'' medical 
transcriptionists, which is a wide-open field in the private sector.
    IRS Call Centers--IRS call centers offer a home-based employment 
opportunity that involves answering telephone calls from the public who 
are requesting IRS forms and publications. Additional opportunities 
exist during the 3-month tax season. This project serves individuals 
who are homebound due to the nature of their disability.
    In 2003 NISH began a partnership through the signing of a 
Memorandum of Understanding (MOU) that is a win-win proposition for 
both veterans with disabilities and NISH NPAs. Through this MOU with 
the Veteran's Health Administration, veterans with severe disabilities 
and serious mental illness are referred by the Veteran's Administration 
to NISH NPAs for employment on JWOD contracts.

    To some veterans with disabilities, the JWOD program represents a 
lifeline to remaining independent in the face of significant emotional 
and physical challenges. Anthony Richard, a former U.S. Marine, was 
forced to end his military service after suffering a severe neck injury 
when a 450-pound door fell, striking him in the head. Challenge 
Unlimited, a NPA located in Alton, Ill., hired and employed Anthony on 
a mailroom contract until he obtained a position in the public sector 
with the Iron Workers Union in East St. Louis, Mo.
    Unfortunately, while working with the Union, Anthony's bravery and 
willpower were tested again. He was assaulted by a co-worker, 
sustaining injuries that diminished his ability to maintain his 
equilibrium and leaving his mind in a whirlwind. Anthony returned to 
Challenge Unlimited and was placed on a JWOD contract as a custodian at 
a General Services Administration (GSA) facility.
    Despite immense challenges, Anthony's work at the facility 
progressed, and supervisors recommended him for a demanding job that 
made him solely responsible for maintenance of the facility's 62.5 
outside acres. Despite his severe injuries, the JWOD program allowed 
Anthony to rebuild his confidence and continue supporting his family 
until his final transition to commercial employment with a small 
business contractor at the GSA facility.

Misperceptions

    Based upon a 2005 benchmark study of Federal customers, the 
disability community, nonprofit agencies, and the general public, the 
JWOD program is challenged by many misperceptions. One of the top 
weaknesses expressed by Federal customers is the lack of use and/or 
price of the program. The disability community cited the program's 
inaccessibility, while nonprofit agencies identified bureaucracy as a 
main weakness.
    Thus, there are many misperceptions surrounding the program. One 
high-level misperception is that people with the most severe 
disabilities can not be employed in a commercial competitive 
environment. Not only is this felt by the public in general but it is 
also prevalent in both the Federal and commercial employment sectors In 
an effort to eliminate this prejudice, the JWOD program has launched a 
national public awareness and advertising campaign promoting the 
capabilities of people with severe disabilities and the quality of work 
performed by them. Through on-going efforts to educate Federal 
procurement managers, acquisition officers, and other contracting 
officials NISH is continually educating decisionmakers about the true 
abilities of people with severe disabilities to meet their needs of 
quality services and products at a fair market price.
    Another misperception is that the JWOD program is not consistent 
with the broader disability communities' employment philosophy that 
people with severe disabilities should be employed in an all inclusive 
work environment. The reality is that the majority of jobs (70 percent 
services vs. 30 percent manufacturing) offered by NISH are in 
community-based, integrated service settings including Federal 
buildings and military installations throughout our country. Thus a 
majority of the jobs in the program offer wages that are generally 
higher than those found within their local communities with benefits 
attached. Furthermore, NISH NPAs have assisted and continue to support 
over 29,000 consumers with severe disabilities in both competitive and 
supported employment jobs outside the Federal sector. Jobs offered 
through the JWOD program provide for self-determination by allowing 
people with severe disabilities to make informed choices about their 
wages, benefits, and opportunities for advancement.
    As you may know, Section 5(3)(C) of the JWOD Act requires NPAs with 
JWOD Projects to maintain a non-profit agency-wide ratio of 75 percent 
of its direct labor hours by people with severe disabilities on both 
JWOD and non-JWOD work. Many people incorrectly assume that this forces 
all services and products delivered by JWOD to be worked in congregate 
settings. In fact, less than one-third of jobs are in congregate 
settings. JWOD NPAs utilize a variety of strategies and approaches to 
offer integrated employment in our services and products opportunities 
to people with severe disabilities. In fact, as a group, NISH NPAs are 
the largest providers of supported employment jobs in the Nation.
    Some critics of the JWOD program insist that the only acceptable 
employment outcome for people with disabilities is a job at a for-
profit employer in a position with a career ladder and individualized 
supports. In an ideal world, with unlimited employment support 
resources, this would most certainly be true. The reality is that we do 
not live in an ideal world. We operate in a world of limited resources 
for job training and employment supports. The millions of people with 
disabilities who are unemployed compete with each other as well as 
other disadvantaged groups for scarce public resources for education, 
training, transportation, housing, medical care, and longterm supports.
    JWOD jobs do allow for career advancement.

    Tom Miller from Rapid City, SD, is just one of the many success 
stories of the JWOD program. Tom has been involved with the JWOD 
program for 12 years, initially working as a mess attendant at 
Ellsworth Air Force Base in South Dakota. Since that time, Tom has 
moved into a supervisory position. As such, Tom has first-hand 
understanding of the opportunities and challenges of people with 
disabilities working on JWOD contracts. As a young boy, Tom was told 
that he would never be able to achieve his goals due to his disability. 
Perhaps this is when Tom became committed to not only achieving his own 
personal goals, but to also becoming a voice for those who had received 
similar messages. Tom has dedicated his working life to improving 
employment, integration and choice for individuals with disabilities.
    He is involved with ``People First,'' a nationwide self-advocacy 
organization. In this capacity, Tom does public speaking on the power 
of employment in reaching one's goals. He served 6 years on the NISH 
Board of Directors as a JWOD program Participant and assumed a 
leadership role as the chair of the Awards Committee. Further, Tom has 
been active in NISH's grassroots advocacy program--always forthright to 
share with Members of Congress the philosophy of the JWOD program, as 
well as the perspectives and needs of those employed on JWOD contracts. 
In 2004, 316 people with severe disabilities were promoted into 
management positions on projects. In 2005, NISH began to offer new 
financial assistance grants to NPAs for recruitment, and relocation, 
training and/or accommodations for people with disabilities to move 
into management.

Future Initiatives

    Even with this solid foundation NISH knows there is much more to 
do. Even with an average hourly wage of $9.14 there are those who earn 
less than the Federal minimum wage. Even with 2,310 community job 
placements there are those who want to strike out on their own. Even 
with our new lines of business there are those who seek other 
challenges. Working with emerging technologies, rehabilitation 
strategies, and innovative approaches, JWOD and NISH have crafted 
dynamic strategic plans to address these needs. The strategic plans, 
which are presented in Appendices F and G, include goals and objectives 
for NISH and the JWOD program.

Institute

    The NISH fiscal year 2005-2007 business plan incorporated 
exploration of an Institute on Economic Empowerment For Individuals 
With Significant Disability-Related Barriers to Employment. This 
Institute would align with and carry out several key goals and 
objectives from the JWOD program and NISH strategic plans. The 
implementation of the proposed Institute on Economic Empowerment would 
directly align with and support implementation of strategic goals and 
objectives for NISH (Goal 1 Employment Opportunities) and the JWOD 
program (Goal 1 People Who Are Blind or Have Severe Disabilities and 
Goal 5 Market Development . . . Underserved Populations). More 
specifically, the Institute would directly align with the following 
SMART goals (specific, measurable, achievable, realistic, and time-
bound):

     Increase employment opportunities and informed choices.
     Increase wages and benefits.
     Enhance opportunities for advancement.
     Create, design, and reengineer jobs as a means of 
maximizing productivity and wages.
     Provide personally satisfying employment opportunities.
     Facilitate greater economic independence and self-
sufficiency.

    The Institute provides a clear path to address the challenges 
identified in the NISH Business Plan in defining what constitutes 
quality employment opportunities, and how to create a wider array of 
options for people with significant disability-related barriers to 
employment.

JWOD/NISH and Military Dining Services: It's a Matter of Jobs

    In respect to the disagreement between the JWOD program and the 
for-profit Randolph-Sheppard (R-S) program, NISH believes that military 
dining services are beyond the scope of the R-S definition of operation 
of cafeterias; that recent court decisions are based upon an incorrect 
interpretation of the law; and that the public policy goal of employing 
people who are blind or have severe disabilities is better served in 
this area by the JWOD program than the R-S program which contains no 
requirement that the blind vendor employ individuals with disabilities, 
severe or not, or blindness.
    The U.S. Department of Education (DOE) has asserted that the act's 
blind vendor priority DOES apply to contracts for operation of military 
dining services. These dining services that provide meals to troops at 
Government expense are not vending facilities as defined by the R-S. 
The DOE does not deny this, but instead argues that dining facilities 
are simply cafeterias. DOE overlooks the fact that ``cafeterias'' is a 
subordinate term within the definition of ``vending facilities.'' Under 
this DOE interpretation, military dining services do not qualify under 
the R-S Act because it is not a ``vending facility.'' The DOE has 
interpreted that the 1974 amendment permits the insertion of the word 
cafeterias in place of the term vending facilities.
    The U.S. Department of Defense (DOD), had at first elected to defer 
to the views of DOE, and has applied the R-S Act blind vendor priority 
to award contracts for operation of dining services. DOD is reexamining 
its policy on the applicability of the R-S Act to military dining 
services, especially as it applies to contracts for dining services 
that cover services for less than the full operation of a dining 
facility.
    There are currently more than 3,000 people with disabilities 
working through the JWOD program in management and direct labor 
military dining service jobs. According to an independent study 
conducted in 2002, people with severe disabilities working on military 
dining service projects earned an average wage of $8.31 an hour, which 
has risen steadily each year since. These dining service contracts 
enable people with severe disabilities who work in direct labor 
positions work along with the 14 percent of the management and 
supervisory staff who are people with disabilities to support the 
differing requirements of the armed services as they train and give 
experience to uniformed personnel in the unique combinations needed to 
meet their primary missions.

                         HOW CONGRESS CAN HELP

Encourage Agencies to Create Employment Opportunities by Purchasing 
                    Services and Products Through the JWOD program

    NISH urges Congress to insert report language in the Committee 
Report of the Workforce Investment Act, or in another appropriate 
vehicle, that encourages procurement activities to purchase quality 
services and products at a fair price through the Javits-Wagner-O'Day 
(JWOD) program in order to expand employment opportunities for people 
who are blind or who have severe disabilities.

Direct the Administrative Agencies That Oversee the JWOD program and 
                    the R-S program to Meet with DOD to Negotiate a 
                    Settlement

    NISH urges the Congress to include in the final 2006 defense 
authorization bill the language of Section 815 of H.R. 1815 with the 
following recommended bold changes:

    (a) Extensions of Inapplicability of Certain Acts.--Section 853 of 
the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 
2005 (Public Law 108-375; 118 Stat. 2021) is amended in subsections 
(a)(2)(A) and (b)(2)(A) by striking ``2005'' and inserting ``2006''.
    (b) Statement of Policy.--The Secretary of Defense, the Secretary 
of Education and the Chairman of the Committee for Purchase From People 
Who Are Blind or Severely Disabled shall jointly issue a statement of 
policy related to the implementation of the Randolph-Sheppard Act (20 
U.S.C. 107 et seq.) and the Javits-Wagner-O'Day Act (41 U.S.C. 48) 
within the Department of Defense, the Department of Education and the 
Committee for Purchase From People Who Are Blind or Severely Disabled. 
The joint statement of policy shall specifically address the 
application of those acts to both operation and management of all or 
any part of a military mess hall, military troop dining facility, or 
any similar dining facility operated for the purpose of providing meals 
to members of the Armed Forces, and shall take into account and 
address, to the extent practicable, the positions acceptable to persons 
representing programs implemented under each act.
    (c) Report.--Not later than April 1, 2006, the Secretary of 
Defense, the Secretary of Education and the Committee for Purchase From 
People Who Are Blind or Severely Disabled shall submit to the 
Committees on Armed Services of the Senate and the House of 
Representatives, the Committee on Health, Education, Labor, and 
Pensions of the Senate, the Committee on Homeland Security and 
Governmental Affairs of the Senate, the Committee on Education and the 
Workforce of the House of Representatives and the Committee on 
Government Reform of the House of Representatives a report describing 
the joint statement of policy issued under subsection (b), with such 
findings and recommendations as the Secretaries consider appropriate.

Summary

    JWOD/NISH and the program's NPA Business Partners are proud of the 
employment opportunities that have been created and the dignity and 
honor that work and earning wages have brought to thousands of people 
with severe disabilities through the JWOD program. Through the program, 
NISH has demonstrated progressive growth in the number of jobs created 
for people with severe disabilities. Over the past 5 years, NISH 
increased employment among people with severe disabilities from 
approximately 32,000 to nearly 42,000.
    Despite these efforts, there is a tremendous amount of work to be 
done, The 2000 Census found that there are 20 million people with self-
reported severe disabilities in the United States, and studies continue 
to document the chronic 70 percent unemployment of people with severe 
disabilities. NISH wants to work with the Congress to find these 
solutions through a variety of strategies including the JWOD program. 
We invite you to visit and tour NPAs in the JWOD program in the future. 
I am happy to answer any questions you may have.

          Response to Questions of Senator Enzi by Tony Young

    Question 1. The National Industries for the Blind (NIB) has 
introduced the Business Leaders Program, a comprehensive program that 
offers experience and education in business and leadership. The purpose 
of this series of programs is to provide training and development 
experiences that are focused on professional work, upwardly mobile, and 
careers in the business sector. In your testimony you also indicated 
that NISH is heading in this direction. Can you provide the committee 
with details about NISH's forthcoming training and development programs 
for individuals with disabilities?
    Answer 1. There are several things we are doing including:

Management Assistance Grant Program

    NISH is committed to assisting NISH-Affiliated NPAs in identifying 
and developing individuals with severe disabilities as defined by both 
the JWOD Act and the Rehabilitation Act for new hiring or promotion 
into managerial, supervisory, or executive staff (not direct labor). 
This is done through a financial grant program available to NPAs to 
hire project managers. These funds are used to offset the actual costs 
of recruitment, relocation, training and/or accommodations required to 
hire an executive, supervisor, or manager with disabilities. Through 
this process we are able to provide training and development 
experiences focused on managerial work that is forming a basis for a 
curricula in this area. In addition, a 1 year pilot project with one of 
NISH's producing CRP (Goodwill of S.E. Wisconsin) is nearing its end. 
The purpose of the pilot was to expand their current training program 
for people with disabilities to enhance training geared to assist 
people with disabilities advance in the food service arena to include 
increasing competency and opportunity into supervisory and managerial 
ability. This important pilot was established to build and test 
curricula that could be replicated across JWOD as well as identify 
success metrics, challenges, barriers and lessons learned.
    The wholesale movement of people with severe disabilities into 
managerial positions is a challenging issue. Nevertheless NISH views 
this as a critical issue. Approximately 1 year ago, the NISH Board of 
Directors raised this as a ``key goal.''

Productivity Enhancement Initiative to Increase Productivity With 
                    Certain Disability Populations

    Many people with severe disabilities who are eligible to 
participate in the JWOD program have challenges to their productivity. 
These challenges limit the economic feasibility of hiring individuals 
in both the private and public sectors many times. NISH has taken on 
this challenge in several ways. Two years ago we launched a multi-
faceted Productivity Enhancement Initiative. Five major project areas 
are incorporated to implement the use of assistive technology (AT) and 
productivity enhancement efforts. These five areas are direct 
assistance, Assistive Technology best practices and awareness, 
capacity-building models, new employment approaches and NISH internal 
efforts. NISH rehabilitation engineers are demonstrating best practices 
through pilot projects where we are using assistive technology and 
reengineering processes to meet this challenge. Our business 
development team is creating jobs in new lines of business that will be 
better suited for applying job carving techniques so that productivity 
will not limit a person's ability to work.

Multi-Modal Training Approaches

    Currently, NISH has over 300 e-learning courses focusing on 
management and supervision. A curricula specifically aimed at people 
with disabilities is being built based upon the current pilot 
(previously requested) and other information for people with 
disabilities identified with ``high potential'' for management/
supervision to attend.
    NISH is increasing its efforts to ``train the trainer'' programs. 
Such programs will include providing JWOD producing CRP's with 
increased knowledge and tools to train people with disabilities at the 
organization to reach their potential. A module in ``developing 
leadership'' and ``helping people'' with disabilities transition to 
management positions will be in development.

Differences Between Management Training For People Who Are Blind Verses 
                    People With Severe Disabilities

    NISH is emphasizing ``line of business'' training in all primary 
JWOD business. This training focuses on how to be successful in the 
designated business. Training for managers, supervisors and people with 
disabilities working on JWOD contracts will be included. Train the 
trainer models focusing on teaching specific job skills so people with 
disabilities will be incorporated.
    Currently, NISH holds over 200 face to face courses per year. Many 
of the programs are focuses in ``management and supervisory 
effectiveness.'' People with disabilities are welcome to attend these 
courses. These efforts provide a brief sketch in some of the programs 
in progress. You can be assured this will be an area of emphasis in the 
years to come.
    NISH has begun a pilot program of its own to increase the number of 
people with severe disabilities working as supervisors and managers on 
its JWOD projects. This initiative was designed to account for the 
substantial differences if the populations of people who are blind and 
people with severe disabilities served by the JWOD program.
    As the committee may know, there are substantial differences in the 
populations served by NIB and NISH. NIB creates employment 
opportunities for people who are blind, which is defined as:

        The term ``blind'' refers to an individual or class of 
        individuals whose central visual acuity does not exceed 20/200 
        in the better eye with correcting lenses or whose visual 
        acuity, if better than 20/200, is accompanied by a limit to the 
        field of vision in the better eye to such a degree that its 
        widest diameter subtends an angle of no greater than 20 
        degrees.

    In contrast, the definition of severely disabled, as outlined in 
Public Law 92-28, is as follows:

        ``The terms ``other severely disabled'' and ``severely disabled 
        individuals'' mean an individual or class of individuals under 
        a physical or mental disability, other than blindness, which 
        (according to criteria established by the committee after 
        consultation with appropriate entities of the Government and 
        taking into account the views of non-government entities 
        representing the disabled) constitutes a substantial disability 
        to employment and is of such a nature as to prevent the 
        individual under such disability from currently engaging in 
        normal competitive employment.''

    The key difference in these definitions lies in the addition 
qualifier criterion ``constitutes a substantial disability to 
employment and is of such a nature as to prevent the individual under 
such disability from currently engaging in normal competitive 
employment.'' This criterion means that the people with severe 
disabilities who are employed by JWOD NPAs have a wide variation and 
capabilities, aptitude and interest in managerial and supervisory 
careers and the programs will differ. We will continue to take that 
into account.

Institute

    The NISH fiscal year 2005-07 business plan incorporated exploration 
of an Institute on Economic Empowerment For Individuals With 
Significant Disability-Related Barriers to Employment. This Institute 
would align with and carry out several key goals and objectives from 
the JWOD program and NISH strategic plans. The implementation of the 
proposed Institute on Economic Empowerment would directly align with 
and support implementation of strategic goals and objectives for NISH 
(Goal 1 Employment Opportunities) and the JWOD program (Goal 1 People 
Who Are Blind or Have Severe Disabilities and Goal 5 Market Development 
. . . Underserved Populations). More specifically, the Institute would 
directly align with the following goals:

     Increase employment opportunities and informed choices,
     Increase wages and benefits,
     Enhance opportunities for advancement,
     Create, design, and reengineer jobs as a means of 
maximizing productivity and wages,
     Provide personally satisfying employment opportunities,
     Facilitate greater economic independence and self-
sufficiency.

    The Institute provides a clear path to address the challenges 
identified in the NISH Business Plan in defining what constitutes 
quality employment opportunities, and how to create a wider array of 
options for people with significant disability-related barriers to 
employment.

    Question 2. Moreover, during the hearing, one point that was 
highlighted was moving people from segregated or enclave work into 
community settings or placements. In your testimony, as well as at the 
hearing, you stated that NISH could and should move in this direction. 
What changes need to be made specifically to the JWOD legislation and 
what changes would NISH non-profits need to make in order for this to 
become reality?
    Answer 2. NISH has aggressively moved towards serving people with 
severe disabilities in community settings and increased its efforts to 
place people with severe disabilities in community jobs. We suggest 
consideration of the following changes to the JWOD Act to facilitate 
these goals.

Possible Changes to the JWOD Act Legislation

     Provide incentives to NPAs that reward placement of people 
with severe disabilities from JWOD direct labor jobs into JWOD 
supervisory and management positions as well as positions with for-
profit and non-profit firms and public employers. There should not be 
sanctions against NPAs that have employees elect to remain employed by 
JWOD when the NPAs show that the decision was made through the informed 
choice of the worker.
     Incorporate the provisions of the Employer Work Incentive 
Act for Individuals with Severe Disabilities, S. 1570, introduced by 
Senators Roberts and Kennedy, with changes including replacing the 
Department of Labor with the Committee for Purchase as the agency that 
provides oversight and certifies eligible profit and non-profit 
businesses.
     Clarify the definition of severe disability to recognize 
current thinking. Focus the definition on the significant disability-
related barriers to employment rather than basing the definition on 
medical criteria and/or work deficits.
     Include provisions in the revised JWOD Act that rewards 
NPA practices in informed consumer choice leading to employment 
outcomes based upon the principles of self-determination. Require all 
other Federal agencies to recognize these employment outcomes under 
their programs.

Possible Changes to Related Disability Legislation

    The workplace as a whole has not been open to people with severe 
disabilities over the last decade. Employment of people with severe 
disabilities has remained flat or decreased slightly over this period. 
At the same time employment of people with severe disabilities by the 
Federal Government, once considered a model employer, has declined 
substantially. Clearly there are environmental barriers to employment 
facing people with severe disabilities outside of the JWOD program. 
Here are a few suggested changes to disability programs which the 
Congress should enact:

     Eliminate the work disincentives in SSDI and SSI that 
punish people with severe disabilities when they choose work.
     Increase funding for direct service professionals such as 
job coaches, job developers, and personal assistants who are required 
to staff the customized employment, supported employment, and related 
supports needed by people with severe disabilities to work.
     Increase funding for assistive technology devices and 
services that enable people with severe disabilities to enter into and 
advance at work.
     In regard to military dining services, amend the 
appropriate procurement laws to:
         Preserve the status quo priorities of all current JWOD 
        and R-S jobs by making each law more clear with respect to 
        services performed by entities under the competing law, even 
        when the service is modified by the customer, until the service 
        is released by processes described by the applicable law.
         Define ``operation of a cafeteria'' to mean an 
        independent contractor exercising management responsibility and 
        day-to-day decision-making authority for the overall 
        functioning of the cafeteria with no Government role other than 
        the contract administration functions described in Federal 
        Acquisition Regulation (FAR) Part 42.

    NISH has over the past 3\1/2\ decades since the Javits Amendments 
to the Wagner-O'Day Act of 1938 concentrated its work on increasing the 
employment opportunities of people with severe disabilities seeking to 
enter the workforce through direct labor positions. Implementing this 
mission given to NISH by Congress has led to the results that were 
reported to the Committee for Purchase, which included 3,000 people 
with severe disabilities being placed into community employment from 
JWOD jobs and an additional 30,000 people with severe disabilities 
being placed into community jobs by JWOD/NISH NPA's. In order to change 
the mission we understand and agree that changes must be made to the 
Act. Over the next 8 weeks NISH will collect input on changes that may 
be made in the Javits-Wagner-O'Day Act from various stakeholders, 
including people with severe disabilities, their families, and 
advocates; NISH Board members; NPA executives and direct service 
professionals; and public policy experts. This input will be used to 
craft fully developed public policy proposals for reauthorizing the 
JWOD Act, which we potentially submit to the committee.
    In closing, NISH will be happy to participate in any role as the 
committee completes the Reauthorization of the JWOD Act.

    The Chairman. I want to thank all of you for your 
testimony, the time that it took to put it together, the time 
to travel here, and the time to present it. You have provided 
us with information that is needed. It also raises some 
questions, however.
    Senator Ensign. Mr. Chairman, sorry. I apologize for the 
interruption. I am in a Commerce Committee markup. I want to 
ask unanimous consent that my full statement and written 
questions be part of the record.
    Thank you, Mr. Chairman.
    The Chairman. Without objection; certainly.
    [The prepared statement of Senator Ensign follows:]

                  Prepared Statement of Senator Ensign

    Mr. Chairman, first I would like to thank you for holding a 
hearing to provide some oversight over Federal employment 
programs for people with disabilities. I have been intimately 
involved in issues related to both the Javit's-Wagner-O'Day 
(JWOD) program and the Randolph-Sheppard program for a number 
of years.
    I became involved in issues related to the JWOD program 
upon the request of my constituents. An organization in Las 
Vegas, Opportunity Village, has been operating for more than 25 
years, providing employment and training opportunities for 
those with disabilities. Opportunity Village is truly a home 
away from home for many of Southern Nevada's disabled people. I 
have been privileged to work with this special group from the 
very first day I came to Congress to represent Nevada in 1994.
    Opportunity Village is a JWOD contractor, operating five 
JWOD contracts in the Las Vegas Valley. First and foremost are 
the services provided for the Nellis Air Force Base. Employees 
under JWOD contracts work at five different locations providing 
services ranging from dining facility work to kitchen 
preparation to postal services. The average salaries at these 
five locations range from $8.45 an hour to $10.26 an hour--well 
above minimum wage.
    Opportunity Village also provides employment opportunities 
in custodial services on four different JWOD contracts. In all, 
these contracts provide employment for 82 individuals with 
disabilities. I have had the opportunity to meet a number of 
these people both here in Washington, D.C. and in Las Vegas. 
Each and every one of them has told me how much they appreciate 
and love their job. In particular, I remember Ron who shared 
with me that with the wages he earns he is able to help his Mom 
pay rent and utilities and still has plenty of money left over 
to pursue his favorite hobby, bowling.
    Jamie has a story very similar to Ron's. He started at 
Opportunity Village in 1998 and from day one his talents were 
well recognized. He moved from assembling buckets to becoming 
part of a janitorial crew to washing dishes and bussing tables 
at Nellis Air Force Base. During this time his friends at 
Opportunity Village have assisted him in learning how to 
navigate Las Vegas' public transportation system. However, 
Jamie's proudest accomplishment is coming home with a paycheck 
that allows him to help pay his Mom's mortgage.
    Northern Nevada also has its' own JWOD contractor, the 
Washoe Arc. The Washoe Arc operates three JWOD contracts in 
custodial services and document destruction. Washoe Arc also 
owns and operates four local thrift stores in which disabled 
persons accept, sort, and pick up donations as well as work in 
the stores themselves. Along with providing employment 
opportunities for individuals with disabilities, the Washoe Arc 
also provides many fun community-based activities including 
Yoga and swimming courses as well as literacy and computer 
skill programs.
    Both Nevada JWOD contractors understand the importance of 
helping individuals with disabilities become as self-sufficient 
as possible. Not only do they understand that, but they help 
their clients enter into community based employment as often as 
possible. I believe that both Opportunity Village and the 
Washoe Arc are prime examples of how many JWOD contracts are 
operated in this country.
    As you know, the purpose of today's hearings is to 
determine how effective both the JWOD and Randolph-Sheppard 
programs are in providing employment opportunities for people 
with disabilities. It is difficult to directly compare these 
programs, as they, on their faces, have very different goals. 
The Randolph-Sheppard program's main goal is to provide persons 
who are legally blind with training, support, and legal rights 
to certain Federal food service opportunities. A State 
Licensing Agency finds a contract opportunity, sets up the 
contract, and finds a blind vendor to operate that contract. 
The only requirement of the program is that a blind vendor 
operates the contract. The Randolph-Sheppard program does not 
require that the licensed blind vendor hire any other 
individuals with disabilities to work under the contract.
    The JWOD program is intended to benefit persons who are 
blind or severely disabled. It requires the Federal Government 
to procure certain goods and services from non-profit agencies 
that operate JWOD contracts. Under these contracts 75 percent 
of ``direct labor'' must be performed by persons with 
disabilities. I will not deny the assertion that much of the 
management of these contracts is provided by non-disabled 
people. However, it is important to note that under the 
military dining services operated by JWOD contracts, 14 percent 
of the management and supervisory positions are fulfilled by 
people with disabilities.
    The programs also operate very differently in terms of the 
nature of their profit status. Blind vendors work on a for-
profit basis. JWOD contracts are operated by non-profit 
agencies. Any profit that may be made under a JWOD contract is 
immediately put back into the non-profit agency to provide 
additional services for persons with disabilities.
    In my opinion, it is in the best interest of the Federal 
Government to employ as many persons with disabilities as 
possible in the manner that is most beneficial to each 
individual. I agree with Mr. Gashel and Mr. Young in their 
statements that the unemployment rate of persons with 
disabilities is appalling. I also agree with Mr. Nelson that we 
need to encourage the private sector in providing more 
opportunities and encourage the use of assistive technology and 
other employment supports for disabled workers. We must all 
work together to find the best solution to this growing 
problem.
    I believe that we need to look at these programs through 
the lens of the 21st Century. Congress needs to step back and 
realize the amazing advancements people with disabilities have 
made over the past 30 years.
    In working with both of these programs over the past 4 
years I have come to the realization that some sort of hybrid 
program may be our best option. Rather than having a single 
blind vendor operate a contract that does not employ other 
individuals with disabilities, why not have a disabled vendor 
operate a contract that has 75 percent of direct labor 
fulfilled by individuals with disabilities. I believe that 
there are many persons with disabilities that have the 
capability and desire to operate Federal contracts.
    But that is just one idea. We could also tackle each 
program and take a serious look at flaws and weaknesses to 
determine how more people with disabilities can be better 
served. We need to look at executive compensation, which NISH 
agrees needs to be addressed. Congress cannot stand idly by and 
allow programs to work in a vacuum without oversight and 
change. Just imagine if Congress stood by and did not make 
changes to laws like the Elementary and Secondary Education Act 
or even IDEA. Congress needs to look at the oversight and 
direction provided by Federal agencies overseeing these 
programs.
    I thank everyone for being here today and providing such 
insight into both the JWOD program and the Randolph-Sheppard 
program. I can only hope that we can all sit down and find a 
constructive solution to the problems brought up today.

              Questions of Senator Ensign for James Gashel

    Question 1. What is the average gross profit of an average vending 
stand compared to a military dining facility or a highway vending 
location?

    Question 2. What are the average yearly earnings of a blind vendor 
who operates a dry stand (a location that sells candy, tobacco 
products, magazines and newspapers), a snack bar/coffee shop, a 
cafeteria, a highway rest area, and a military dining facility?

    Question 3. In your testimony you mention that a blind vendor 
``receive all of the proceeds, pay all of the bills, and retain all of 
the profits resulting from businesses created through the Randolph-
Sheppard program.'' However, isn't it true that the State Licensing 
Agency, and not the blind vendor, provides and pays for all training, 
equipment, equipment maintenance, and extensive administrative support 
services? If you agree with that statement, then the blind vendor 
doesn't pay all of the bills, the State Licensing Agency pays a good 
portion of them, correct?

    Question 4. Of the contracts operated by blind vendors, what 
percentage are subcontracted out to large companies that do not have 
any sort of requirement to employ individuals with disabilities? Do 
blind vendors subcontract to JWOD contractors? Why or why not? I am 
specifically interested in military dining facility contracts that are 
operated by blind vendors. What percentage of those contracts are 
operated in totality by a blind vendor? What percentage or number are 
subcontracted to large food service corporations?

    Question 5. Of the contracts operated by blind vendors, what 
percentage of individuals hired under those contracts have 
disabilities?

    Question 6. Your testimony states that blind vendors can make 
``more than you and I.'' You also state that it is good public policy 
to provide as you call them, entrepreneurial opportunities for blind 
vendors. In the area of military dining facility contracts, do you 
believe that it is good public policy to force 3,000 individuals with 
disabilities to lose the jobs they enjoy under JWOD contract to benefit 
a very small number of blind vendors so they can ``make more than you 
and I?''

    Question 7. In what way is the National Federation of the Blind or 
other organizations for blind vendors assisting blind vendors in 
creating employment opportunities for other persons with disabilities? 
According to 2002 Department of Education data, less than 5 percent of 
workers are blind and around 5 percent have other disabilities. I am 
particularly interested about what work is being done on military 
dining facility contracts that are operated by blind vendors. If a JWOD 
contractor is able to have individuals with disabilities complete 75 
percent of the direct labor provided under the contract, why couldn't a 
blind vendor contract do something similar? Maybe even provide 25 
percent?

              Questions of Senator Ensign for Bob Lawhead

    Question 1. What Federal policies or procedures could be put in 
place to help not only Federal agencies, but also private sector 
employers utilize supportive employment techniques to employ 
individuals with disabilities? Could these changes be made within 
either the Randolph-Sheppard Act of the Javit's-Wagner-O'Day Act, or 
would a new law need to be put in place?

    Question 2. Do you believe that all individuals with intellectual 
disabilities should be employed in a supported employment-type job, or 
do some smaller sheltered workshop-type employment options make sense 
for some of this population?

    Question 3. What activities or training opportunities could be 
provided to an individual like your son to help promote self-sustaining 
employment in the long-term?

               Questions of Senator Ensign for Tony Young

    Question 1. In what way could the Federal Government alter or 
create new legislation that would provide entrepreneurial opportunities 
for all individuals with disabilities?

    Question 2. The issue of executive compensation has been mentioned 
not only in today's testimony, but has also been the subject of recent 
newspaper articles. What is NISH's position on this issue and what is 
being done to ensure that excessive executive compensation is reigned 
in?

    Question 3. In your testimony you mention the work that NISH is 
already doing to improve the operation of the JWOD program. How could 
the law be changed to improve or create more employment opportunities 
for individuals with disabilities?

    Question 4. As many of you know, I have been working on the 
military dining facility issue for some time now. Could you go through 
some of the legislative history of the Randolph-Sheppard program and 
explain why NISH believes that R-S does not have priority under current 
law? Could you also explain how the ambiguity came to be?

    The Chairman. Mr. Nelson, I will begin with you since you 
were the first to testify. You had to take care of the first 
jitters for everybody, and we appreciate you standing up and 
doing it first. You did an outstanding job. I admire your 
determination, your perseverance. You explained to us what you 
did to get your current job. It is tough enough to find a job 
under the best of circumstances, and it sounds like you had a 
few obstacles in your path.
    In your testimony you talked about the segregated workshop 
and that it did not have pre-vocational training. Did the 
workshop provide you with anything that was useful?
    Mr. Nelson. None whatsoever. In fact, they did not train 
you for a community job, or voc rehab. All I can say is zero. 
You were there and you were just stuck. You were not even told 
when you got into the shelter that it would be segregated. I 
did not even make $12,000 or $14,000 a year or anything like 
that.
    The environment in the sheltered workshop, supervisors had 
their own tables. Other people with disabilities had their own 
tables. They were segregated in that regard. Bathrooms were 
also segregated compared to a community job. You could not even 
have lunch with your supervisor if you wanted to.
    The Chairman. Thank you. That helps us to understand the 
environment a little bit better there.
    Ms. Bartlett, you are quite an accomplished young woman. As 
Senator Kennedy mentioned in his introduction and also from 
your testimony, you have an extensive background for your young 
age. I commend you for your community service. You should be 
quite proud of your accomplishments, and I am happy to hear 
that you are continuing the lifelong learning process. You 
never can quit learning. It does not matter if you are in 
school or in a job. But as a student at Middlesex Community 
College, I am glad to hear that you have set high academic and 
career goals for yourself.
    What subjects interest you the most and why?
    Ms. Bartlett. I think it is English because I love to 
write. I do not know what else there is to say about it.
    The Chairman. Well, I think your testimony displayed that 
you had some capability in that area, and I will look forward 
to reading your first novel. I think those are some great 
aspirations.
    Mr. Lawhead, as I mentioned in my opening statement, the 
JWOD program data shows that only 5 percent of JWOD workers 
move into supported or competitive employment each year. Why do 
so few workers move out of JWOD into supported and competitive 
employment? Any ideas?
    Mr. Lawhead. Well, my experience is that organizations that 
run the sheltered workshops to provide the product side of JWOD 
and the enclaves or congregate work crews that are in Federal 
installations really do not place people into competitive 
employment, or regular employment, at very high rates, largely 
because they would lose the workers they need to perform those 
contracts.
    The Federal contracts are demanding. Quality standards are 
high. As Mr. Young was stating, JWOD programs have a great 
record of providing high quality products and services. There 
is a natural disincentive to have those people graduate out of 
that program and move on to the regular, competitive workforce.
    The Chairman. You mentioned that you do some changeovers in 
programs. Do people come to you and ask for that, or are you 
selling this around the country? How do we get people started 
on that?
    Mr. Lawhead. Well, the Association for Persons and 
Supported Employment has published a little booklet about that 
to try to encourage agencies that are interested in moving 
toward being more consistent with the ADA and with the Olmstead 
ruling into basically taking those agencies and those 
organizations, and moving them to supported employment and 
competitive employment kinds of agencies. My agency did that in 
the mid 1990s. As I said in my testimony, a number of agencies 
nationally are working on that right now, and a number have 
completed that process.
    But yes, what you see are agencies changing their mission 
and really believing in the fact that people with disabilities 
have a right to work in the regular workplace in individualized 
kinds of jobs. They typically come to me and ask for that, but 
it is not like I have any kind of monopoly on that. There are 
all kinds of people who have gone through this process 
throughout the United States. Indiana University has a program 
that has done a lot of research in that area and there is all 
kinds of literature on it. A lot of us in community services 
are trying to help other agencies who are interested in doing 
the right thing.
    The Chairman. Everyone's testimony will be a part of the 
record, and then we have some questions that we do. We will 
also be submitting some questions because of the limited amount 
of time that we have to ask questions, and we are hoping each 
of you will provide the information on that as well. I will be 
asking some more questions because I think that changeover 
could be a real key to making some more progress in this area 
because I am disappointed in the progress that we have made. I 
see that my time has expired.
    Senator DeWine?
    Senator DeWine. Mr. Chairman, thank you very much. I want 
to first congratulate you and Senator Kennedy for holding this 
hearing. I think it is time that we do look at these programs. 
These programs obviously have great intent. They have done a 
lot of good. I think the key is, are we maximizing their use? 
The good that they are trying to do and are doing is to provide 
opportunities for disabled Americans, and that is what we are 
looking at in today's hearing, and I hope that we continue, Mr. 
Chairman, to do that.
    I would also say, Mr. Chairman, that we should look, as a 
committee and I think as Congress, at other opportunities for 
Congress to help create opportunities for disabled Americans in 
regard to job opportunities. You have pointed out, Senator 
Kennedy has pointed out, and our witnesses have pointed out 
that the unemployment level among disabled Americans is simply 
unacceptable. We have so many disabled Americans who want to 
work, who cannot work, and who are ready to work.
    There is something wrong. There is something wrong in this 
country when we pat ourselves on the back--I think maybe 
correctly--for the ADA, for they are the legislation that we 
have passed in Congress, and the IDEA. We have made a lot of 
progress. And yet, still, when we look at the unemployment rate 
among disabled Americans, it is very, very discouraging. You 
look at those statistics and you talk to people who are 
disabled, who want to work, and who are either underemployed or 
unemployed, and it is just a real, real problem.
    One of the things that I have been looking at is the 
opportunity to maybe see what we can do at the Federal level in 
regard to contracts. We have let contracts out from the Federal 
Government. We are privatizing in different areas. IRS, for 
example, is privatizing collections. Maybe there are some 
things that we can do in this area to encourage some of the 
companies that are getting these contracts to utilize people 
who are disabled. There are great opportunities with the 
technology we have today. Senator Ben Nelson and I have been 
working on legislation in this area which we would like to 
explore with other members of the Senate.
    I was talking to my colleague from Georgia a moment ago. 
The technology is just amazing today. For example, LaRosa's 
Pizza in Cincinnati, if you call there today and order a pizza, 
you are going to be talking to an American who is disabled. 
That person will take your order, and that person will be the 
person who puts it into the computer and deals with that. So 
there are great opportunities that we have, and I think 
Congress has not, candidly, been proactive enough, and the 
Federal Government has not been proactive enough in this area. 
I think there is more that we need to do.
    Mr. Lawhead, let me ask you a question if I could. You 
testified that you ran sheltered workshops, and you have talked 
about the transition I guess that you have made as well as the 
transition that you have led other people to make.
    Let me ask you this. If I would go into a sheltered 
workshop in Ohio or anyplace else, do you believe that everyone 
in that kind of typical workshop--if there is a typical 
sheltered workshop--would be able to transition into the 
community as you have talked about? I mean, we have, obviously, 
people with different disabilities. We have a lot of different 
individuals in the sheltered workshop. Can you kind of address 
that for us?
    Mr. Lawhead. Yes, sir. I do not know that we believed that 
was the case when I started my career in Columbus, Ohio.
    Senator DeWine. What year was that?
    Mr. Lawhead. That was 1976.
    Senator DeWine. I do not want to age you, but I think it 
gives us a historical perspective of thinking and where you 
think we are going.
    Mr. Lawhead. 1976 through 1979, actually, the Franklin 
County program in Columbus was one of the six identified 
leaders in this movement of trying to figure out how to do 
community employment for people with severe disabilities. In 
those days, we did not know how far it would go, but we found 
over the last 30 years since then is that there are techniques 
now.
    I am going to refer you to the Office of Disability 
Employment policy within the Department of Labor in this 
brochure that they have recently published about customized 
employment, which describes how no one who experiences a 
disability should be left out of the regular, competitive 
workforce. It is a way of customizing and negotiating with an 
employer about tasks that they need done, and matching that up 
with the particular tasks that an individual can do. By doing 
that customization or negotiation with the employer to assure 
that that person is providing productive capabilities and 
tasks, and getting those done, we believe that no matter what 
level of disability, anybody who wants to work can.
    Senator DeWine. The impediment to that, you have described 
it a little bit. I understand with the JWOD program, you have 
testified there might be some impediment because you might be 
taking the best workers out.
    Is that what you were saying?
    Mr. Lawhead. Yes, sir.
    Senator DeWine. But all the sheltered workshops are not all 
JWOD, are they?
    Mr. Lawhead. No.
    Senator DeWine. If I walked into a sheltered workshop that 
is not, what is the impediment to moving forward to what you 
are describing there?
    Mr. Lawhead. Well, it is really the same mechanism. Any 
sheltered workshop is primarily completing contracts. If it is 
not for the Federal Government, it is for private business.
    Senator DeWine. It is to somebody.
    Mr. Lawhead. Correct.
    Senator DeWine. They have to get a job done.
    Mr. Lawhead. You have to get a job done. You have time 
lines. You have quality control issues that you have to make 
sure you are completing. You have a deadline to get that out 
and to get it to that employer, no matter who it is, Federal 
Government or otherwise.
    In my experience, over the 20 years that I ran those kinds 
of programs, we found it was very difficult to place 
individuals into community employment and still run a sheltered 
workshop because they were at different purposes. You had that 
conflict of we need to keep our good workers in the workshop to 
perform these challenging contracts, and at the same time those 
were the very people that you felt you had to get out there in 
community employment because they had a high level of 
competence and skills.
    Senator DeWine. My time is up, and I would like to explore 
this with you further. The people, in my experience in Ohio, 
who run sheltered workshops are great people. I mean, these are 
people who want to help people. So part of it is, I guess you 
are saying, maybe a culture, a mind-set of what we can do and 
what our mission is. Is that it?
    Mr. Lawhead. Absolutely. As I have worked with programs 
around the country, I believe people are well-meaning. They 
have not had the technical assistance and training, the staff 
that is, that they need in order to assist people with severe 
disabilities in getting regular community employment. That is 
what it is a matter of in my mind.
    Senator DeWine. Thank you. My time is up. Thank you very 
much.
    Mr. Lawhead. Thank you.
    The Chairman. Thank you.
    Senator Dodd.
    Senator Dodd. Thank you very much, Mr. Chairman. I 
apologize for not being in the room at the outset of the 
hearing, but I thank you, Mr. Chairman, for conducting the 
hearing. This is the kind of oversight we need more of, and I 
commend you. You do this with some regularity, and it is 
worthwhile. The major functions of Congress is to be able to 
examine and look at various programs.
    Let me just take a minute or two, if I can, to share some 
opening comments, and if time permits, a couple of questions.
    You have examined two programs here that are close to 70 
years old that have done certainly a lot of good over the 
years. They provide important employment, development programs 
for individuals with disabilities; two programs that should be 
doing, in my view as well, much better. That is not unique by 
the way. There are plenty of Federal programs that are very 
good programs that are not living up to what they should be 
doing. So I hope as we look at this, we talk about how to make 
two programs work better, in my view, rather than to talk about 
dismantling something here because of the problems that exist. 
I begin with sort of that perception.
    Mr. Chairman, you have already laid out some of the 
troubling findings covered by your investigation. I am not 
going to rehash those points other than to say that I am deeply 
troubled by them as well. I think all of us would be. I think 
everyone in the room can agree that people with disabilities 
deserve a lot better than they are getting. They deserve 
greater and more comprehensive opportunities to become all that 
they can, and they deserve programs that do not enrich a select 
few at the expense of so many.
    I have often said throughout my career that a job is the 
most successful, social program ever invented by the most 
creative mind in the world, and has never come up with a better 
social program than a job, a decent job. It offers people the 
sense of self-respect. We talked about this yesterday on the 
floor of the U.S. Senate in talking about the importance of the 
minimum wage laws and other considerations, which the chairman 
was deeply involved in.
    As many in this room know, October is National Disabilities 
Employment Month, and sadly, however, many of us also know that 
more than 15 million individuals with disabilities between the 
ages of 16 and 64 are unemployed in this country. That is 
unacceptable in my view. Again, persons with disabilities I 
think deserve a lot better.
    Taken together, in my view, the Randolph-Sheppard and 
Javits-Wagner-O'Day employ 48,000 individuals with 
disabilities. I take particular issue with the fact that the 
JWOD program only exhibits a 5 percent out placement rate, what 
many would consider a regular job. I take equal issue with the 
fact that the Randolph-Sheppard program employs less than 1 
percent of the approximately 350,000 people of working age who 
are legally blind. Again, this is unacceptable.
    Jim Gashel, and I should say for purposes of truth in 
advertising, are friends. We have known each other a long time. 
My sister, who just retired after 41 years of teaching and who 
is a Montessori teacher and a public school teacher in early 
childhood development, is legally blind from birth. So I have 
more than just an intellectual acquaintance with these issues, 
but have watched someone make huge contributions, in my view, 
to literally hundreds, if not thousands, of kids over 41 years, 
who otherwise would not have been given a chance but for the 
fact that she had parents that could afford, years ago in the 
1930s and 1940s, to provide her opportunities which were not 
available to a lot of other people. So it makes a difference 
that I watched a legally-blind human being make significant 
contributions to the educational system of my State because of 
her work. And Jim, by the way, was tremendously helpful on a 
couple of occasions that he and I are very much aware of.
    Despite the findings, obviously, we have talked about, Mr. 
Chairman, I do not want to give the impression, in my view, 
that Randolph-Sheppard and Javits-Wagner-O'Day are not needed; 
I think they are. If I take anything away from the findings 
that have been presented is the fact that people with 
disabilities deserve more in expanded employment opportunities, 
not fewer chances, to achieve meaningful employment. We need to 
do all that we can to ensure that more have needed access to 
accredited and comprehensive employment opportunities. We 
should not let today's troubling findings dissuade us from our 
true objective, and that is securing the right of all 
individuals to accomplish what they are able to accomplish. So, 
again, Mr. Chairman, I thank you for allowing us to hold this 
hearing today and examine these issues.
    If I have a few minutes left, let me ask a couple of 
questions, if I can.
    Jim, let me ask you if I can. I would be interested to hear 
your response to those who ask why the Randolph-Sheppard 
program should not be expanded to provide management 
opportunities to all individuals with disabilities. Why should 
we not do it?
    Let me ask a follow-up question to this. Do you think there 
should be a requirement that a certain percentage of employees 
employed by the blind vendors are themselves blind or exhibit 
another disability, and how can blind vendors be encouraged to 
employ more individuals with disabilities?
    Mr. Gashel. Well, thank you very much Senator Dodd. I think 
those are excellent questions, and they need to be addressed.
    Let me just say something with regard to the Randolph-
Sheppard program and its focus on blind entrepreneurs. I said 
in my remarks that I personally feel that I have benefited very 
greatly as a blind person from the fact that we have a blind 
vendor program under the Randolph-Sheppard Act.
    In my written statement, I pointed out that as a young 
blind person growing up--I assume that Carolyn probably had 
some of the similar situations that I did--I looked around, and 
there were blind people weaving rugs. And I thought to myself, 
my gosh, that is what I am going to do, weave rugs. These were 
the only role models that I had. Now, blind people are relevant 
to me in terms of what they are doing.
    I like Tony Young; he is a friend of mine, but he has a 
different disability. So I have trouble understanding that when 
Tony is successful that I can necessarily be successful. I need 
role models as a blind person.
    As I grew up and graduated from high school, I became aware 
that we had about 30 blind entrepreneurs in my State, which was 
the State of Iowa. These were the most successful blind people 
in the State at that time. Now, I was never destined to be a 
small business owner or operator; not everybody can do that, 
Chairman Enzi, as you know. But I will tell you what; it did a 
lot of good for me to know that those 30 blind people could be 
successful business operators. It helped me to aspire to be a 
teacher, which is what I did. We did not have any blind 
teachers, but seeing blind people be successful in the public 
arena did it for me.
    I agree with what has been said about the sheltered 
employment. That would not have provided a role model for me 
that the Randolph-Sheppard program provided for me. So for me, 
the Randolph-Sheppard program is not so much about the 
employment opportunities that it provides to, I will say, too 
few blind individuals in the management of businesses, so much 
as it is to the role models that it provides for all of us who 
are blind, and I will say that symbols count. If it were a 
program for people with disabilities, the symbols would not 
have been relevant to me, and I might have ended up weaving 
rugs. I do not know. I hope not, but I might have. At that day 
and time, that is what a lot of blind people did.
    I knew Senator Randolph, and I know what he was trying to 
do. He was trying to explode the myth that blind people were 
good at menial, repetitive and sheltered jobs, and I think the 
Randolph-Sheppard Act explodes that myth.
    With respect to the employment of people who are blind or 
disabled by blind vendors, I think we can do better; I think we 
should do better. As I said, I think the U.S. Senate should do 
better. I would like to see a blind person serving in the U.S. 
Senate at some point. That is maybe our problem, not yours. I 
am not saying that to be critical of the Senate, or critical of 
blind vendors, or anybody else.
    I also think that most corporations in America can do 
better. Some people have said that blind vendors employ 5 
percent of their employees as blind or disabled. I think it is 
more like about 10 percent. The Department of Education's 
numbers, you cannot rely on anything they have told you, and 
they have not even come here to tell you. Let us say it is 
about 10 percent.
    If we could get every corporation in America, or if we 
could get every Federal contractor in America, to employ 10 
percent of its workforce as blind or disabled people, we would 
not have an unemployment problem for blind people; that is just 
a fact.
    [Applause.]
    I still think that blind people should do better, but I do 
not know why we should have a particular employment standard 
for people with disabilities when IBM does it, or pick your 
corporation. I think they should too.
    I do not want to go on too long, Senator Dodd, but let me 
just say that I do not share Senator Kennedy's confidence that 
the Americans with Disabilities Act has made the difference; it 
has not. Now, it has given us a right to go to court when we 
face employment discrimination, and we do that. The National 
Federation of the Blind brings employment lawsuits for blind 
people all the time, but it has not made American corporations 
model employers of blind people, or disabled people for that 
matter.
    I think we do need job creation programs in addition to 
nondiscrimination programs. But I do not think the job creation 
programs should be segregated, and I do not think the Randolph-
Sheppard Act is segregated.
    Senator Dodd. Thank you, Mr. Young.
    [Applause.]
    The Chairman. Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman. I thank the 
members of the panel for their testimony and want to, at the 
outset, associate myself with the remarks of the chairman in 
his opening statement; in particular, the reference to 
accountability.
    I noticed on the front page of USA Today there is an 
article regarding findings of the committee, and the number one 
contract was located at a military base in Georgia. Being from 
Georgia, I paid close attention to that. When we dealt with the 
problems associated with some corporate scandals in the early 
part of this decade, the result, of which was Sarbanes-Oxley, 
two things were true. One, all of corporate American ran under 
the bank for fear somebody might talk about them because of 
what was going on, and second, we ended up writing what was the 
best act we thought we could write at the time, but did so in a 
very sterile environment.
    Hopefully, with the finding of this committee and articles 
like this, as we reach out to try to bring about some 
accountability, we can get the good players in corporate 
America speaking out about what they are doing to promote and 
bring in the employment of people with disabilities at all 
levels.
    This leads me to a question of Mr. Lawhead. In Mr. Nelson's 
personal story and in your testimony, I took you to say the 
attitude of sheltered workshops was pervasive in terms of being 
recalcitrant in moving people forward, but in fact they were 
motivated to keep them in the shelter.
    Did I get that right?
    Mr. Lawhead. Yes, sir.
    Senator Isakson. This may be a stupid question, but I am 
going to ask it.
    Sheltered workshops blossomed in the 1960s and the 1970s. 
That was before the U.S. Supreme Court ruling that brought 
about IDEA. It was before the Americans with Disabilities Act. 
Is part of that environment the culture of sheltered workshops 
from when they were born?
    Mr. Lawhead. Absolutely.
    Senator Isakson. This is going to beg a long answer, and I 
have another important question, so do not be long.
    Mr. Lawhead. All right.
    Senator Isakson. What can we do to change those incentives, 
which, from what you said, tended to reinforce keeping people 
in, and changing it the other way to promote bringing people 
in, training them, and moving them out. What would you do?
    Mr. Lawhead. Well, I can tell you what I did.
    Senator Isakson. OK.
    Mr. Lawhead. We basically made a strong commitment for 
mission change, and the mission change was no longer to focus 
on providing contract employment for the people we represented, 
but instead was to focus entirely on placing those individuals 
into regular community and individualized employment.
    Without that kind of commitment--as agencies go through 
this, we talked about values clarification where staff have to 
get into the frame of reference, and families and individuals, 
that the segregation and discriminatory practices that occur in 
sheltered workshops just do not make any sense. It really is a 
value shift to move in that direction. You have to prioritize 
community employment over those sheltered workshop operations.
    Senator Isakson. The sheltered workshop I have done so much 
work with in my State. The Tommy Nobis Center is a great center 
and they do a great job. We have had quite a few Government 
contracts, but a lot of private sector ones too.
    Would it be helpful when, say, IRS--which is a major 
contractor with sheltered workshops in a lot of areas--
contracts with the sheltered workshops, as part of the 
accountability, for them to ask the question, what percentage 
of your employees are you moving forward outside of the 
shelter? With us starting to ask those questions of the 
Government, maybe that will promote an attitude change in terms 
of the sheltered workshops.
    Mr. Lawhead. I think certainly asking that kind of question 
and determining the level of outplacement is a good first step. 
I think it kind of begs the question of major reform. Sheltered 
workshops and JWOD, because of the legislation, segregate 
people and congregate people. Until that legislation is 
changed, you are going to continue to have the same problem.
    In my opinion at least, it is not something that can be 
fixed by asking people to do a better job of outplacement. The 
way it needs to be fixed, in my mind, is if you have a group of 
people working at IRS through a community rehabilitation 
program supported by JWOD, instead of being in a group in that 
setting at IRS, you disperse those individuals throughout the 
company so they are in individualized kinds of employment 
situations so that the stigma that attaches people from being 
congregated goes away.
    What we are really talking about is IRS hiring people, not 
IRS contracting with a sheltered workshop or other community 
rehab provider. There is a real lack of incentive on the part 
of the agency to do that because they lose the overhead. So it 
really is a fundamental change, I believe, that is going to get 
you going in the right direction.
    Senator Isakson. That is an excellent observation.
    I know my time is up, Mr. Chairman, but I wanted to make an 
observation myself. I missed one testimony. I apologize.
    Jim Gashel, I am sorry. I was voting when you were 
testifying, and I apologize. You may have said something about 
this.
    One of the real breakthroughs in mainstreaming people with 
disabilities into the workforce is assisted technology, in my 
humble opinion, because there are so many people with 
disabilities. We need to be doing all we can do, through the 
Department of Education and through programs that we generate 
here, to make assisted technology as reachable, and affordable, 
and accessible to people with disabilities as possible. If we 
do that, we will probably help the employment of people with 
disabilities more than any other single thing we could possibly 
do. That is just a statement I wanted to have for the record, 
and I appreciate the time, Mr. Chairman.
    The Chairman. I am going to do a second round of questions, 
and everybody else is invited to do a second round as well, if 
they wish to. The reason I have to do that is, first of all, I 
did not get to ask Ms. Gashel and Mr. Young any questions. 
Second, so far what we have done is given excuses; we have not 
got to solutions.
    One of the things that happens with Congress, I have 
noticed, is when a problem gets to a certain level, we react. 
There is a rule of Congress--and it happens in legislatures as 
well--and that is, if it is worth reacting to, it is worth 
overreacting to. That is why we are holding this hearing, is to 
find some solutions that are not in that category of 
overreacting. It is fine, and it is really important that we 
are saying that businesses, Congress and everybody else ought 
to be taking a look at opportunities that they have for people 
that are disabled and people that are blind.
    We have two organizations out there that we have built that 
are charged with that, and I think they are failing miserably 
at their job. I just want to know how to fix it; not how to 
break it, how to fix it. I think we have some people here that 
have some expertise on how we can fix it.
    There are two parts of the problem that are bothering me, 
and I am going to ask Mr. Gashel and Mr. Young to comment on 
this. The two parts are, first of all, how few out of the many 
are being served by the program? I know that they serve as role 
models. I heard that, but I want more role models out there. I 
heard the numbers, that the average of these entrepreneurial 
businesses only makes $40,000 a year.
    Now, our investigation did not go far enough into this to 
be able to tell--I am an accountant, so I like all those 
numbers. But when you are dealing with nonprofit, sometimes 
those numbers do not ring quite true because what is given out 
as executive compensation is a cost, so it does not allow for 
as much profit. I mentioned some numbers, and most of the 
numbers were in the JWOD program, in excess of $300,000 for the 
CEO. I am concerned with not enough people with disabilities 
and the blind being hired, and then executives making large 
amounts of money, particularly compared to doing the job that 
the money is supposed to come from.
    Would either of you like to comment on that? I am looking 
for solutions.
    Mr. Gashel. I definitely would. First of all, let us talk 
about the compensation. The profits in the Randolph-Sheppard 
program, that is a figure of about $40,000 average for blind 
vendors in the program. These are not Government executives or 
nonprofit executives; these are entrepreneurs. So that is 
distinct from the JWOD program. I just wanted to make sure that 
you understood that. Now, some of the blind vendors make 
substantially more money than that and some of the blind 
vendors obviously make less money than that, so you come up 
with an average of $40,000.
    I read in the USA Today--and Senator Isakson referred to 
the contract in Georgia, and this is Fort Benning--that the 
blind vendor in operating that contract for the Randolph-
Sheppard program, that that is a $1.2 billion contract. Well, 
that sounds like a lot of money. They kind of implied that the 
blind vendor is making all the money, which, of course, is not 
true. You understand the difference between gross and net. 
Also, they did not tell you that it is over 10 years. That was 
the aggregate number of the blind vendor contracts in military 
troop dining, not just Fort Benning.
    NISH, by the way, I believe has something like almost $3 
billion worth of contracts in military troop dining over 10 
years. They certainly have $209 million over a single year, and 
the Randolph-Sheppard program would be about half of that in 
military troop dining.
    The military troop dining blind vendors--and there are 39 
of them--do make more money than the average blind vendor 
would. They should. These are high-end locations. When Congress 
amended the Randolph-Sheppard Act in 1974, it said that part of 
the goal was to enable blind vendors to achieve their maximum 
vocational potential. So, undoubtedly, there will be some 
people who will fall out at the high end of the scale. I would 
not consider these to be windfalls to say that a blind person 
is making an income of $100,000, or $200,000, or $300,000, or 
$400,000 if they are entrepreneurs.
    By the way, I want to get to your point about more 
employment of blind and disabled people in the businesses. I 
certainly think that is a valid point. There are two instances 
where Randolph-Sheppard blind vendors have taken over contracts 
for military troop dining services that were formerly operated 
under the NISH program. The two instances are Kirtland Air 
Force Base in New Mexico and Fort Carson, CO. That is just a 
recent change in Fort Carson, CO.
    But in both of those instances, the number of employment 
positions for people with disabilities is up. I think Fort 
Carson is exactly the same as it was before the blind vendor 
took over, so in the first one, though, it is up. In both 
situations, the wages and the level of management 
responsibility for blind and disabled workers is up.
    We have advocated in the last couple of years, in the 
Congress, that in the case of military troop dining contracts, 
that blind entrepreneurs should be the prime contractors and 
there should be subcontracts with the Javits-Wagner-O'Day 
program. NISH has not ever agreed to that.
    The Chairman. I was not going to get into that. You are not 
helping me----
    Mr. Gashel. OK. I am trying to.
    The Chairman [continuing]. By playing two organizations. 
And you are not giving me solutions on how we can get more 
people, that are supposed to be taken care of by the program, 
into the program.
    Mr. Gashel. I would say on that----
    The Chairman. No, I am not going to allow you to finish the 
statement because you have already used up 7 minutes of my 
time, and I am only allotted five.
    Mr. Gashel [continuing]. Sorry.
    The Chairman. And I do have to give Mr. Young a chance to 
answer on that. But as I said, I am going to submit some 
written questions because I have to get more answers than I am 
getting here, or there will be difficulties for the programs. 
We have these programs established, and we are giving a special 
benefit to people by protecting that market for them, and then 
not getting the results that we are expecting. That is the kind 
of thing that causes reaction and overreaction around here. I 
am disturbed by the numbers, and I am trying to find some 
solutions so that we do not get into that kind of a situation.
    Mr. Young.
    Mr. Young. Senator, you asked for some possible solutions. 
I think that there are many strategies and approaches that are 
evolving and coming into the mainstream of what we do that will 
really help here.
    NISH has started over the last couple of years to try to 
adopt many of these: the use of assisted technologies to 
improve the productivity of people who are working on our 
contracts; the use of rehab engineers to re-do the way work is 
done so that more people can do the work that is currently 
being done by disabled people and do more work than is not 
being done by disabled people now.
    We have started to use customized employment to take the 
contract as a whole, and instead of breaking it down by tasks, 
breaking it down into its elemental form, so that we can then 
take the best abilities of people with severe disabilities and 
deliver the products and services in that way.
    There are lots of different ways that we think we can start 
using some of these things. We are going to start a pilot 
program next year that will allow a person with a disability 
instead of working on a contract as direct labor, do that work, 
perform that work under a subcontract with the nonprofit 
agency, and then let them develop entrepreneurial skills.
    The Chairman. Thank you. I thank you both for your brevity 
and for the ideas that you generate. That is what I am looking 
for, and everybody will have an opportunity to provide some of 
those in writing for me. I do think a part of the problem is 
the lack of information and a lack of understanding of what can 
be done and how that can be accommodated. If we can get more 
information on that, I think we can solve some of this problem.
    Senator DeWine.
    Senator DeWine. Well, let me expand the chairman's question 
to all the members of the panel and actually even go a little 
further. Let me ask all the members of the panel, anyone who 
would like to answer. What else you think we should be doing, 
here in Congress and the Federal Government, to deal with what 
I talked about at the beginning, what the chairman talked 
about, and other members have talked about? That is the big 
picture problem, which is the challenge with the fact that 
there are so many disabled Americans who do not have jobs. Who 
would like to add to what we have already talked about? We have 
already talked about some things. Some of you have responded to 
Senator Enzi. The field is open, and I have 4 minutes and 20 
seconds.
    Mr. Gashel. I am going to be very brief. I think, for one 
thing, the Javits-Wagner-O'Day Act could be opened up to 
disabled-owned businesses and businesses owned by blind people. 
That is one thing that can be done. The bill that is proposed 
by Senator Roberts and Senator Kennedy for Federal contracting 
preferences for people who receive Social Security disability 
or supplemental security income so that they can operate 
businesses and have Federal contracts is another solution. I 
think these would be very effective job creation tools.
    Senator DeWine. Anybody else? Mr. Young.
    Mr. Young. Senator, I think we do not hold all Federal 
contractors, for-profit and nonprofit, to a standard of hiring 
people with disabilities and blindness. We know that there has 
been an encouragement, but a weak encouragement for contractors 
across the Federal Government. If we have any movement of 
hiring of people with disabilities by these Federal 
contractors, we would make a dent in our problem.
    Senator DeWine. Mr. Lawhead.
    Mr. Lawhead. In my mind, the JWOD legislation really needs 
to be changed because what you have happening right now with 
the JWOD projects is that, by the legislation, they need to be 
segregated. Although Mr. Young referred to the fact that many 
of the jobs are in Federal installations and are 
``integrated,'' the way they are integrated is perhaps the same 
way that you would integrate a school of all white children, 
and put a single classroom of African Americans in it, and say 
that is integrated. That is not integrated.
    JWOD really demands segregation, whether it is in sheltered 
workshops or it is in those work crews that are provided on 
those Federal installations. Without changing the way that 
legislation works, you are not going to get----
    Senator DeWine. How would you write the legislation, then?
    Mr. Lawhead [continuing]. Well, the legislation, I believe 
you would want to have written so that you got down to natural 
proportions of people with disabilities. The legislation 
currently requires that 75 percent of the individuals 
experience severe disabilities within any agency that is 
contracting. Bring that down to the national incidence of 
disability in the United States, which is 18 percent, and 
perhaps talk about a range of 10 to 20 percent of a particular 
contracting entity. Use that kind of percentage, and then 
basically design the implementation of that so that people are 
integrated individually within those settings; not congregated 
together as they currently are, but integrated throughout that 
business in individualized kinds of jobs. If you use that kind 
of combination instead of the current 75 percent that is 
required by the legislation, you would come closer to hitting 
something that would make some sense I think.
    Senator DeWine. Well, I assume you would also change the 
list of jobs, then.
    Mr. Lawhead. As in the current food service and janitorial 
kinds of jobs, you mean?
    Senator DeWine. Well, what is JWOD now?
    Mr. Lawhead. Mr. Young could----
    Senator DeWine. What is covered now, would you change that? 
I am asking you the question.
    Mr. Lawhead [continuing]. Well, it is my understanding that 
the JWOD program is opened to any Federal program that may 
contract. It is tended to go more toward food service and 
janitorial kind of things.
    Senator DeWine. But where would it go, though, do you 
think, if you did that?
    Mr. Lawhead. I do not know.
    Senator DeWine. You do not know. What would happen, I 
guess, the predictability?
    Mr. Lawhead. Well, in my mind, you would perhaps have the 
same kinds of installations, having those contracts as you do 
now, but people, instead of being congregated, would be 
integrated. It may in fact open up the Federal contracting 
piece to more entities like IRS and white collar kinds of jobs 
within Federal Government and allow for that, it would seem to 
me.
    Mr. Young. Senator, if we were to do that----
    Senator DeWine. My time is up. Mr. Young, if you would be 
very brief. Go right ahead, sir.
    Mr. Young [continuing]. If we were to do that, we would 
have to immediately get four times as many contracts as we have 
now, and we are perfectly willing to do that. Absolutely, we 
would do that. I would also suggest looking not at just direct 
labor. If we are going to make real opportunities for folks 
with disabilities, let us talk about supervisors, then 
management, and other kinds of opportunities as well.
    Senator DeWine. Thank you, Mr. Chairman.
    The Chairman. Senator Dodd.
    Senator Dodd. Thanks, Mr. Chairman, and I will be brief. I 
appreciate these last series of questions. In fact, they are 
the very questions I was going to raise. So I will second the 
chairman's request, along with that of Senator DeWine. The 
issue of statutory fixes in JWOD are important, and I suspect 
all of you may have some ideas and suggestions. I appreciate 
the suggestion made already here. That would be very, very 
helpful to get if we could. And then the question obviously, of 
what compromises can be struck here.
    As I mentioned earlier, Jim Gashel and I are old friends. 
We have done a lot of legislation together over the last 20 
years or so. I know Jim feels this way, as I do. I am inspired 
by role models, not only within the blind community, but 
obviously in a family setting, inspired by a sister who I 
watched achieve great success in her career. But I am inspired 
by Kate, and I am inspired by Michael as well, and you, Mr. 
Young, for what you do. I think it is important that symbols 
within the disability community offer inspiration to people 
with a variety of disabilities that exist.
    So it is going to be important, it seems to me, that we try 
and work out these compromises. With all due respect here, this 
is a 70-year-old piece of legislation. It has been modified in 
1954 and 1974. It is now the 21st century, and we have to be 
able to have a 21st-century solution to some of these ideas, 
and I think you are going to find a commonality of purpose in 
that goal.
    I would really hope that the suggestion that the chairman 
has made--I do not have to submit a written question. We want 
to know what is the compromise. We want to know what common 
ground can be found so that we can expand and enhance these 
wonderful ideas that have served three generations now--or two 
generations--of Americans under various stages and different 
circumstances. The circumstances in 2005 are certainly 
different than they were in the 1930s. Some things remain 
constant, but a lot of other things have changed, and I think 
we all want to accommodate those changes if we can by reaching 
some understanding here rather than picking sides. I do not 
think any of us feel comfortable with picking sides here at 
all. So I underscore the chairman's request.
    Let me raise one issue that Senator Kennedy wanted to raise 
and apologizes for not being able to get back here. He asks 
this of Mr. Lawhead, and, Bob, to you too, respond to this, and 
others who want to comment on it.
    The question is, what role does Medicaid play in this whole 
debate, and how is it different in sheltered work versus 
supported employment, and what is your perspective on the 
Medicaid Day Habilitation benefit?
    Mr. Lawhead. The home and community-based waivers in the 
Medicaid program fund the majority of during-the-day services 
for people with severe disabilities, largely people with mental 
retardation and developmental disabilities. We, in my mind, 
ought to be looking at what the ADA has stated and Olmstead 
clarified when it talked about using public dollars to support 
programs in environments that are the most integrated possible.
    We are just not meeting that standard in any way at this 
point in time. We have over a million people segregated when 
they do not need to be. So that Federal Medicaid program, the 
waiver program, that funds the majority of those day services 
presently, could be modified, or the requirements for that 
could be modified to push us in the right direction to get us 
integrating people into a most integrated setting as opposed to 
the current segregation and congregation that we have 
throughout the United States right now.
    Senator Dodd. You made obviously a suggestion here with 
this, but I would be interested in some proposals on how we 
might actually achieve that. I would be interested in that. I 
think Senator Kennedy would as well.
    Mr. Chairman, thanks for the hearing. This is very 
worthwhile. And I am very grateful to the audience. There is 
another room as well, but having people come here to be a part 
of this discussion is tremendously helpful. For those of you 
who have made the journey to be here today as part of this 
discussion debate, I certainly welcome your presence here. It 
means a lot to have you in the audience. It demonstrates a 
commitment and concern about this beyond the leaders of 
organizations talking. I thank you very much for your presence. 
Thank you.
    [Applause.]
    The Chairman. Thank you.
    Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman.
    Kate, I am going to ask you a question you are never 
supposed to ask a lady. How old are you, Kate?
    Ms. Bartlett. I am 20 years old.
    Senator Isakson. You are 20 years old. Tell me about your 
elementary and high school education. Where did you go to 
elementary school and high school?
    Ms. Bartlett. I went to Arlington High for high school, and 
Bishop School.
    Senator Isakson. Ogden High? Was that what you said?
    Ms. Bartlett. What?
    Senator Isakson. What was the high school?
    Ms. Bartlett. Arlington High.
    Senator Isakson. Was Arlington High a public school?
    Ms. Bartlett. Yes, it was.
    Senator Isakson. Were you in IDEA? Were you in special 
education? No?
    Ms. Bartlett. Well, not really.
    Senator Isakson. Not really?
    Ms. Bartlett. I had an assistant teacher that helped me 
out.
    Senator Isakson. OK. You had an assistant teacher to help 
you out.
    Here is my next question. You started out in Lesley School, 
and after the first semester you went to Middlesex, right?
    Ms. Bartlett. Yes.
    Senator Isakson. Now, Lesley, in your testimony, you were 
in the Threshold program.
    Ms. Bartlett. Yes, I was.
    Senator Isakson. That was for learning disabilities, right?
    Ms. Bartlett. Yes.
    Senator Isakson. Now, Middlesex is just a regular community 
school, right?
    Ms. Bartlett. Yes, it is.
    Senator Isakson. Here is my question. You used the greatest 
three-letter phrase; ``I am happy.'' You said I am happy about 
three times in your testimony. And I think all of us recognize 
what Senator Dodd said a little bit ago. The best happiness 
program in the world is a job. The best solution to most of our 
problems in the world is a job. And for you, you are happy at 
Middlesex.
    Was it because you are mainstreamed--I guess is the right 
word--amongst all kinds of regular folks and not in a special 
program? Does that give you some empowerment and some 
excitement that you did not get at Lesley?
    Ms. Bartlett. Actually, it kind of did.
    Senator Isakson. That is what I found from lots of folks in 
special education and what mainstreaming really did because it 
puts people that may have a difficulty or a disability in the 
same environment with people that do not. And the people that 
do not are inspired by the people that have the disability, and 
the people that have the disability are empowered by the people 
that do not.
    Everybody skipped over you because you were so smart and 
your testimony was so good. I just wanted to kind of come back 
to you and encourage all the members to read what Kate said 
because what she said and how she said it in her life's story 
is a good example of the positive result that mainstreaming 
has. And, Kate, I want to commend you on that.
    Senator Dodd. Amen to that. That is a very good point to 
make.
    [Applause.]
    Senator Isakson. I yield back my time.
    The Chairman. Senator Ensign.
    Senator Ensign. I think that we should note this time in 
history, when a senator actually yield back time.
    The Chairman. Yes.
    [Laughter.]
    Senator Ensign. I am sitting here in shock.
    Thank you, Mr. Chairman. Thank you for holding this hearing 
today. I think that today's hearing, unfortunately, is 
indicative of too much of what has been going on; the fighting 
that has been going on between interest groups instead of 
people working together, trying to come up with solutions.
    All of us have the same goals, and those goals are to help 
people that have some type of a disability have a more 
fulfilled life. I personally believe that God made each and 
every one of us with some kind of innate desire and need to 
work. The more that we can fulfill that need and desire to work 
for people just gives a lot more people a higher quality of 
life.
    We should always keep that in mind as our goal. The blind 
groups fight with the NISH people and back and forth. We have 
to back up and say, how can we get the ultimate goal in getting 
the most people to work, to have them have the most fulfillment 
in life? That is really what my goal is in all of this.
    The reason we study statistics, Mr. Chairman, is because we 
are seeing which programs are working to help the most people. 
There is a limited amount of dollars, and we are to be good 
stewards for the taxpayers. So we look out there and say, okay, 
which programs are working the best to try to maximize the 
dollars that we have. That is really what we are after.
    Having said that, I am in a little bit of a quagmire here, 
because, as you know, it depends on who you talk to as to what 
answers you get.
    Mr. Lawhead, you have talked about the need for getting 
people into mainstream employment like we have done in schools. 
In 2005, JWOD had a survey, which found that over 75 percent of 
their employees, even in the sheltered work areas, were very 
satisfied with their jobs. We want to provide more 
opportunities for people. I am just kind of curious as to how 
we provide more opportunities when some people may not be able 
to be mainstreamed.
    I absolutely love the idea of mainstreaming, whether it is 
in schools or employment, but there are just some people who 
need to stay in programs longer than others. And they may have 
the same kind of disability, but because of whatever emotional 
issues or their background, they just may not be able to 
transition as rapidly, if ever. That has just been my own 
personal experience with this.
    If you can address that, the satisfaction level, the 
difficulties with mainstreaming, and how we get more people to 
that goal of being in the regular workforce.
    Mr. Lawhead. When I polled the 200 people that were in our 
programs in Boulder County in 1989, 95 percent of those who 
were still in a sheltered workshop at that point said that they 
were satisfied with that. I beg your pardon; 75 percent said 
they were satisfied and felt good about working in that 
sheltered workshop; 95 percent said they liked their 
supervisor. Those are pretty strong statistics.
    As those same individuals got community employment 
experience and were asked the question, do you prefer the 
sheltered workshop segregated setting or do you prefer being 
fully integrated in the community, after getting experience of 
a 7 year period, 100 percent of them said I prefer being in 
regular community settings.
    Senator Ensign. What percentage of people, do you think, 
who are in the sheltered workshop setting can actually go into 
the regular work setting?
    Mr. Lawhead. One hundred percent, clearly.
    Senator Ensign. You believe 100 percent can.
    Mr. Lawhead. Absolutely.
    [Applause.]
    Senator Ensign. Before you go on, Mr. Young, what is your 
opinion on that?
    Mr. Young. I would agree with him. I think the vast 
majority of folks can work in the community.
    Senator Ensign. So how do we do it? That is what I think 
the chairman was trying to get out earlier.
    Mr. Young. It is going to take substantial resources to do 
it. We do not, in this country today, have the infrastructure 
of training people, of personal assistant, job coaches, other 
kinds of long-term support personnel, training personnel to 
support moving everyone into community employment.
    It would take a while, but we would do that in a heart beat 
if we could change the funding streams, change the funding 
sources, give us the employers who will employ folks with very 
severe disabilities, very significant disabilities. It is going 
to take a sea change, not just in the laws that are on the 
books, but the providers that are implementing the laws and the 
employers who will have to, at the bottom line, employ folks in 
a global economy where productivity is the essential character 
that they are looking for both from their human capital and 
their machines, and their intellectual capital. It would take a 
complete sea change. And believe me, every person in this room 
would be willing to do it if we could get the resources to do 
it.
    Mr. Lawhead. Senator, may I? I respectfully would have to 
disagree with what Mr. Young is saying. What cost benefit 
studies have shown, studying I believe 27 studies over the last 
25 years that were looked at and compiled around the cost 
benefit of community-integrated employment, was that after a 4 
year period, there is a definite cost benefit to having people 
employed in community settings over these kinds of sheltered, 
segregated settings. Now, it is not to say that that could all 
be done rapidly without more money, but we could use existing 
dollars today and, in fact, be saving. We could have cost 
savings from the number of dollars that are spent today, and 
over a period of time have everybody in community settings.
    There is a guy up at Oshkosh, Bob Samara, who has compiled 
these studies and continues to analyze these things. What he 
found is, although there are some initial up-front costs, after 
4 years, community employment programs are always more cost 
beneficial than these sheltered, congregate kinds of settings. 
So we could do it on existing dollars. We could not do it 
rapidly, but we could gradually move in the right direction, 
and certainly that is my recommendation because I know we do 
not have any more money at this point.
    Senator Ensign. Mr. Chairman, my time is up. It would be 
very good for the committee to get the recommendations from all 
of you on how to do that and if there are programmatic changes 
that need to be made by this committee. The one thing you have 
seen today is this committee, especially on these programs, can 
be very bipartisan because we all have the same goals in mind. 
So we would love to work with you all in trying to solve some 
of these problems.
    Thank you, Mr. Chairman.
    The Chairman. Thank you. I want to thank all of our 
witnesses for their testimony. I know some of you had to travel 
long distances to be here today, and the information you shared 
in your attendance is really appreciated. The record will 
remain open. We have a number of hearings that are always going 
on at the same time, and that kind of cuts into attendance. But 
the people who are not here sometimes wish to submit not only 
their statement, but some questions. After they look at what we 
have asked about and the answers are given, they may still have 
some questions. I have some questions left over too. Several of 
them are more detailed, and I would not try to get an answer on 
the spot from any of you in that respect. So the record will 
stay open for 10 days, and if you would provide us with answers 
as early as possible, if you get some questions, I would really 
appreciate it.
    I do look forward to working with Senator Kennedy and the 
others on the committee to find solutions to the problems that 
we have raised today. Among the options that we should consider 
in addressing these problems are whether there should be a 
single program instead of two programs, and how we can get 
benefits best provided by these two programs to all persons 
with disabilities; what incentives will be necessary to create 
more integrated, competitive employment; and what outcomes 
would be required to hold those programs more accountable with 
the people with disabilities.
    So we are looking for answers. We are not doing anything in 
a hurry. We do have a Web site as well. I appreciate all the 
people that came here today. You probably have some ideas that 
the people who testified have not had. We need your solutions 
too. We try to make this as open a program as we possibly can. 
Get us your ideas any way you can.
    The reason I mentioned the Web site is that it is faster 
than the mail. If you mail us something, because of the 
security we have at the Capitol, it could take us 6 weeks to 
get it, and the record is open for 10 days.
    Mr. Nelson. Mr. Chairman, may I have permission to speak?
    The Chairman. Certainly.
    Mr. Nelson. From what I have seen in the last 15 years, 
since I was in the workshop, one of the things I have noticed 
is that the managers who run these workshops--this has nothing 
to do with Bob here, but where I live in Greeley, there are 
people who could work out in the community. And I must say that 
I get very offended when they tell me that I belong in a 
sheltered workshop.
    Well, I am not getting an education if I am in a segregated 
setting like I would be in school. I think we need to change 
people's outlook. I have seen sheltered workshops run like, let 
us say, a Federal or State penitentiary because that is the way 
they pay people. When I got in, I had no clue whatsoever, in 
the name of God, what I was getting into. I feel like that I 
have been lied to, cheated. I have been out of work most of my 
life just because of what people believe.
    The Chairman. I think you did an outstanding job in your 
written testimony as well as your presentation, and we do thank 
you for your comments. We will see what solutions we can come 
up to for that too. Thank you very much.
    There must be somebody in the audience named Laurel Henry. 
I was supposed to be meeting with Laurel about 30 minutes ago. 
That is a person from Wyoming, so it is very important. I will 
be back at my office about 10 minutes after this is over. That 
is a message for Laurel.
    I thank everybody for their indulgence, information, and 
attendance. The hearing is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                   Prepared Statement of Jim Gibbons

                  EXECUTIVE SUMMARY OF RECOMMENDATIONS

    On October 20, 2005, the Senate Health, Education, Labor, and 
Pensions (HELP) Committee held an oversight hearing on employment 
programs for people with disabilities. During that hearing, Chairman 
Enzi and other members of the committee expressed concern about how few 
individuals are being served by the two existing Federal programs: 
Randolph-Sheppard and JWOD. They questioned the accountability of the 
programs and whether people who are blind or severely disabled were the 
true beneficiaries of these programs. Finally, they questioned whether 
programs for the blind and severely disabled were providing the type of 
meaningful employment that will allow individuals to fully integrate 
into society.
    Following is a summary of National Industries for the Blind's 
recommendations for increasing employment opportunities for people who 
are blind or severely disabled; for assuring the accountability of 
organizations providing employment opportunities; and for enhancing the 
social and economic integration of people who are blind or severely 
disabled. Our full comments follow the summary.

I. Increasing Employment Opportunities

     Legislatively establish a minimum 5 percent goal for all 
Federal agencies for contracting with nonprofit agencies under the JWOD 
program. In addition, legislatively establish a 5 percent goal for 
subcontracting with nonprofit agencies under the JWOD program by all 
prime contractors for contracts exceeding $500,000. These two goals 
would support an estimated 330,000 JWOD jobs for people who are blind 
or severely disabled.
     Enhance the Committee for Purchase's ability to enforce 
the current procurement requirements of the JWOD program and support 
the committee by establishing mechanisms for addressing non-compliance 
by Federal agencies and employees. We estimate that this will create 
employment for an additional 1,000 people on existing contracts.
     Legislatively establish a goal of 2 percent employment for 
people who are blind or severely disabled by private-sector companies 
and provide tax incentives for achieving and exceeding those goals. We 
estimate that this will generate employment for 2,000,000 disabled 
people.

II. Accountability

     Call on the Internal Revenue Service to rigorously enforce 
the provision in the Internal Revenue Code of 1986 calling for 
intermediate sanctions for excessive executive compensation within 
nonprofit organizations.
     The recommendations of the nonprofit panel convened by 
Independent Sector given to the Senate Finance Committee in June 2005 
should be adopted.

III. Social and Economic Integration

     Include incentives in the JWOD Act to encourage nonprofit 
agencies to aggressively recruit qualified blind individuals for 
executive positions and to put programs in place, like the NIB Business 
Leaders Program, to identify blind employees with leadership potential 
and provide them with training and opportunities to move ahead.
     Include incentives in the JWOD Act to increase wages and 
opportunities for upward mobility for blind employees to enhance their 
economic independence leading to further integration into the economic 
mainstream of society.
     Include incentives in the JWOD Act to increase service 
contracts under the JWOD program for people who are blind. ``White-
collar'' job opportunities from service contracts, such as responding 
to calls to the EPA's National Lead Information Center or serving 
customers at retail supply centers in Federal office buildings or on 
military bases, provide employees with higher wages and greater 
opportunities to interact with a diverse group of individuals in the 
workplace.
     Legislatively require the Rehabilitation Services 
Administration (RSA) to ``count and support with vocational 
rehabilitation (VR) funding'' as ``employment outcomes,'' also known as 
``26'' closures, jobs within NIB associated agencies that are based on 
the individual's informed choice, pay minimum wage or better, and offer 
employee benefits and opportunities for upward mobility. In order to 
open JWOD employment opportunities to more blind people, the RSA needs 
to recognize and support the good jobs, wages and opportunities 
available through the JWOD program.
     Reward States that have the highest number of ``26'' 
placements into JWOD program jobs (and where people stay on the 
employment rolls for at least 1 year) with additional funding in the 
next fiscal year. The funding would come from States with the lowest 
number of ``26'' closures.
     Carry out a national demonstration program to replace the 
``earnings cliff'' with a gradual reduction of an individual's monthly 
benefit checks when they exceed the ``substantial gainful activity'' 
level. If SSDI beneficiaries were to lose only $1 for every $2 over the 
SGA limit, many more would be willing to accept higher-paying service 
contract and manufacturing jobs.
                                 ______
                                 
    My name is Jim Gibbons and I am the President and Chief Executive 
Officer of National Industries for the Blind (NIB), a not-for-profit 
organization, with more than 80 associated agencies across the country 
employing nearly 5,000 people who are blind. Prior to joining NIB, I 
was President and Chief Executive Officer of Campus Wide Access 
Solutions, a wholly owned subsidiary of AT&T.
    I began losing my sight at the age of 8 due to a macular 
degeneration and was totally blind by the time I was a sophomore in 
college. I received my undergraduate degree in industrial engineering 
from Purdue University and attended the Harvard Graduate School of 
Business Administration, where I was the first blind person to graduate 
with a Harvard MBA. Being both a business person and a person who is 
blind, I bring both my management skills and my perspective on 
achieving success as a blind individual to my leadership 
responsibilities at NIB.
    NIB enhances the opportunities for economic and personal 
independence of persons who are blind, primarily through creating, 
sustaining and improving employment. NIB operates under the Javits-
Wagner-O'Day Act, a Federal procurement program, enabling people who 
are blind to work and provide products and services to Federal 
customers. By harnessing the demand and purchasing power of the Federal 
Government, NIB and its associated agencies supply Federal markets with 
a selection of more than 3,000 quality products and services under the 
trade name SKILCRAFT manufactured and provided by people who are blind 
at more than 80 associated agencies, across the Nation. NIB associated 
agencies employ more than 5,000 people who are blind per year; pay more 
than $80 million per year in wages and benefits for full- and part-time 
employees who are blind; offer rehabilitative services to about 125,000 
children and adults who are blind; operate over 125 base supply 
centers; and deliver millions of dollars worth of quality products and 
services to Federal, State and commercial markets per year.
    Like other businesses, NIB and our associated agencies must deliver 
quality products and services on time at competitive rates. To 
accomplish this, NIB mentors and supports our agencies with business 
development; product and service research and development; program 
management; distribution channel development and support; marketing; 
sales; and contract administration. However, unlike other businesses, 
NIB-associated agencies must generate at least 75 percent of their 
direct labor hours by persons who are blind. The engineering arm of NIB 
works with agencies to recommend workplace accommodations and adaptive 
technologies, manufacturing processes, job reengineering, feasibility 
studies, quality control and training. This enables associated agencies 
to modify jobs, equipment, processes and workflow to establish 
employment opportunities and to train employees who are blind.
    NIB and our associated agencies gauge the Federal demand for 
specific products and services and adapt their operations to 
accommodate employees who are blind, and supply the Government with the 
products and services it demands. Similar to all Government 
contractors, associated agencies meet the same provisions for quality 
and contract requirements. They offer good wages and fringe benefits, 
meet Department of Labor and other workplace regulations and offer 
upward mobility and placement opportunities.
    In addition to employment opportunities, NIB-associated agencies 
provide people who are blind with rehabilitative services, such as 
early childhood intervention, adult literacy, low vision examinations 
and aids, Braille literacy, nutritional/health services, occupational/
physical therapy, personal and career counseling, recreation, 
transportation, mobility, daily living skills, employment training and 
more.
    NIB's strategy for moving forward includes plans to further 
diversify the types of jobs available to people who are blind; to 
create JWOD product and service awareness within Government agencies; 
to aggressively market products and services; to generate public and 
private partnerships; and to provide technical and financial services 
to our associated community-based agencies. As the service industry 
rapidly expands in the United States and new technologies continue to 
emerge, NIB will continue expanding new and exciting career 
opportunities for people who are blind.
    On behalf of NIB and its associated agencies, I want to take this 
opportunity to respond to three major areas of concern raised by 
committee members and panelists during the October 20 hearing:

I. Increasing Employment Opportunities

    HELP Committee Chairman Enzi expressed concern during the hearing 
about the effectiveness of the JWOD program in meeting the employment 
needs of people who are blind and severely disabled.

        ``I'm concerned with how few individuals are being served by 
        the programs,'' he told the panel. ``What can be done to react, 
        but not overact to the current situation and make the necessary 
        reforms?'' he asked, adding, ``I am looking for solutions/
        answers and if I don't get real answers to this question there 
        will be serious problems for these programs.''

    As Chairman Enzi so passionately points out, too few people who are 
blind or severely disabled are employed in the JWOD program, and too 
few are employed outside the JWOD program. We would like to propose 
solutions to three barriers we have identified to generate greater 
employment for people who are blind or severely disabled:
    Barrier: Not enough contracts are set aside by the Federal 
Government for this program. At $2 billion, JWOD represents roughly 1 
percent of Federal procurement. This compares with goals of 23 percent 
of prime contracts for small businesses, 5 percent for small 
disadvantaged businesses, 5 percent for women-owned businesses, 3 
percent for hub-zone small businesses and 3 percent for service 
disabled, veteran owned small businesses.

        Solution: Legislatively establish a minimum 5 percent goal for 
        all Federal agencies for contracting with nonprofit agencies 
        under the JWOD program. In addition, legislatively establish a 
        5 percent goal for subcontracting with nonprofit agencies under 
        the JWOD program by all prime contractors with contracts 
        exceeding $500,000. These two goals would support an estimated 
        330,000 JWOD jobs for people who are blind or severely 
        disabled.

    Barrier: JWOD contracts that have been set aside are not uniformly 
honored by all Federal agencies. GSA ceased to be a mandatory source in 
1988, and Federal procurement became more decentralized in 1988, which 
led to the issuance of hundreds of thousands of credit cards and 
individual Federal employees bypassing JWOD products to purchase 
substantially similar commercial items.

        Solution: Enhance the Committee for Purchase's ability to 
        enforce the current procurement requirements of the JWOD 
        program and support the committee by establishing mechanisms 
        for addressing non-compliance by Federal agencies and 
        employees. We estimate that this will create employment for an 
        additional 1,000 people on existing contracts.

    Barrier: Over-reliance on Government-procurement solutions, and not 
enough reliance on private-sector solutions. Government procurement and 
resulting employment represents only a tiny fraction of the overall 
domestic economy. The private sector employs more than 100 million 
people--the vast majority of the total employed in the United States. 
Yet 15 million disabled people are not being employed by the private 
sector.

        Solution: Legislatively establish a goal of 2 percent 
        employment for people who are blind or severely disabled by 
        private-sector companies and provide tax incentives for 
        achieving and exceeding those goals. We estimate that this will 
        generate employment for 2,000,000 disabled people.

II. Accountability

    Another focus of the hearing was reports of abuse by non-profit 
agencies established under JWOD to provide employment for people with 
severe disabilities.

        ``Congress intended for the JWOD Act to benefit many persons 
        with disabilities, not just a few nonprofit CEOs.'' --Chairman 
        Enzi

        ``The programs have produced shameful and serious failures . . 
        . and flagrant abuses by certain contractors for personal 
        gain.'' --Ranking Member Kennedy

    NIB commends the committee for its efforts to assure that Federal 
programs designed to provide employment opportunities for persons who 
are blind or severely disabled stay focused on meeting that goal.
    Barrier: Widely-reported instances of excessive compensation, 
coupled with insufficient implementation of IRS intermediate sanctions 
and other penalties, erodes public confidence in the nonprofit 
agencies.

        Solution A: Call on the Internal Revenue Service to rigorously 
        enforce the provision in the Internal Revenue Code of 1986 
        calling for intermediate sanctions for excessive executive 
        compensation within nonprofit organizations.
        Solution B: The recommendations of the nonprofit panel convened 
        by the Independent Sector given to the Senate Finance Committee 
        in June 2005 should be adopted.

    These recommendations include increasing the amount of information 
required to be reported to the IRS on Form 990 and to require boards of 
directors of nonprofit organizations to officially approve and be able 
to demonstrate the reasonableness of any increases in executive 
compensation. Other recommendations would require that nonprofit 
organizations strengthen internal controls including strict guidelines 
for travel and reimbursement policies for staff, board members and 
their spouses.
    Congress should assure that the IRS has sufficient funding to 
provide effective oversight of nonprofit organizations with tax exempt 
status and to strictly enforce requirements and implementation of 
authorized penalties.
    Currently, there are two provisions of the American Competitiveness 
and Corporate Accountability Act that apply to all entities, including 
not-for-profit organizations, and to those that do business with the 
Federal Government (such as NIB and its JWOD participating agencies). 
These provisions relate to any obstruction of the investigation or 
administration of any matter by any Federal governmental agency by 
destroying, altering or falsifying records, and to the retaliation 
against informants to law enforcement agencies, including interference 
with their lawful employment. We have taken steps to ensure that we are 
in compliance with these provisions as they relate to NIB.
    1. Protections for Informants--NIB has a written policy to deal 
with complaints relating to various financial matters. This policy 
calls for any employee to notify the Human Resources Director, who then 
will notify the President. In the event that a member of the leadership 
team has a complaint, he/she would notify the Chairman of the Board.
    2. Document Management Policy--NIB's accounting department keeps 
financial records for 7 years; personnel and payroll records are 
retained for 7 years; and insurance records are kept for 10 years. 
Contract administration files are retained for 7 years. Board minutes, 
bylaws, copyright and trademark registration, and audit reports are 
permanent records of the Corporation.
    There are a number of other practices NIB has voluntarily 
established to insure the integrity of its operations:
    1. Protection for the Audit and Finance Committee--NIB's Bylaws 
require that the Board appoint independent auditors and that the Audit 
and Finance Committee meet with these auditors at least annually. This 
has been the practice for more than 25 years.
    2. The Importance of Independent Boards--Our Conflict of Interest 
policy and recently amended Bylaws prohibit interested directors from 
voting on issues where they may have a conflict of interest. Motions, 
votes and abstentions as documented in our Board and Executive 
Committee minutes are forwarded to the Chairman of the Board and 
Chairman of the Ethics Committee at the end of each calendar year.
    3. Composition of the Audit Committee--NIB's Audit and Finance 
Committee consists of five directors--four private sector and one 
agency representative. Two of the directors on our Audit and Finance 
Committee are financial experts. For the past 10 years, at least one 
member of our Audit and Finance Committee has been a financial expert.
    4. Code of Ethics--the Board adopted NIB's Code of Ethics 
approximately 8 years ago. On an annual basis, all employees review the 
code and sign a form that they have read the code and that they 
understand it.
    5. Financial Disclosure--Annually, the CEO and CFO must certify 
that financial statements and disclosures are representative of the 
financial state of the organization. This statement is presented to the 
Board at the Annual Meeting and filed in our corporate minute books.
    We also agree with the committee's concern about responsible use of 
taxpayer dollars, and would point out that only $4.6 million is 
appropriated annually for this program to fund the operations of the 
Committee for Purchase from People Who Are Blind or Severely Disabled. 
When a Federal contracting agency purchase goods and services from NIB-
associated agencies they negotiate a Fair Market Price for the 
contract, which is then submitted to the Committee for Purchase for 
approval. With well-trained contracting officers doing their job, the 
taxpayer is getting a quality product at a fair price at the same time 
NIB-associated agency employees are earning competitive wages for the 
work they perform.

III. Social and Economic Integration

    As Chairman Enzi, Ranking Member Kennedy and other committee 
members pointed out during the hearing, the Federal Government has a 
responsibility to provide employment opportunities to individuals who 
are blind or severely disabled.

        ``We need to get good people speaking out about how to increase 
        employment of people with disabilities. What can we do to 
        change incentives to stay in sheltered workshops? --Senator 
        Isakson

    We wholeheartedly agree. For NIB and its associated agencies, the 
questions are: Have NIB-associated agencies, through the JWOD program, 
created more and better employment opportunities for persons who are 
blind, and how do NIB-associated agencies move the maximum number of 
blind employees into meaningful employment that will allow them to 
fully integrate into the social and economic life of the community?
    Barrier: There is little incentive to move individuals from 
``sheltered workshops'' into meaningful employment.
    We share the committee's concern that individuals with disabilities 
not spend their lives segregated from non-disabled individuals in their 
places of employment and their communities. We agree that ``sheltered 
workshops'' in which individuals are pushed into repetitive, menial 
work, allegedly making as little as 30 cents an hour and have no 
opportunity to assimilate into society can thwart the potential of 
individuals with disabilities who are pigeon-holed into dead-end, make-
work jobs. It is important to distinguish, however, such ``sheltered 
workshops'' from the modern manufacturing facilities operated by NIB 
associated agencies. In contrast to true sheltered workshops, NIB 
associated agencies pay competitive wages for their communities, 
provide health insurance and other benefits, offer opportunities for 
advancement as well as daily interaction with individuals with diverse 
backgrounds. And, they believe that blindness should never be used as a 
factor to pay below minimum wage.

        Solution A: Include incentives in the JWOD Act to encourage 
        nonprofit agencies to aggressively recruit qualified blind 
        individuals for executive positions and to put programs in 
        place, like the NIB Business Leaders Program, to identify blind 
        employees with leadership potential and provide them with 
        training and opportunities to move ahead.
        Solution B: Include incentives in the JWOD Act to increase 
        wages and opportunities for upward mobility for blind employees 
        to enhance their economic independence that will lead to 
        further integration into the economic mainstream of the 
        society.

    Toward this end, NIB has strived--and succeeded--to have its 
associated not-for-profit businesses become ``employers of choice.'' 
Nearly 5,000 people who are blind have chosen to work for not-for-
profit businesses associated with NIB, including those who are 
producing quality SKILCRAFT office products, military apparel, and 
other items for its Federal customers. More than 2 years ago, NIB 
joined with organizations of people who are blind to call on Congress 
to repeal the language in the Fair Labor Standard Act which allows 
certain blind and severely disabled people to be paid less than the 
Federal minimum wage. Since Congress has not yet responded, NIB and its 
associated not-for-profit businesses are moving to require payment of 
minimum wage or better for all blind people employed on JWOD contracts.

        Solution C: Include incentives in the JWOD Act to increase 
        service contracts under the JWOD program for people who are 
        blind. ``White-collar'' job opportunities from service 
        contracts, such as responding to calls to the EPA's National 
        Lead Information Center or serving customers at retail supply 
        centers in Federal office buildings or on military bases, 
        provide employees with higher wages and greater opportunities 
        to interact with a diverse group of individuals in the 
        workplace.

    Toward this end, NIB has embarked on a 5-year effort to double the 
number of blind people employed at its approximately 80 not-for-profit 
businesses across the country, focusing on expanding employment under 
Federal service contracts where individuals who are blind are employed 
on military bases, veterans hospitals, and other Federal agencies in 
settings that require interaction with a diverse group of individuals 
during the accomplishments of their daily work tasks. Rather than 
paying a ``commensurate'' wage rate based on individual productivity, 
NIB agencies pay the prevailing wages for these service jobs in the 
geographic area in which they are located, as determined by the U.S. 
Department of Labor. NIB agencies also pay the full health and welfare 
benefits package--currently an additional $2.87 per hour. Hourly wage 
rates range from about $10 to as much as $22 per hour.
    Barrier: The JWOD statute only measures direct-labor hours of 
employees who are blind or severely disabled thus creating a 
disincentive to promote individuals from line jobs into management 
positions.

        Solution: Recognize upward mobility within NIB agencies by 
        amending the JWOD Act to include blind people in ``indirect'' 
        labor positions and supervisory and management roles, as well 
        as ``direct'' labor, in the ratio of blind to total hours 
        required by the JWOD statute.

    For some (but not all) employees, management opportunities offer 
the best path for reaching their full potential, accomplishing their 
personal goals and being more effective in their work. NIB began a 
management trainee program 3 years ago and is proud to report that the 
first class of Fellows and current blind employees completed NIB's 
Business Management Training on October 21, 2005. As a result of this 
program, 28 blind people received Business Administration Executive 
Training certificates conferred by the Darden School of Business of the 
University of Virginia. Six of the 28 BMT participants already have 
received promotions from the jobs they held 15 months ago. The three 
individuals in the Fellows program have accepted positions with NIB-
associated not-for-profit businesses at salaries ranging from $50,000 
to $60,000 and are buying homes in the cities to which they are 
relocating. Another expanded round of the Fellowships and Business 
Management Training activities will begin in January 2006. In addition, 
NIB will train approximately 1,200 of its associated not-for-profit 
agency employees during 2006 in a program called ``Leadership at All 
Levels.'' A detailed explanation of the Business Leaders program is 
provided in Attachment A to this statement. As these individuals move 
out of line manufacturing jobs and into positions of management, it is 
important that the JWOD program both recognizes and rewards their 
initiative.
    Barrier: The Department of Education's Rehabilitation Services 
Administration (RSA) does not recognize or support JWOD manufacturing 
jobs as ``employment outcomes,'' even if those jobs pay minimum wage or 
above, include employee benefits and provide opportunity for upward 
mobility. There needs to be a clear distinction between sheltered 
workshops and the career opportunities offered by modern NIB agencies 
with opportunities for integration in all aspects of work life.

        Solution A: Legislatively require the Rehabilitation Services 
        Administration (RSA) to ``count and support with vocational 
        rehabilitation (VR) funding'' as ``employment outcomes'' jobs 
        within NIB associated agencies that are based on the 
        individual's informed choice, pay minimum wage or better, and 
        offer employee benefits and opportunities for upward mobility. 
        In order to open JWOD employment opportunities to more blind 
        people, the RSA needs to recognize and support the good jobs, 
        wages and opportunities available through the JWOD program.

    While there are claims that sheltered workshops can be a 
disincentive to self-sufficiency and social and economic integration, 
there also is ample evidence that choosing to work at an NIB associated 
agency's modern manufacturing facility among other people with 
disabilities on a job that provides economic independence can actually 
increase an individuals' ability to fully participate in the cultural 
mainstream of society. Many blind people prefer to work for an employer 
who ``gets it'' and who provides competitive wages as well as 
accommodations--including assistive technology and workplace practices 
that promote optimum productivity--for employees who are blind. The 
result is true economic integration, which in turn leads to cultural 
integration--which should be the goal for all persons with 
disabilities.
    NIB in conjunction with its associated agencies recently retained 
International Survey Research (ISR) to conduct a JWOD Employee Opinion 
Survey focused on job satisfaction and employee engagement. The final 
report is included as Attachment B of this statement. The specific 
measures ISR included in the survey were designed to tap into 
employees' opinions regarding the following JWOD program objectives:

     Provide equitable wages and fringe benefits to all 
employees who are blind within the JWOD program.
     Provide career advancement and upward mobility 
opportunities to people who are blind and are employed through the JWOD 
program.
     Provide personally satisfying employment opportunities 
through the JWOD program to people who are blind.

    The survey revealed that the overall level of job satisfaction for 
the NIB agency workforce is high. Compared to the U.S. National and the 
U.S. Manufacturing Norms, the NIB agency workforce is significantly 
higher on most measures of employee satisfaction. Areas of clear 
strength from the employee's perspective include pride in the work 
their organizations are performing and pride in themselves. The key 
drivers of Employee Engagement for JWOD employees include a caring 
management, a strong reputation and the opportunity for development. 
These results affirm that jobs at NIB associated agencies provide more 
than just financial rewards. Employees like their work and feel proud 
of what they accomplish.
    For all these reasons, blind people across the country are choosing 
NIB associated agency manufacturing jobs with good pay and benefits 
over options often suggested by VR counselors such as part-time work in 
the fast food industry at minimum wage with no benefits. These blind 
individuals should have the right to make such informed choices and to 
establish the economic independence that will allow them to truly 
integrate into the social and cultural mainstream of this country.

        Solution B: Beyond correcting this basic disincentive to the 
        economic and social integration of people who are blind or 
        severely disabled, NIB offers the following ideas to encourage 
        greater employment of people who are blind or severely 
        disabled:

     Give employers who provide additional benefits a top 
preference for referrals from State VR agencies or employers in 
general. This would encourage employers to provide more benefits to 
potential employees.
     Make employers that meet certain minimum standards 
eligible to obtain funding for equipment and training fees. For 
example, projects with more than 10 people who are blind would qualify 
for money equal to half the capital cost of equipment.
     In order to eliminate barriers to employment such as 
transportation, require States to provide sufficient funding to 
transport the individual to work if the current transportation system 
requires more than 1 hour of travel time.
     Reward States that have the highest number of ``26'' 
placements into JWOD program jobs (and where people stay on the 
employment rolls for at least 1 year) with additional funding in the 
next fiscal year. The funding would come from States with the lowest 
number of ``26'' closures.

    Barrier: The ``earnings cliff'' faced by Social Security Disability 
Insurance (SSDI) beneficiaries is a disincentive to economic 
independence.
    As more and more NIB associated agencies are offering benefits 
packages including not only paid holidays and vacation, but also health 
insurance and pension benefits, we are increasingly aware of the strong 
disincentive to economic independence posed by the existing SSDI 
system. Many SSDI beneficiaries want to move off of the Social Security 
rolls, but are placed in the untenable position of losing their entire 
SSDI benefit if they earn just one dollar over the statutory 
``substantial gainful activity'' level.

        Solution: Carry out a national demonstration program to replace 
        the ``earnings cliff'' with a gradual reduction of an 
        individual's monthly benefit checks when they exceed the 
        ``substantial gainful activity'' level. If SSDI beneficiaries 
        were to lose only $1 for every $2 over the SGA limit, many more 
        would be willing to accept higher-paying service contract and 
        manufacturing jobs.

    The Social Security Administration (SSA) was authorized in the 
Ticket to Work and Work Incentives Act of 1999 to conduct a national 
demonstration to test the effectiveness of a gradual reduction of 
benefits. SSA should test a protocol of beginning the benefit reduction 
after earning the full ``substantial gainful activity'' levels for 2006 
($1,450 per month for blind SSDI beneficiaries), in order to encourage 
beneficiaries who work to attain their full potential rather than to 
begin penalizing them for meager earnings of levels such as $300 or 
$500.

                               CONCLUSION

    Chairman Enzi's October 20, 2005 report on oversight of Federal 
employment programs for persons with disabilities rightly questions 
whether there the opportunities are too few for persons who are blind 
or have severe disabilities. In the pursuit of broader opportunities, 
however, he wisely cautions against overreacting in ways that would 
threaten existing jobs and opportunities.
    NIB's associated agencies provide meaningful work, opportunities 
for advancement and economic independence for more than 5,000 NIB-
associated agency employees who are blind. We acknowledge, however, 
that more can be done. We need to do better to meet the evolving needs 
of people who are blind as they seek to enter the workforce. That is 
why the NIB Board of Directors has established a Big, Hairy, Audacious, 
Goal (BHAG; Jim Collins From Good to Great), to double employment for 
people who are blind through our programs by 2010.
    I thank the committee for the opportunity to submit NIB's views for 
the record. We look forward to working with this committee and the 
Congress to identify and implement new ideas to assure that individuals 
who are blind or severely disabled are able to the greatest extent 
possible to work, to become self-sufficient and to be fully integrated 
in the economic and social life of their community.

                              ATTACHMENT A
                   NATIONAL INDUSTRIES FOR THE BLIND
                        BUSINESS LEADERS PROGRAM

Program Overview

    National Industries for the Blind (NIB), a 66-year-old organization 
dedicated to providing jobs and improving employment opportunities for 
people who are blind, has introduced a comprehensive program that 
offers experience and education in business and leadership. While there 
exist training and development programs designed to prepare people who 
are blind for professional work, upwardly mobile, business careers are 
typically not encouraged. However, business is where opportunity lies 
and where the jobs are in America! Given that 70 percent of people who 
are blind are not employed, NIB believes strongly that this program is 
vital to the future success of thousands of individuals who are blind 
nationwide.
    NIB is uniquely well-qualified to solve this problem through their 
Business Leaders Program, a tri-fold menu of development opportunities 
for people who are blind. To that end:

     The Fellowship for Leadership Development recruits 
nationwide, both inside and outside NIB's network of associated 
agencies, for high-potential individuals who are blind. Candidates, who 
have diverse employment histories, will need to meet criteria such as a 
college degree, previous work experience and demonstrated leadership 
skills. Business competence is developed in a rigorous, on-the-job, 2-
year salaried program that builds business skills through real work 
experience. Fellows' value-added work assignments benefit the nonprofit 
agencies, and fellows build business and leadership competence, 
becoming better prepared to enter professional managerial positions 
inside or outside the NIB network of not-for-profit businesses. As a 
component of the program, Fellows participate in Business Management 
Training.
     Business Management Training offers qualified employees at 
NIB and NIB's network of associated agencies the opportunity to pursue 
formal business skills development for career advancement through a 
customized, intensive, certificate program developed exclusively for 
NIB by the University of Virginia's Darden Graduate School of Business 
Administration. Taught at the level of Darden's MBA curriculum, this 
1\1/2\-year training, implemented in 5, 1-week sessions, builds 
business acumen and optimizes participants' transitions into 
increasingly higher level management and leadership positions. This 
career-focused program targets employees who are blind and who have 
jobs at all levels, ranging from manufacturing to services and those 
who are already poised in career tracks. Agencies that support 
applications of their qualified sighted employees will be charged 
tuition if there is room in the class of a particular session, however 
strong preference is always given to employees who are blind.
     Leaders at All Levels is a fundamental skills development 
program designed to develop leadership, business-related, 
interpersonal, service and team-building skills to all employees within 
NIB and NIB network of associated agencies reaching 1,000 employees 
annually at associated NIB not-for-profit businesses, and impacting 
performance inside and outside the job site. This track is designed to 
be a feeder program for the other tracks; and therefore, has a broad 
audience offering a spectrum of development opportunities for all 
levels of the organization. Leaders at all Levels training assures that 
management and staff are constantly striving for excellence, 
professionalism, and responsibility as they work collaboratively to 
meet the mission of creating ever increasing numbers of employment 
opportunities for people who are blind.

Program Goals and Achievements

    Launched in mid-2003 and already showing measurable successes, the 
Business Leaders program is the first professional development program 
of its kind to transform capable individuals who are blind into 
successful business people within the NIB network or in the larger 
business community. It operates on the premise that, given ability and 
inclination, they need only the skills, tools, and hands-on 
opportunities (as anybody would), to achieve workplace success and 
self-reliance.
    The following describes pertinent goals and achievements of the 
three tracks of the program:
    1. The primary goal of the NIB Fellowship is to provide 
professional work experience and learning opportunities to enable each 
NIB fellow to build a rewarding, successful career, specifically 
preparing him/her for a management and executive position in business 
and to serve as a role model for other individuals who are blind.

     The three fellows from the 2003-05 program successfully 
completed (as measured by 10 business competencies) their 2-year 
program September 2005. After they circulated their resumes and held 
hiring meetings with potential employers, they each landed professional 
managerial jobs with excellent salaries:

         Daniel accepted a position at Bosma Industries in 
        Indianapolis, where he will serve as Business Development 
        Manager of this 90-year-old, multi-faceted organization.
         Grant will be Program Manager at Winston-Salem 
        Industries for the Blind in North Carolina handling the 
        production flow of a number of the agency's key, high-revenue 
        products.
         Mike will work at LC Industries in Durham, North 
        Carolina, the largest not-for-profit business in NIB's network, 
        as Plant Supervisor in charge of a major product.

     Recruitment for a new cohort was completed and out of a 
strong candidate pool, 11 people who are blind representing wide 
diversity and high-potential were chosen for in-person interviews. By 
November, up to six candidates will be selected to start in the January 
2006 Fellowship.
    2. The primary goal of Business Management Training is to provide 
business-oriented education, including the language and tools of 
business, to high-potential career-track participants who are blind. 
The most pertinent business-related topics--finance, accounting, 
production, ethics, strategic planning, human resources, marketing, and 
communications--are learned; but a unique opportunity has been built 
into the program. The participants are assigned real agencies, working 
with the CEO and creating business profiles and plans. All 28 blind 
participants have successfully met the requirements of the first four 
sessions (Aug. and Nov. 2004, Mar. and July 2005), and the remaining 
session will be completed on October 21, 2005.
    Already, due to the impact of this program, there have been various 
promotions among the participants who are blind. Examples:

     Assistant Director of Community Services promoted to 
Director of Development,
     Assembly-line and sewing machine operator promoted to 
public policy-consumer relations associate,
     Line supervisor promoted to assistant manager of the 
industrial division,
     Director of Development and Public Relations promoted to 
General Manager of Administration, and
     Warehouse employee promoted to showroom supervisor at an 
air force base retail store.

    3. Leaders at All Levels has a more general goal to reach over 
1,000 agency employees annually at the not-for-profit organizations, 
allowing each individual to grow to his/her full employment potential. 
Three NIB-associated agencies were selected to pilot a five-module 
package of 1 hour training sessions featuring fundamental leadership 
skills such as interpersonal principles, team building, managing 
change, and negotiating ideas. The nearly 300 participants can attest 
to the positive, on-the-job effects of their learning. Some examples 
are:

     Unsolicited, a manager claimed, ``A noticeable improvement 
in communications among line staff.''
     The human resources manager, noting the unconstructive 
tone of a subsequent discussion, re-directed the group to be more 
productive by saying, ``Now what did we learn yesterday about handling 
change?''
     An employee said she discovered, ``I'm a leader, too.''
     When a co-worker exclaimed, ``I know a better way to do 
that!'' another co-worker, responded, ``Now, remember, how were we 
taught in class to present a new idea?''
     A manager noticed a team leader's improved interpersonal 
skills in making changes in the front line.

Conclusion

    Each track of the Business Leaders program is designed to further 
develop the leadership and business skills of people who are blind, 
allowing them to enter or advance in the business world with experience 
and confidence. As program graduates assume roles of increasing 
responsibility and leadership, both within and outside NIB, we expect 
that the skillful work and excellent leadership of these Business 
Leaders program participants will prove their value to the business 
community and that the minds of corporate leaders nationwide will open 
to the possibility of employing people who are blind in management 
positions. Ultimately, NIB expects to see people who are blind in 
upper-level management and leadership positions, both within NIB's 
network and in the broader business community.
    [Editors Note--Due to the high cost of printing, previously 
published materials submitted by witnesses are not reprinted. 
Attachment B can be found in committee files.]

 Prepared Statement of the Colorado Developmental Disabilities Council 
                                 (CDDC)
       Colorado Developmental Disabilities CounciL,

                                                  October 27, 2005.
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, D.C. 20510.

    Dear committee members, first, thank you very much for taking the 
time to look carefully at the funding mechanisms of programs that 
assist individuals with disabilities to access jobs of their choice. 
Many dollars go toward this Federal priority and it is critical that 
those dollars are spent as efficiently as possible. It is to that end 
that the Colorado Developmental Disabilities Council makes the 
following recommendations.
    The mission of the Council is to support policies, system change, 
and legislation that promote the inclusion of individuals with 
disabilities in daily life. One of our top priorities is to increase 
participation of individuals within the work force, just as other 
citizens participate. It is often difficult for those of us in human 
services to remember what and how other citizens access work, as the 
human service system has created its own complex system that rarely 
parallels that of the typical citizen. With this in mind, the following 
recommendations are presented to the committee with the hope that 
changes can occur within Federal contracts that, by nature, are not how 
everyone else accesses the work force. The Javits-Wagner-O'Day Act is 
clearly in need of bringing into the 21st century including the 
contracts with NISH or the National Industries for the Severely 
Handicapped. Often the interests of the provider community are 
different from those of the individuals being served, thus it is also 
with that in mind that the following recommendations are made.
    Going on the basis that all people can generate personal income and 
that 100 percent of individuals are able to work with appropriate 
individualized accommodations, it is recommended that the idea of 
natural proportions be put into legislative language. The current 75 
percent of persons with disabilities in NISH contracts clearly violates 
this basic tenet of natural proportions that is critical to being 
included in the work place or community in general. The natural 
proportion for all disabilities nationally is about 20 percent; for 
those with ``severe'' disabilities, the incidence rate is about 3 
percent. The proportion certainly needs to be lowered.
    Also, the definition of ``community'' must be very clear. Just 
because a job is physically located in a community, does not mean that 
there is access to real people or real jobs with the use of the enclave 
or work crews, as the model is also known. Both of these models are 
just as congregate as are sheltered workshops. They are merely islands 
in the mainstream that perpetuate isolation from the real community. 
NISH statistics indicate that they provide 12,000 jobs to people in 
workshops and 28,000 on ``community'' enclaves. Many enclaves may come 
into a Marriott, for example, and clean during the night or fold towels 
in the basement during the day, both in total isolation. There is never 
any contact with real staff or hotel customers. Both these models used 
by NISH are outmoded and only serve to obfuscate the term ``customized 
employment.'' If the model were to follow how everyone else is 
employed, the Federal Government would actually employ individuals with 
disabilities based on their interests and skills. A Federal agency as 
employer, not a human service agency, would issue the paycheck.
    In conclusion, please consider making changes in which the dollar 
follows the individual. If there is mid-management (agencies/
contractors), there is less efficiency--be it a 4 percent 
administrative fee or a 10 percent fee--the dollars are moved from the 
person to the contractor. The model of the money following the person 
is being considered in many Federal and State programs currently with 
great fiscal efficiency. Housing, employment, and individuals 
themselves hiring and firing those that support them in finding a job 
or any other facet of life is something that the Colorado Council fully 
supports. Consumer directed supports are a model worth pursuing.
    Please consider the above recommendations in your deliberations on 
not only the JWOD, NISH, NIB, and Randolph-Shepard programs, but also 
any of those within the human service arena in which individuals or 
families may want to have closer control of their supports.
            Sincerely,
                                             Marcia Tewell,
                                                Executive Director.
                                            Ian Watlington,
                                                Executive Director.

     Prepared Statement of the American Council of the Blind (ACB)

    The American Council of the Blind wishes to thank the members of 
the Senate Committee on Health, Education, Labor, and Pensions (HELP) 
for keeping the record open following their oversight hearing of 
October 20, 2005, in order to allow us the opportunity to comment on 
the very important issues related to employment programs for persons 
who are blind or otherwise disabled. We appreciate the committee's 
interest in improving the quality of these programs and increasing the 
benefit such Federal programs provide to persons who are blind or 
otherwise disabled. We have reviewed the testimony given by witnesses 
during the above-mentioned hearing as well as the Chairman's Report. We 
offer the comments below in response. These comments will be organized 
around the four major questions posed in the Chairman's Report, namely: 
What outcomes does the Randolph-Sheppard law produce? What outcomes 
does the Javits-Wagner-O'Day law produce? Do these laws fulfill their 
Congressional intent? How can these programs be made more effective and 
more efficient? We should note that our comments will necessarily focus 
on the impact of these programs for people who are blind and visually 
impaired, as that is the constituency that our organization represents.

              I. OUTCOMES OF THE RANDOLPH-SHEPPARD PROGRAM

    The committee has noted that the purpose of the Randolph-Sheppard 
program was to provide increased opportunities for people who are blind 
to ``maximize their vocational potential.'' For the 2,681 blind vendors 
whose participation in the program was documented by the Department of 
Education in 2002, we believe it is clear that this program has 
increased the number and nature of opportunities available to them. The 
program has provided these individuals with opportunities to engage in 
satisfying work, support themselves and their families, and participate 
in their communities in ways that they were not otherwise able to do. 
The degree to which these vendors can ``maximize'' vocational potential 
is, as the committee's record indicates, a bit more difficult to 
ascertain. Just as the success of any business depends on numerous 
factors, such as the business acumen of the management, the nature of 
the customer base, the location, and economic conditions, all of these 
factors, and more, affect the success of vendors.
    Much attention has been focused on the prevalence of some negative 
outcomes of the program. First, it is asked why there are so few 
participants in the program. This is a good question and one we have 
asked ourselves. We know that in virtually every State in the Union, 
there are trained and licensed blind vendors who have yet to obtain an 
opportunity to operate a facility. It is our belief that the number of 
available locations is shrinking at a rate that is at least comparable 
to, and possibly greater than, the number of licensed blind vendors 
working today. Some of this is due to the decisions made by State 
licensing agencies, but the bigger problem is that Federal agencies 
have increasingly failed to recognize the Randolph-Sheppard priority 
and there is no incentive for them to do so. We will say more about 
this issue later, but we believe this is an issue that deserves more 
investigation by the committee.
    Committee staff has expressed concern about ``windfalls'' made by 
``a few blind vendors under the Randolph-Sheppard program.'' We are 
cognizant of Congressional sensibilities regarding this issue, in light 
of recent developments in the corporate world. However, the manner in 
which this issue has been presented raises some grave concerns for us. 
For example, it was noted during the October 20 hearing that individual 
blind vendors are ``entitled to the lion's share of profits from'' 
several contracts with dollar values in the millions. The fact was 
stated in a manner which seemed calculated to indicate that this is, on 
its face, an objectionable situation. The prima facie nature of this 
objection is not clear to us. In the first place, the values cited 
actually represent the value of the contract over a 5-year-period, 
rather than an annual amount. Secondly, the amounts cited include major 
costs of doing business, such as the cost of purchasing food for the 
troops on each base, the purchase and maintenance of equipment, and the 
salaries of hundreds of employees required to fulfill the contract to 
the standards set by the base. Therefore, to cite the value of these 
contracts as an indication of the vendor's profits is misleading. Even 
if we can establish the actual profit to which the individual blind 
vendor is entitled, then we must ask whether the objection to this 
individual's realizing such a profit is based upon his/her status as an 
individual, a vendor, or a person who is blind. If an individual blind 
vendor had not bid on any one of these contracts, and the contract was 
given to another entity that was not part of the Randolph-Sheppard 
program, would Congress find that entity's profit objectionable and 
deem it necessary to investigate it? We would like to know what 
constitutes an ``acceptable'' profit for a vendor operating under the 
Randolph-Sheppard program.
    If there is concern within the committee that profitable businesses 
should somehow return funds back into the Randolph-Sheppard program in 
order to contribute to its perpetuation, we would not necessarily 
disagree with such a proposal, but it is not at all clear that the 
concern expressed during this hearing centered on the viability of the 
program.
    Further, military contracts constitute at most 39 out of just under 
3,000 contracts, and our survey of vendors indicates that most of the 
military contracts allow individual vendors a maximum of $125,000.00 
per year. Most blind vendors make well under $100,000.00 per year. This 
sum is not exorbitant and, in fact, represents a wage that more people 
with disabilities should have opportunities to earn.
    Finally, there has been a great deal of interest in whether a 
sufficient number of people who are blind, or have other disabilities 
work in any given vending location. We share the concern expressed by 
some committee members about the low number of such people employed in 
vending facilities. However, there are a few points that should be made 
here. First, several States, such as Ohio, Illinois and Georgia, 
require Randolph-Sheppard vendors to hire a certain number of 
individuals who are blind, or have other disabilities. This is a trend 
that we think should be emulated by other States. However, to be 
effective, such a requirement would need to be supported by regulation 
or legislation setting forth applicable definitions of disability and 
procedures for both establishing the disability of employees and 
reporting to an appropriate agency. Traditionally, with the exception 
of a few States that have imposed their own regulations, Randolph-
Sheppard vendors have had neither the requirement to use disability as 
a criterion for hiring, nor the mechanism for reporting such hires to 
the Department of Education.

                    II. OUTCOMES OF THE JWOD PROGRAM

    We believe that a number of positive strides have been made for 
blind people in the JWOD program over the past 20 years or so. The 
agencies associated with National Industries for the Blind have come a 
long way in their efforts to promote people who are blind into 
management positions and to operate facilities that pay competitive 
wages for work done in integrated settings. More should, and is, being 
done to improve the quality of work settings and compensation under 
this program, and we recognize that significant barriers still make 
opportunities virtually inaccessible to many people with severe or 
multiple disabilities. At the same time, we also believe that one 
reason for this is that although recognition of the problem is 
widespread throughout both disability and public policy circles, it has 
not been easy to establish consensus regarding how to resolve the 
problems. One reason is that efforts to meet the needs of one 
individual sometimes create barriers for another. We believe that any 
legislative proposal aimed at improving the employment-related outcomes 
for the JWOD program should emphasize the availability of options for 
individual workers, so that they have choices and access to information 
about the consequences of those choices, and can determine for 
themselves, just as people who have no disabilities do, what type of 
occupation, wage and benefit package, and work setting will best meet 
their needs and fit their personal goals.

                    III. CONGRESSIONAL INTENT ISSUES

    Several members of the committee have raised concerns about whether 
the Randolph-Sheppard and Javits-Wagner-O'Day programs have fulfilled 
the intent of Congress expressed at the time of their enactment. It is 
our position that they have, for the most part, done so, but that like 
any institutions run by human beings over a period of many years, they 
have also fallen short in some areas. Both programs should increase the 
number of people who benefit from the opportunities they can provide. 
Committees of Blind Vendors and organizations of the blind have 
advocated for increased participation opportunities within the 
Randolph-Sheppard program for years. We welcome Congressional interest 
in seeing the number of participants grow, just as we did in 1974 when 
the Randolph-Sheppard Act was last amended. However, we note that 
consideration of Congress's original intent for this program would not 
be complete without examining other aspects of that intent, in addition 
to the numbers. This program was enacted in order to meet a need. The 
great majority of people who were blind could not find employment 
outside of a very few menial occupations, let alone acquire the 
wherewithal to start businesses of their own. Unfortunately, many of 
the barriers facing blind people in the 1930's still exist today. Both 
State rehabilitation agencies and organizations of the blind continue 
to see new examples of the fear of blindness and the presumptions about 
the incapacity of blind people that still pervade our society. Yes, 
some progress has been made here too, assisted by the implementation of 
the Rehabilitation Act, the Americans with Disabilities Act, and other 
such laws, but these have not been the panacea we had hoped for, for a 
number of reasons, most of which are beyond the scope of this 
particular hearing. Our point is that not nearly enough progress has 
been made in addressing pervasive employment discrimination to simply 
expect that every blind person who wishes to work in any given 
occupation in any given community can simply get out and do so. Those 
of us who have done so have had a lot of doors slammed in our faces 
before finding one that would open, and frequently, the one that opened 
did so because we knew how to push it. People who, because of 
disability, or lack of necessary supports, are unable to ``push'' will 
still find success even more difficult to achieve. That is why it is so 
important to us that both the Randolph-Sheppard and Javits-Wagner-O'Day 
programs continue to be available to people who can benefit from them.

               IV. IMPROVING EFFECTIVENESS AND EFFICIENCY

    We believe that there are steps that can be taken to improve the 
effectiveness and efficiency of both the Randolph-Sheppard and Javits-
Wagner-O'Day programs. However, we are far from convinced that simply 
combining them into one program will solve the problems, increase 
efficiency, and enhance effectiveness. In fact, unless particular 
issues are addressed, the result of combining them could do quite the 
opposite. We urge the committee to consider some less drastic, and we 
believe, more constructive, alternatives.
    First, both programs must be overseen and held accountable for 
actually benefiting people who are blind or otherwise disabled. The 
Randolph-Sheppard program has fallen short largely because at both the 
Federal and State levels, it has received neither funding nor 
administrative priority. Even before the recent changes within the U.S. 
Department of Education, staff resources dedicated to the advancement 
of this program were minimal at best. Within State departments of 
rehabilitation the situation varies, but often mirrors the lack of 
attention of the Federal Government. This trend will only increase as 
agencies consolidate into large umbrella labor or social service 
organizations where programs serving low incidence disability groups 
end up near the low end of the resource distribution chain. We believe 
that Congress should either reaffirm the provisions of the 1936 act 
requiring adequate staffing levels by the U.S. Department of Education 
and set forth goals and objectives for which that staff would be 
accountable, or consider establishing a Committee for Small Business 
Development for Persons who are Blind or Otherwise Disabled, which 
would parallel the work of the Committee for Purchase from People who 
are Blind or Disabled, but focus on the development of business 
opportunities in particular. Such a committee could be charged with 
increasing the opportunities for people with disabilities to move into 
management positions within both programs, as well as take advantage of 
other opportunities outside of these particular programs.
    Regardless of how these programs are structured, questions about 
their effectiveness will continue until such time as Federal agencies 
take their part seriously. The U.S. Postal Service and the Veterans' 
Administration are examples of a growing tendency among Federal 
agencies to refuse to recognize the Randolph-Sheppard priority in 
awarding food service contracts or circumvent the Javits-Wagner-O'Day 
preference when purchasing their supplies. There are virtually no 
consequences for their failure to comply with these laws. If Congress 
wants these programs to benefit increasing numbers of people with 
disabilities, then we urge them to consider ways in which agencies can 
be held accountable for interfering with the ability of these programs 
to provide such an increased level of benefit.

                             V. CONCLUSION

    We appreciate the committee's concern for the effectiveness of 
these programs, and interest in insuring that these programs actually 
do provide increased opportunity to the greatest number of people who 
are blind or have other disabilities possible. However, we urge 
Congress to seek input from additional entities and individuals, whose 
expertise and experience with these programs can play a valuable part 
in determining how to improve the outcomes, effectiveness and 
efficiency of these programs. We believe that helpful perspectives 
could be gained from representatives of State Licensing Agencies, 
Committees of Blind Vendors, and individuals representing both 
management and employees of agencies associated with the National 
Industries for the Blind. As an organization of people who are blind 
and visually impaired, we would also be most interested in engaging in 
further discussions with this committee related to measures to address 
the issues raised here, as well as during the hearing conducted last 
week. We thank you for your consideration of our input thus far.
    Finally, we urge the members of the HELP Committee to avoid fixes 
that will result in throwing the proverbial baby out the window with 
the bath water. It is our hope that the zeal to address problems in 
both programs will not overshadow the positive benefits that have been 
achieved through the years, but will, in fact, make the most of them.
                                 ______
                                 
       American Congress of Community Supports and 
                      Employment Services (ACCSES),
                                    Washington, D.C. 20006,
                                                  October 28, 2005.
Hon. Michael Enzi,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, D.C. 20510.

    Dear Chairman Enzi: The American Congress of Community Supports and 
Employment Services (ACCSES) would like to thank you for holding your 
hearing on October 20 on ``Opportunities for Too Few? Oversight of 
Federal Employment programs for Persons with Disabilities.'' ACCSES is 
a national, nonprofit organization comprised of individual providers of 
vocational rehabilitation services and community supports as well as 
the State trade associations who represent them at their respective 
State level. These community rehabilitation providers are committed to 
maximizing employment opportunities and independent living for people 
with physical and mental disabilities.
    As was obvious from the standing room only crowd, this hearing 
attracted interest across the disability community. Congress has rarely 
paid much attention to disability employment programs and we commend 
the HELP Committee for taking time to look into both the Randolph-
Sheppard and Javits-Wagner-O'Day programs and to see how both can be 
improved.
    We would like to offer the following comments on your hearing for 
the record:
Supported Employment and Facility-Based Employment
    While this hearing was convened to look at Federal employment 
programs for people with disabilities, testimony at times attacked 
facility-based employment. Two witnesses on the panel testified against 
facility-based employment while there were none present in support of 
such work. We are disappointed the committee did not request testimony 
from a manager in a facility-based employment facility or a worker in 
such a facility. It would have been a good opportunity for the 
committee to hear first-hand about the importance and necessity of such 
work options. In the future, ACCSES is eager to work with you to 
identify managers and workers who could offer such testimony.
    ACCSES members agree that for many people with disabilities, 
supported employment or other community employment is the best option. 
These jobs often allow them to earn good wages, interact with other 
people, and gain necessary work skills. We have many members that offer 
extensive supported employment programs and that find many individuals 
supported employment or employment directly in community employment. It 
should be noted, however, that many supported employment placements are 
only part-time and involve a significant amount of staff assistance for 
the person with a disability. In addition, not all supported, 
community, or competitive employments are successful. When such jobs 
fail, facility-based employment serves as a safety net, enabling people 
to return to work immediately.
    Simply because supported employment or community employment is 
ideal for many people with disabilities does not mean it is ideal for 
all or that everyone would choose such a job. Many of our members 
recognize this fact by having a diverse array of employment 
opportunities for people with disabilities. Facility-based employment 
is a vital component of these employment opportunities. As Tony Young 
of NISH pointed out during the hearing, society is not yet at a place 
where there is a job at a good wage waiting for everyone with a severe 
disability. Workers in a facility setting are able to learn vital work 
skills, earn wages, and have staff available to accommodate their 
special circumstances. Our members use facility-based work as part of 
their employment programs and are able to place workers in a job based 
on their needs and desires. In fact, there are many instances where 
facility-based work is simply a transitional step on the way to 
community work. In many instances, our organizations cooperate with 
State vocational rehabilitation agencies to train people with severe 
disabilities in a facility setting and then move them to community 
work.
    Contrary to the claims of some, there is certainly an educational 
component to facility-based work. While some of the work may not teach 
skills that are directly applicable in community settings, the work 
does teach general job skills such as showing up to work on time, 
staying on task, taking direction from supervisors, developing motor 
skills, and getting along with fellow workers. In fact, the earliest 
work and research that led to the development of workshops was based 
upon the demonstrated need to teach the work role to some individuals 
and not a specific skill. These work attitudes and skills are vital for 
any job and are an important part of any facility's work program. A 
recently published study in the journal Research in Developmental 
Disabilities \1\ supports this and demonstrates an increase in adaptive 
skills as people with disabilities moved into employment, including 
sheltered work.
---------------------------------------------------------------------------
    \1\ Stephens, Dawn; Collins, Michael; and Dodder, Richard. ``A 
Longitudinal Study of Skill and Employment Acquisition Among 
Individuals with Developmental Disabilities.'' Research in 
Developmental Disabilities. Vol. 26, pp. 469-486.
---------------------------------------------------------------------------
    The alternative to facility-based employment for many workers with 
severe disabilities is not having a job at all. In their quest to stamp 
out some of the problems of the facility-based work program, advocates 
would instead have the people with the most severe disabilities shut 
out of the work system altogether.
JWOD Jobs vs. Community Jobs
    During the hearing, not-for-profit organizations that operate JWOD 
contracts were criticized for not advancing more workers off JWOD 
projects into community-based employment. However, the JWOD Act never 
had as its primary focus moving people with disabilities into community 
work. The Government has programs funded under the Rehabilitation Act 
for this purpose. The JWOD Act was designed for the most severely 
disabled who are otherwise unable to work in community employment. To 
criticize the act for not fulfilling a function it was never designed 
to fulfill is unfair.
    A point that also seemed to be lost in the hearing was that the 
majority of JWOD jobs (70 percent) are service jobs. Although, by law, 
the majority of people working on a JWOD contract must have a severe 
disability, when a JWOD contract involves services that usually means 
there is significant interaction between the people with disabilities 
working on the contract and people without disabilities in the 
buildings, dining halls, or other places where these contracts are 
taking place. For instance, many military dining halls are staffed 
under the JWOD program. In their capacity working in these dining 
halls, people with disabilities are interacting with a variety of 
people who do not have disabilities. The same is true of many JWOD 
service contracts.
    Furthermore, there was an implication in much of the criticism of 
JWOD jobs that somehow these jobs are not as good as employment in the 
community or are not ``normal'' jobs. The fact is that jobs performed 
on JWOD contracts are often better than jobs in the community if one 
were to measure them by wages, health benefits, and worker 
satisfaction. JWOD jobs pay on average $9.14 an hour, well above the 
minimum wage. They also pay health and welfare benefits. Many supported 
employment jobs do not. Facilities with JWOD contracts report that they 
often meet resistance from workers if they try to move them off JWOD 
contracts to a job in the community, at times even if the community job 
pays better (which it often does not). It's easy to see why when it is 
considered that many supported employment jobs or other community 
placement jobs involve working in low-wage fast food jobs or other 
service jobs. This work is not as challenging, rewarding, or well-
compensated as a JWOD job. When confronted with this choice, the people 
with disabilities working on these jobs logically choose JWOD over 
community placement.
    When discussing JWOD jobs versus other work, it should be noted 
that JWOD jobs are not made up to create work for a person with a 
disability. The committee report gives this impression when it 
distinguishes between JWOD jobs and ``normal'' jobs. By this 
definition, providing food service to our Nation's military is not a 
``normal'' job. Assembling military uniforms for our armed forces to 
use in Iraq and Afghanistan would not be a ``normal'' job, either. We 
fail to see what differentiates these jobs from ``normal'' jobs, except 
the fact that they are being performed by people with disabilities. 
These are jobs that need to be done and if they were not being 
performed by JWOD workers they would be performed by others. To say 
they are not ``normal'' because they are filled by people with 
disabilities is insulting to the thousands of workers with severe 
disabilities who fill these jobs and serve our Nation every day.
    Another aspect of this issue not presented to the committee was 
that most agencies that have JWOD contracts consider them merely one 
part of their overall employment and support services for people with 
disabilities. While they employ people with disabilities on a JWOD 
contract they are also placing people in community jobs. At some 
agencies the revenue brought in by JWOD contracts is instrumental in 
helping them fund community placement programs, since often State and 
Federal funds for these programs are meager.
Executive Compensation at JWOD Agencies
    The hearing also focused on executive compensation at agencies with 
JWOD contracts. The Chairman's report discusses a few of the highest 
paid CEOs at JWOD-producing nonprofits, but it fails to give any 
evidence that this is widespread or that high compensation is 
unjustified. According to a recent article in the Oregonian, 20 percent 
of the 50 largest JWOD producers earn over $300,000. Ten organizations 
(out of over 500 JWOD producers) that pay their CEOs over $300,000 is 
not an example of widespread excessive compensation.
    One of the difficult issues when discussing executive compensation 
for nonprofits is the changing nature of the nonprofit world. Many 
nonprofits serving people with disabilities have begun operating under 
more of a business model as they aggressively pursue business 
opportunities to market goods and services, and in general operate much 
like a for-profit business while at the same time meeting the needs of 
their clients with disabilities. Government at all levels encourages 
this type of nonprofit operation since these nonprofits are able to 
deliver better services to the community at a lower price, using funds 
raised from business activities to help fund programs for people with 
disabilities.
    To achieve these results nonprofits must recruit and retain 
talented staff. They often compete with the for-profit world to do so. 
This means that the salaries offered by some nonprofits may seem high 
to the public at large. If these nonprofits did not offer these 
salaries, however, that would mean that they would not be able to 
attract the talented staff they need to grow their programs and serve 
more people with disabilities. In the end, people with disabilities 
would suffer as there would be fewer creative and resourceful people 
staffing these nonprofits and creating job opportunities for them.
    In conclusion, ACCSES would like to once again thank you for taking 
the time to review these important Federal programs that provide 
employment opportunities for people with disabilities. While we 
understand some of your concerns with facility-based employment, the 
lack of movement from JWOD jobs into community jobs, and high CEO 
compensation, we hope you will consider the circumstances surrounding 
these issues and recognize the diverse factors at play in them. The 
community rehabilitation providers that make up ACCSES are committed to 
helping people with disabilities achieve their full potential through 
employment and independent living, and many of our members have decades 
of experience with these issues. We hope you will consider our 
perspective as you consider any changes to Federal employment 
legislation affecting people with disabilities. We look forward to 
working with you in the future.
            Sincerely,
                                              Steve Perdue,
                                     President, Board of Directors.
                                 ______
                                 
 Prepared Statement of the National Council of State Agencies for the 
                             Blind (NCSAB)
  National Council of State Agencies for the Blind 
                                           (NCSAB),
                                        Bethesda, MD 20814,
                                                  October 31, 2005.

    The National Council of State Agencies for the Blind (NCSAB) is a 
national organization of State vocational rehabilitation agencies 
providing employment and training services to assist blind individuals 
to achieve full social and economic integration. State VR agencies 
administer the Randolph-Sheppard program, and work closely with many 
other employment programs including those authorized under the Javits-
Wagner-O'Day (JWOD) Act. The NCSAB wishes to take this opportunity to 
express its unconditional support for the Randolph-Sheppard program and 
to respond to a number of misleading portrayals of the program, its 
purpose, and its results.

Background

    For nearly 70 years, the Business Enterprise program has provided 
unprecedented entrepreneurial opportunities for blind people through 
management of vending facilities on Federal property. The program was 
authorized by the Randolph-Sheppard Act of 1936 to provide blind 
individuals with remunerative employment, enlarge their economic 
opportunities, and encourage their self-support through the operation 
of vending facilities in Federal buildings. The Randolph-Sheppard 
program receives no Federal appropriation. It is administered by State 
VR agencies that recruit, train, license and place individuals who are 
blind as operators of vending facilities located on Federal and other 
property. According to the U.S. Department of Education, in fiscal year 
2004, a total of 2,584 blind vendors operated 3,100 facilities under 
Randolph-Sheppard. The program generated $488.5 million, and the 
average vendor earnings amounted to $39,880.
    Randolph-Sheppard creates unparalleled entrepreneurial business 
opportunities for blind individuals. It requires blind individuals to 
manage the operations of a food service facility--some large and some 
modest--as independent business persons. The complexity and 
remuneration associated with individual facilities varies, but creates 
substantial opportunity for upward mobility for blind Randolph-Sheppard 
operators.
    The Randolph-Sheppard program is the most successful employment 
program for blind people in the Nation's history. In recent years the 
program has increased its activities to include military troop dining 
facilities. Military troop dining has opened new and exciting 
opportunities for blind operators and is a daily, visible reminder of 
the ability of blind people to perform complex, demanding jobs that 
contribute to our Nation's security. The Randolph-Sheppard program 
should continue to receive the full support of the Federal Government, 
including all branches of the military. The Randolph-Sheppard program 
works cooperatively with other programs, including the JWOD program. In 
a number of military troop dining facilities, the Randolph-Sheppard 
blind operator employs significant numbers of people with disabilities; 
however, the purpose of Randolph-Sheppard should not be confused or 
obscured. No action should be recommended that would limit the 
opportunities of blind entrepreneurs to achieve full economic 
independence commensurate with their individual ability and willingness 
to achieve. The NCSAB stands ready to work with members of the HELP 
Committee as it looks at important employment programs for blind people 
and others with disabilities.

Issues Raised at the HELP Committee Hearing

    Issue 1: Has the Randolph-Sheppard program failed to achieve its 
statutory mandate to employ adequate numbers of blind people and others 
with disabilities?
    Response 1: The Randolph-Sheppard program grants to blind vendors 
mandated priority to operate food service operations at Federal 
locations. Some of these are in large facilities, including cafeterias. 
Whether the facility is large or small, the blind vendor is required to 
be able to manage all aspects of the operation (in some cases including 
hiring and supervising a staff), while maintaining records needed to 
comply with Federal and State tax and other regulatory requirements.
    According to the October 20, 2005 Chairman's Report, in 2002 (the 
Federal reporting year used in the committee's analysis), a total of 
2,681 licensed blind vendors and their subcontractors employed 337 
people who are blind; 278 people with other disabilities; and 6,507 
people who have no disability at all. Based on these data, the Chairman 
concluded that less than 5 percent of the individuals working in the 
Randolph-Sheppard program are blind; a cause for concern in a program 
designed to create jobs for blind people. The implication, of course, 
is that the program employs only a handful of blind people and others 
with disabilities.
    Yet these data are, at best, incomplete. In 2002, the program 
provided employment at the management level to 2,681 blind vendors. 
These blind vendors in turn employed an additional 337 blind people and 
an additional 278 people with other disabilities. The program, 
therefore, did not employ only 337 blind people out of a workforce of 
nearly 10,000. It provided employment to 3,018 blind people (2,681 
blind managers and 337 helpers). Thus, 30.8 percent (not 5 percent) of 
the 9,803 people working in Randolph-Sheppard facilities nationwide 
were blind.
    These data reveal another important point. Most Randolph-Sheppard 
vending facilities are quite small--classic ``mom and pop'' operations. 
On average, blind vendors employ just over two employees to work with 
them in their facilities. Often these are family members or trusted 
neighbors and friends. The 6,507 people without disabilities are hired 
by the blind vendors. The cost of their employment is borne by the 
blind vendor. The blind vendor receives no funding for this purpose. 
The funds used to hire staff come from the sale of products, not from a 
public source.
    The Randolph-Sheppard program is structured to grant 
entrepreneurship to people who are blind, offering them the freedom to 
run a business as they individually deem necessary to earn a living. It 
may be argued that the program should extend its employment 
opportunities beyond the management level. However, Congress has never 
implicitly or explicitly expressed such a sentiment. Stating this 
objective now, and condemning the program for past failures to meet 
that goal, is disingenuous. To place such a mandate on the program 
would put a requirement on the blind vendor that is not placed on any 
other business.
    Moreover, under Federal law, all employers are required to conduct 
nondiscriminatory employment practices, and to make reasonable 
accommodations for employees with disabilities. These nondiscrimination 
requirements apply to Randolph-Sheppard blind vendors in the same way 
and to the same extent as they do to the general community of employers 
in America.
    If the Congress intends the Randolph-Sheppard program to employ 
people with significant disabilities in positions other than those of 
managers of the facilities, this expansion of the current program would 
require training and support in order to be successful. Funding would 
need to be identified to address the cost impact of this new training 
initiative, especially given the recognition that blind entrepreneurs 
are not rehabilitation teachers or vocational instructors. They are 
blind people, trained to operate a competitive food-service business. 
Recruiting, training, and supervising a workforce of people with other 
significant disabilities is beyond their training and experience. 
Furthermore, if the Congress believes that blind vendors should be 
required to hire a certain number of people with disabilities, it would 
need to consider why such a requirement is not made on employers 
generally. Otherwise, the effect would most certainly be to place blind 
vendors at a disadvantage as they seek to work in an increasingly 
competitive business environment.

    Issue 2: Should the Randolph-Sheppard program be opened to people 
with disabilities other than blindness?
    Response 2: At present there are 2,584 blind vendors in America 
(U.S. Department of Education, fiscal year 2004 data). Each of these 
individuals has a documented disability, objectively measured and 
verified by a medical professional. The Randolph-Sheppard program uses 
the standard commonly known as ``legal blindness,'' defined as visual 
acuity of 20/200 in the better eye with best correction or a visual 
field of 20 degrees or less.
    By contrast, other disabilities are typically functionally defined. 
There is no objective measurable definition of disability, and more to 
the point, there is no objective definition of significant disability. 
Opening the Randolph-Sheppard program to people with other types of 
disabilities would potentially displace blind people--people with 
medically verified disabilities--in favor of people who may or may not 
have disabilities of comparable significance. Even if a definition of 
significant disability could be developed and agreed upon, the effect 
would be to merely replace one person with a disability with another. 
There are a limited number of vending facilities; indeed the number has 
been gradually declining in recent years. At the same time, the States 
have waiting lists of blind people, trained and ready to go to work 
when facilities can be made available. Of course, there is a pressing 
need to expand employment opportunities for people with all types of 
disabilities. Nevertheless, to open the Randolph-Sheppard program to 
people with disabilities other than blindness, gives a false impression 
of progress. Such a move would not increase the number of employed 
people with disabilities; it would simply displace blind people, 
replacing them with others who may not face the same barriers to 
employment.

    Issue 3: Executive compensation in the Randolph-Sheppard program is 
disproportionate, leading to a small number of blind people making 
excessive salaries while others receive little or no help from the 
program.
    Response 3: According to the most recent U.S. Department of 
Education data for fiscal year 2004, the income for blind vendors in 
the Randolph-Sheppard program is $39,880 annually. This is hardly an 
executive level salary or an excessive wage. It is, however, a living 
wage. It reflects a positive, sustained effort on the part of State 
vocational rehabilitation agencies to strengthen the training of blind 
vendors and to secure better quality vending facilities.
    During the HELP Committee hearing on October 20, a number of large 
military troop dining contracts were offered as examples of excessive 
compensation of blind vendors. Yet the size of a military troop dining 
contract does not reflect the income of the individual blind vendor. 
All costs of food, food preparation, distribution, equipment, 
maintenance, and staffing are contained in the total contract amount. 
Some blind vendors operating military troop dining facilities have good 
incomes, but their incomes are in no way disproportionate to the 
compensation of people without disabilities performing the same work.
    The compensation for all managers of military troop dining 
facilities, including blind vendors, is tightly controlled by the 
Federal contracting officer. While the Randolph-Sheppard Act allows 
Federal agencies, including all branches of the military, to enter into 
``direct negotiations'' with State rehabilitation agencies, no branch 
of the military has exercised this option when selecting a Randolph-
Sheppard vendor to operate a military troop dining facility. While 
``direct negotiation'' is an option, all branches of the military opt 
to have the Randolph-Sheppard program submit detailed proposals 
alongside those of private-sector offerors under the competitive bid 
process. In this way, the military is assured that the Randolph-
Sheppard program is truly providing comparable service at a comparable 
cost. In other words, to get a military troop dining facility, the 
State rehabilitation agency, acting as the State licensing agency under 
the Randolph-Sheppard Act, must submit a competitive bid. The dollar 
amount of the contract, therefore, is comparable to the amount the 
military would pay to any other successful bidder. These contracts are 
often large, extending over a 5-year period. The blind vendor is 
compensated well, but no better than the private sector manager 
administering a similar-sized contract. The military has extensive data 
about the cost of military troop dining. It requires specified staffing 
levels, sets the wages and compensation of workers, and maintains 
detailed requirements as to the type and quality of the food to be 
served.

    Issue 4: One way of strengthening both programs would be to merge 
the two into one employment program for people with all types of 
disabilities.
    Response 4: The Randolph-Sheppard and JWOD programs are 
significantly different in their structures and purposes. The Randolph-
Sheppard program is intended to provide blind people with an 
entrepreneurial opportunity to manage a food service facility. Blind 
people are trained to function as independent business people, with all 
the opportunities and responsibilities that go along with operating a 
small business.
    By contrast, the JWOD program is designed to set aside Federal 
contracts and award them through a ``Central Nonprofit Agency,'' NISH, 
to affiliated private nonprofit agencies that employ people with 
disabilities to perform direct labor. In the case of the JWOD program, 
there is an assumption that the labor force will be less productive and 
require greater supervision and support than the ordinary workforce. 
The Committee for Purchase from People Who are Blind or Severely 
Disabled (the Federal agency that oversees the JWOD program), routinely 
assigns Federal contracts to NISH-affiliated nonprofit agencies at a 
cost 10 percent greater than the same contract would cost if it were 
administered by a private sector contractor. In other words, the 
Randolph-Sheppard program expects the blind vendor to function at a 
high level of competence necessary to manage independently a full 
service food service business; the JWOD program offers noncompetitive 
contracts as a way of providing subsidized employment to individuals 
with significant disabilities who are anticipated to perform below 
competitive standards.
    While the two programs have substantially different purposes, there 
are ways in which the programs can and do work together. In 
Albuquerque, New Mexico, and in Colorado, blind vendors operating 
military troop dining facilities voluntarily employed a workforce of 
people with significant disabilities who had been working at the 
facilities under a JWOD contract. While the NISH-affiliated nonprofit 
agency operating under the JWOD program receives elevated compensation 
in the administration of its contracts, the Randolph-Sheppard blind 
vendor does not. There are a number of possible ways in which 
cooperative relationships between the Randolph-Sheppard and the JWOD 
programs could be achieved, but the dramatically different purposes and 
structures of the programs makes the consolidation of the two programs 
ill-advised and potentially disastrous to blind Randolph-Sheppard 
vendors.

Conclusion

    The Randolph-Sheppard program establishes blind people as 
independent business persons operating food service facilities on 
Federal and other property. There is no Federal appropriation to the 
Randolph-Sheppard program. The blind vendors' income is simply the 
profit from the sale of goods and services. Whether the products and 
services are purchased by individual customers or under contract from 
the military, compensation is commensurate with the value received. 
Wages paid to blind Randolph-Sheppard vendors are comparable to 
salaries that exist for those in the general public who obtain 
employment in food service management positions at restaurants. More 
skilled, ambitious blind vendors have the opportunity for advancement, 
progressing to larger and more complex facilities.
    The JWOD program offers supervised training and employment to 
individuals with significant disabilities. NISH-affiliated nonprofit 
agencies receive noncompetitive Federal contracts, frequently at a cost 
greater than the Government would otherwise pay. The compensation of 
the disabled direct labor workforce reflects a wage scale designed for 
non-skilled employees. Executive compensation in NISH affiliated 
nonprofit agencies is not regulated, and is typically paid to 
nondisabled managers and executives.
    Congress should not make changes to the Randolph-Sheppard program 
based on limited information or mischaracterizations of the program's 
purpose and success. The Randolph-Sheppard program is not broken; it is 
well administered and provides good quality employment for blind 
individuals while providing quality products and services to its 
customers. Any change in the program's mandate or structure should not 
be undertaken without full discussion with, and involvement of all 
stakeholders--blind vendors and representatives of State Licensing 
Agencies. Thank you for your consideration.
            Sincerely,

    The member agencies of the National Council of State Agencies for 
the Blind. National Council of State Agencies for the Blind; Alabama 
Blind and Deaf Services, Department of Rehabilitation Services; Alaska 
Labor and Workforce Development Division of Vocational Rehabilitation; 
Arizona Services for the Blind and Visually Impaired; Arkansas Services 
for the Blind; California Specialized Services Division, Blind and 
Visually Impaired, Deaf and Hard of Hearing; Colorado Division of 
Vocational Rehabilitation; Connecticut Board of Education and Services 
for the Blind; Delaware Division for the Visually Impaired; District of 
Columbia Rehabilitation Services Administration Visual Impairment 
Section; Florida Division of Blind Services; Georgia Department of 
Labor/Vocational Rehabilitation program; Hawaii Services for the Blind; 
Idaho Commission for the Blind and Visually Impaired; Illinois Office 
of Rehabilitation Services Bureau of Blind Services; Indiana Blind and 
Visually Impaired Services, Family and Social Services Administration; 
Iowa Department for the Blind; Kansas Rehabilitation Services; Kentucky 
Office for the Blind; Louisiana Rehabilitation Services; Maine Division 
for the Blind and Visually Impaired; Maryland Division of 
Rehabilitation Services; Massachusetts Commission for the Blind; 
Michigan Commission for the Blind; Minnesota State Services for the 
Blind; Mississippi Office of Vocational Rehabilitation for the Blind; 
Missouri Rehabilitation Services for the Blind; Montana Vocational 
Rehabilitation--Blind and Low Vision Services; Nebraska Commission for 
the Blind and Visually Impaired; Nevada Rehabilitation Division; New 
Hampshire Services for Blind and Visually Impaired; New Jersey 
Commission for the Blind and Visually Impaired; New Mexico Commission 
for the Blind; New York State Commission for the Blind and Visually 
Handicapped; North Carolina Division of Services for the Blind; North 
Dakota Administration of Vision Services; Ohio Bureau of Services for 
the Visually Impaired; Oklahoma Visual Services Division; Oregon 
Commission for the Blind; Pennsylvania Bureau of Blindness and Visual 
Services; Rhode Island Services for the Blind and Visually Impaired; 
South Carolina Commission for the Blind; South Dakota Service to the 
Blind and Visually Impaired; Tennessee Services for the Blind and 
Visually Impaired; Texas Department of Assistive and Rehabilitative 
Services; Utah Division of Services for the Blind and Visually 
Impaired; Vermont Division for the Blind and Visually Impaired; 
Virginia Department for the Blind and Vision Impaired; Washington 
Department of Services for the Blind; West Virginia Blind and Visually 
Impaired Services; Wisconsin Blind Services; Wyoming Division of 
Vocational Rehabilitation; American Samoa Division of Vocational 
Rehabilitation; Guam Division of Vocational Rehabilitation; Northern 
Mariana Islands Office of Vocational Rehabilitation; Puerto Rico 
Vocational Rehabilitation Administration; Virgin Islands Division for 
Disabilities and Rehabilitation Services.

Prepared Statement of National Industries for the Severely Handicapped 
                                 (NISH)

   THE U.S. DEPARTMENT OF EDUCATION INTERPRETATION OF THE R-S ACT IS 
                INCONSISTENT WITH THE INTENT OF CONGRESS

    NISH believes that DOE has far exceeded Congress' original intent 
when it amended the R-S Act in 1974. The 1974 amendments substituted 
the term ``vending facility'' for ``vending stand'' and included 
``cafeterias'' within the new definition of vending facility. However, 
there is nothing in the statutory language of the act that defines the 
term ``vending facility'' to include military mess halls operated 
through the procurement process.
    Moreover, when Congress considered the term ``vending facility'' in 
amending the R-S Act, it clearly had in mind the sale or ``vending'' of 
food and other items to the public or to Government employees. This is 
apparent from the ubiquitous references in the legislative history to 
``vending concessions'' and ``vending stands.'' It is also reflected in 
House Floor remarks of Congressman Quie who, in urging passage of the 
RS Amendments, stated:

        I must stress to my colleagues that the Randolph-Sheppard 
        legislation requires appropriated dollars only for 
        administrative costs. The stands operated by the blind are 
        self-sustaining.

    Congressional Record--House, November 20, 1974, p. 36616. This 
statement is certainly not consistent with the DOE's position that the 
R-S Act priority applies to military procurement contracts using 
appropriated funds.
    The legislative history of the R-S Act is full of statements by 
Members of Congress and by witnesses for the blind organizations who 
testified in favor of the amendments which reflect overwhelmingly that 
the R-S Act was considered to be strictly a vending program operation. 
What is also important, however, is what is absent from the legislative 
history. There is no discussion of the effect of the act on the 
procurement process or how the amendments to the act might conflict 
with other procurement preferences such Section 8(a) of the Small 
Business Act or JWOD. One would expect some discussion of this in the 5 
years during which Congress considered this legislation if, in fact, 
the amendments were intended to make the R-S Act applicable to military 
procurements of food services. Such a significant change in the scope 
of the act would surely have been reflected somewhere in the 
legislative history.
    In contrast, just the opposite is true. With the exception of 
General Benade's remarks (discussed below), the legislative history is 
entirely silent on this issue. In fact, hearings held in 1970 at which 
the Special Subcommittee on Handicapped Workers considered amendments 
to JWOD at the same hearing as amendments to the R-S, reflect no intent 
or even awareness that the R-S Amendments might be in conflict with or 
overlap priorities under the JWOD legislation. Certainly this would 
have been addressed if it was intended that the R-S amendments would 
have the effect of opening up the military procurement process to R-S 
vendors. Hearings on S. 2641 and S. 3425 before the Special 
Subcommittee on Handicapped Workers of the Committee on Labor and 
Public Welfare, 91st Cong. 2d. Sess. (1970).
    The DOE has, for several years, based its interpretation of the R-S 
Act on a single brief statement of one witness--a statement that is 
belied by 5 years and thousands of pages of legislative history. We 
refer here to DOD witness Lt. General Leo Benade, an individual who, it 
should be noted, was responsible for personnel and not procurement. 
General Benade, in discussing the possible reach of the R-S Act 
amendments, stated that the act could have the effect of giving R-S 
vendors priority in military food service operations such as ``post and 
base restaurants and mess halls.'' This isolated statement by a single 
witness who was merely expressing an opinion, is DOE's only support for 
its position that Congress intended the R-S amendments to apply to 
military procurements such as mess halls. There are no statements by 
any actual Members of Congress or by anyone else, which support General 
Benade's view. Nor did the Senate and House Committees with oversight 
over Government procurement exercise any jurisdiction over the 1974 R-S 
Amendments.
    We believe a careful reading of the legislative history of the 1974 
amendments, including the context in which General Benade made his 
remarks, and the complete lack of support any where else in the 
legislative history for his view, compels one to reach a different 
conclusion than that advanced by DOE.
    We believe that DOE has not properly reviewed the legislative 
history of the act and, as a result, has interpreted it in a way which 
is inconsistent with the intent of Congress and in excess of its 
authority.
                                 ______
                                 
  Virginia Association of Community Rehabilitation 
                               Programs (vaAccses),
                                 Alexandria, VA 22312-7905,
                                                  October 28, 2005.
Hon. Michael Enzi,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, D.C. 20510.

Re: Oversight Hearing on Employment Programs for People with 
        Disabilities

    Dear Senator Enzi: The Virginia Association of Community 
Rehabilitation programs Dba vaACCSES, would like to commend the Senate 
HELP Committee for holding your hearing ``Opportunities for Too Few? 
Oversight of Federal Employment Programs for Persons with 
Disabilities'' on October 20, 2005. We applaud the committee for having 
the hearing's final goal to be on solutions--ways to address and 
further strengthen the Randolph-Sheppard and Javits-Wagner-O'Day (JWOD) 
programs, as well as increase community employment for people with 
disabilities.
    Established in 1977, vaACCSES is a not-for-profit association of 
community rehabilitation programs (CRP) that represent the most 
geographically diverse base of community rehabilitation programs 
providing employment, benefits assistance, training, day support, 
residential and other community-based support services to Virginians 
with disabilities. Currently, our 40 member organizations collectively 
serve over 9,800 Virginians with disabilities on an annual basis 
vaACCSES would like to offer the following information and public 
comment to be included in the Senate HELP Committee's October 20, 2005 
hearing record:
JWOD Program Provides Choice of Quality Jobs for Virginians With 
        Disabilities
    In 2004, 2,544 Virginians with disabilities were employed under the 
JWOD program providing Virginians with disabilities real jobs, a living 
wage and increased independence.
    In Virginia, over 95 percent of JWOD jobs allow individuals with 
disabilities to participate in integrated work settings as recognized 
by the Rehabilitation Services Administration. These Virginia citizens 
earned an average hourly wage of $10.46 plus health and welfare 
benefits while providing needed services to Federal agencies and 
military installations. The average wage for JWOD services in Virginia 
exceeds the national JWOD average wage of $9.14 and significantly 
exceeds the Federal minimum wage of $5.15 per hour by over $5.00 per 
hour.
    Often more important to Virginians with disabilities than a living 
wage, is health insurance and other benefits. According to many 
national and State reports, the fear of losing health benefits from 
Medicaid and Medicare keeps many individuals from working full time 
and/or even working at all. JWOD jobs provide these needed benefits and 
allow individuals that are blind or have severe disabilities to achieve 
greater independence as it enables many individuals to reduce 
dependence on Government support and join the ranks of taxpayers.
JWOD Jobs vs. Community Jobs
    During the hearing, community rehabilitation programs that operate 
JWOD contracts were criticized for not advancing more individuals with 
disabilities off of JWOD contract work sites and into community-based 
competitive employment. However, the primary focus of the JWOD Act was 
never intended to place individuals in competitive community-based 
employment. The primary focus of the JWOD Act was to leverage the 
Federal Government's need to procure goods and services with the 
socioeconomic need to provide employment opportunities for individuals 
with severe disabilities. To criticize the act for not fulfilling a 
function it was never designed to fulfill is unfair.
    However, many individuals with disabilities learn valued work 
skills on JWOD contract sites and choose to move into competitive 
jobs--often with the Federal Government. In Virginia, CRPs advanced or 
``graduated'' 837 Virginians with disabilities from JWOD contract jobs 
to job placements in the community. Albeit a good statistic for 2004, 
the bottom line is that it is their decision to make--not ours.
    Choice of employment options is paramount. A full continuum of 
employment services, supports and opportunities is critical to ensure 
that all individuals with disabilities and multiple levels of ability 
can choose to participate in some form of employment. Simply because 
supported employment or community employment is seen by some 
professionals to be ideal for individuals with disabilities or that 
some individuals believe it is ideal for them--does not necessarily 
mean that it is ideal for all or that all individuals with disabilities 
would choose competitive employment in the community. Most often, a 
JWOD job is just one employment option available to individuals with 
disabilities. Other options include center-based employment 
(``sheltered work''), group employment or individual competitive 
employment in the community. It is an individual's right to choose what 
employment option is best for them.

JWOD Jobs Are ``Real'' or ``Normal'' Jobs
    The committee report gives the impression when it distinguishes 
between JWOD jobs and ``normal'' jobs. It should be noted that JWOD 
jobs are not made up to create work for an individual with a 
disability. JWOD jobs are ``real'' and ``normal'' jobs. Services for 
the Federal Government such as mail services, janitorial, fulfillment, 
document management and other valued services need to be performed. 
Military uniforms need to be made and other products purchased by the 
Federal Government need to be manufactured. If these JWOD jobs were not 
performed by individuals with disabilities--the work would be done by 
other contractors or Federal employees.
Executive Compensation and Governance
    The hearing also focused on executive compensation in the context 
of widespread abuse and fraud at agencies with JWOD contracts. However, 
very little evidence was given in the way of facts to back up the 
accusations. Although a chart discussing five executive salaries was 
presented, and a recent article in the Oregonian highlighted 10 of the 
highest paid CEOs of the 50 largest JWOD producing non-profits, no 
effort was made to put this in context with the other 600+ JWOD 
producing nonprofits. Five or ten organizations out of 600+ 
organizations with CEO salaries of $300k+ are not necessarily an 
example of widespread excessive compensation. In addition, there was no 
mention of what percentage the CEO's salary represented in the context 
of the organization's total operating budget.
    Over the years, community rehabilitation programs have diversified 
their services through innovative commercial lines of business and 
other entrepreneurial enterprise. JWOD, in many instances, is just a 
portion of a community rehabilitation program's overall operating 
budget. The industry's ability to recruit competent and talented CEOs 
to provide quality leadership should be protected in order to continue 
to better serve citizens with disabilities.
    JWOD producing CRPs in Virginia have a myriad of regulatory and 
best practices oversight including volunteer Board of Directors, State 
licensing and auditing authorities, Federal rules and regulations under 
Department of Labor, OSHA, IRS, JWOD direct labor ratios and disability 
determination requirements and other Federal and State entities. In 
Virginia, all community rehabilitation programs that provide employment 
hold CARF accreditation, a national accreditation based on national 
administrative and programmatic ``best practice'' standards with a 
foundation of participant choice and outcomes.
    Fraud should not be tolerated. However, we hope that the JWOD 
program and its 600+ JWOD producing non-profits do not suffer because 
of a few. A valued program like JWOD should be protected at all costs. 
We look forward to working with the President's Committee for Purchase 
from People Who are Blind or Severely Disabled (the Committee) and NISH 
as they continue to work to improve transparency and governance in the 
JWOD program.

Recommendations to Increase Employment of Individuals With Disabilities
    Although the employment of citizens with disabilities in the JWOD 
program has increased from approximately 32,000 to nearly 42,000 over 
the past 5 years, tremendous growth is still possible.
    (1) Encourage Federal agencies to create additional employment 
opportunities for citizens with disabilities by purchasing services and 
products through the JWOD program.
    (2) Require quotas in Federal agencies to convert contracts to JWOD 
similar to small, women-owned or minority-owned business contracts.
    Additional citizens with disabilities can experience community-
based competitive employment by implementing the following:
    (1) Make funding for employment services to people with 
disabilities a priority--in vocational rehabilitation as well as with 
Medicaid.
    (2) Increase funding appropriated to States through the 
Rehabilitation Services Administration to support community employment. 
Additional ``110'' dollars will increase the provision of work 
adjustment, situational assessments, job development and job placement 
for individuals with disabilities. Over the last decade, employment 
services funding to the States has remained flat or has been decreased. 
Flat funding means fewer services as the cost of inflation eats away at 
the purchasing power of the dollar.
    (3) Encourage use of the private not-for-profit sector to provide 
these services. The private not-for-profit sector can usually provide 
these services in a more cost effective and flexible manner than State 
vocational rehabilitation agencies.
    In conclusion, thank you for taking the time to review these 
important Federal programs that provide valued employment opportunities 
for citizens with disabilities. We hope you will consider our 
perspective as you consider any changes to Federal employment 
legislation affecting citizens with disabilities. Please do not 
hesitate to contact us for additional information or if we can provide 
assistance in any way.
    Again, thank you.
            Sincerely,
                                            Karen Tefelski,
                                                Executive Director.
                                 ______
                                 
                   Prepared Statement of Richard Bird

    Chairman Enzi and members of the committee, I appreciate the 
opportunity to submit this statement on the oversight hearing entitled 
``Opportunities for Too Few,'' a review of the Randolph-Sheppard blind 
vending facility program and the programs operating under the Javits-
Wagner-O'Day Act.
    The Randolph-Sheppard Vendors of America, (RSVA), is the oldest and 
largest organization of Licensed Blind Vendors in the United States. We 
are dedicated to working to improve business opportunities for blind 
licensees, both through the attempts to enforce the priority to operate 
concessions, including cafeterias, on all Federal properties, including 
the Department of Defense, and by assisting existing business locations 
to increase incomes for blind managers.
    Since its establishment by Congress in I936, the employment 
opportunities for blind individuals created through the Randolph-
Sheppard Act represents the single most successful program for 
providing meaningful livelihoods for the blind ever created by the 
Federal establishment including the Vocational Rehabilitation Act and 
the Americans with Disabilities Act, or the Javits-Wagner-O'Day Act.
    Since 1936, more than 40,000 blind and visually impaired Americans 
have had the opportunity to own their own homes, raise and educate 
their children, pay taxes, and be contributing members of their 
communities like all other Americans.
    As a veteran of the Vietnam War, who lost his vision after active 
duty, I have been extremely blessed to be able to work as a Licensed 
Blind Manager in the Ohio Business Enterprise program for the Blind.
    I currently manage a vending machine business in the main Post 
Office in Cleveland, Ohio.
    As President of RSVA, I talk daily to blind persons involved in the 
vending program throughout the United States. Some of us make very 
meager incomes and a very few make substantial incomes. The national 
average among blind vendors is now slightly above $37,000.00 per year. 
While our average incomes have not kept pace with salaries earned by 
Americans generally over the past 30 years, it is certainly far better 
than sitting home with nothing to do, as is the case for more than 70 
percent of blind and visually impaired Americans, according to 
statistics provided by the U.S. Department of Labor.
    As I understand it, one of the issues before this oversight hearing 
is why the Randolph-Sheppard program is shrinking instead of growing as 
was the intent of Congress in the 1974 Amendments to the act. While the 
answers to this question are very clear, they certainly are not simple.
    Generally speaking, the Randolph-Sheppard program is the victim of 
a benign and often indifferent Federal and State Government 
bureaucracy.
    Federal Property Managing agencies, led principally by the U.S. 
Department of Veterans Affairs and the U.S. Postal Service, refuse to 
recognize the Priority for businesses operated by blind persons. Both 
the VA and the USPS have seemingly preferred expensive litigation to 
compliance with the provisions of the act.
    While the U.S. Congress established the program, it has never seen 
its way to provide any funding for the expansion or growth of the 
program.
    Today, as is historically true, the Randolph-Sheppard programs in 
the various States is largely funded by special charges levied against 
the incomes of Licensed Blind Vendors.
    It is also fair to point out, that the State Licensing Agencies, 
designated by the Rehabilitation Services Administration in the U.S. 
Department of Education, have generally been very lack luster in their 
efforts to advocate for the program. This is demonstrated by a failure 
to aggressively seek new business opportunities, particularly by 
ensuring that they obtain income from all vending machines located on 
Federal and State property within the State.
    RSVA is very proud to have worked with our national parent 
organization, the American Council of the Blind, (ACB) in bringing 
about the opportunity for Licensed Blind Vendors to manage Troop 
Feeding Contracts on military property, beginning with the contract at 
the Barksdale Air Force Base in Northern Louisiana in 1993. Over the 
years, we have spent literally hundreds of thousands of dollars since 
then to protect this opportunity and to expand it particularly in the 
Fourth Federal Circuit Court Decision in 2001 in the NISH v. the DOD 
case which affirmed the Priority Right contained in the act on property 
of the U.S. Department of Defense.
    To date, there are still only 36 DOD Appropriated Fund Contracts 
being managed by Licensed Blind Vendors. A very few blind individuals 
make very high incomes. Most earn in the low six figures, and several 
managers make substantially less.
    Another issue you are considering is to what extent, do we provide 
employment opportunities to other disabled individuals. While we are 
making an increased effort at providing such employment opportunities 
(Ohio, Georgia, Illinois, and several other States have initiated 
formal requirements for such employment), it is important to keep in 
mind the unique differences between the Randolph-Sheppard and Javits-
Wagner-O'Day programs.
    The Randolph-Sheppard program, since its establishment, has been an 
entrepreneurial program providing training and opportunities for blind 
and visually impaired individuals to own, grow and operate their own 
businesses. Like the MESBIC program of the late 1960's, and its 
successor program, the 8A, the Randolph-Sheppard program has given 
thousands of blind and visually impaired Americans the opportunity to 
participate fully in the economic life of our communities.
    Unlike the programs managed by National Industries for the Blind, 
(NIB), and particularly those of the National Industries for the 
Severely Handicapped, (NISH), many blind licensed vendors carp more 
than do the program officials who operate the program.
    While NIB, working within updated Federal Wage and Hour Laws, pay 
blind workers in sheltered workshops, at or above the prevailing 
Federal Minimum Wage, Local Nonprofits, operated under the NISH 
umbrella, can, and do, pay disabled workers far below the Federal 
Minimum Wage, including on DOD Contracts, while NISH executives make 
very substantial salaries.
    All disabled employees working in Randolph-Sheppard Vending 
Facilities make at least the prevailing Federal Minimum Wage or better.
    A major problem for blind vendors in the employment of disabled 
workers is our lack of ability to identify whether employment 
candidates qualify as disabled. The NISH local participating nonprofits 
are set up, by their very nature, to evaluate potential candidates to 
determine if they meet the qualifications as disabled. There simply is 
no comparable system in place for the Randolph-Sheppard programs for 
the blind. Unless a potential employee is referred by the Vocational 
Rehabilitation Agency in the State, the individual blind vendor will 
have no means of determining if potential employees qualify as 
disabled. All of that is to say, that I believe that our employment of 
disabled workers is far higher than our reports would indicate.
    It is the sincere hope of RSVA that this Oversight Hearing will 
lead to constructive recommendations on ways and means to strengthen 
the Randolph-Sheppard program and further expand employment 
opportunities for blind and visually impaired individuals. One step 
would be to recommend designated funding to support the growth and 
expansion of the Randolph-Sheppard program through a separate 
appropriation for that purpose to the Rehabilitation Services 
Administration.
    A Senate Resolution demanding that the major Federal Property 
Managing Agencies immediately take steps to comply with the priority 
contained in the act might get some long overdue attention.
    Again, thank you for the opportunity to present these comments.
                                 ______
                                 
              Randolph Sheppard Vendors of America,
                                  Terrytown, LA 70056-4104,
                                                  October 20, 2005.
Hon. Mike Enzi,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, D.C. 20510.

    Dear Senator Enzi: I am Richard Bird, President of the Randolph-
Sheppard Vendors of America (RSVA), the oldest and largest organization 
of Licensed Blind Managers working in the Randolph-Sheppard Vending 
Facilities program for the Blind.
    The purpose of my letter is to express our dissatisfaction with the 
handling of the oversight hearings on the JWOD and Randolph-Sheppard 
programs scheduled for October 20, 2005.
    In the first place, we only learned of the subject of the hearing 
on Wednesday, October I2, 2005, leaving us very inadequate time to be 
able to communicate our concerns on important issues to the members and 
staff of the Senate HELP Committee. If your staff did not, in fact, get 
around to scheduling this oversight hearing until October 12, then it 
says volumes about the efficiency of the committee's work. If they 
planned it earlier, and simply did not notify us earlier, then it 
speaks volumes about staff insensitivity to the rights of program 
participants to communicate their views to the U.S. Senate.
    In the second place, the staff did not invite a Licensed Blind 
Manager, to testify at the hearing, or to name a representative to 
speak on our behalf. Similarly, no one from any State Licensing Agency 
(SLA) was invited to testify. I understand that in the case of the JWOD 
program, a blind worker from a sheltered workshop has been invited to 
testify.
    The only blind person invited to testify is Jim Gashel who 
represents the National Federation of the Blind, one of many 
organizations working on issues of concern to blind and visually 
impaired Americans. Jim does not speak for the American Council of the 
Blind (ACB), the Nation's largest consumer based organization, or the 
RSVA, which, as I said earlier, is the largest organization of Licensed 
Blind Managers working in the program.
    Let me tell you that blind managers throughout the Nation, and 
their families, have already begun to recognize that the U.S. Senate, 
in particular, and the Congress, in general, are indifferent to our 
needs and concerns, even though the Randolph-Sheppard program for the 
Blind represents the only successful employment program ever created by 
Congress and the Federal Government.
    The actions of the staff of the HELP Committee to block us out of 
the process will only increase our sense of disenfranchisement.
    Obviously, it is too late to do anything about the lack of adequate 
notice, but it is not too late to permit us to name a representative to 
appear before the HELP Committee during the oversight hearings.
            Sincerely,
                                              Richard Bird,
                                                         President.
                                 ______
                                 
     Prepared Statement of the American Rehab ACTion Network (ARAN)

    The American Rehab ACTion Network (ARAN) is an organization of 
public and private professionals, educators, persons with disabilities 
and their families, friends, and businesses, working together to 
positively affect the public Vocational Rehabilitation (VR) program.
    ARAN thanks the HELP Committee for this opportunity to express its 
support for the Randolph-Sheppard and Javits-Wagner-O'Day (JWOD) 
programs. These programs provide essential services to individuals with 
disabilities, which can not be supplanted by other comparable services. 
Many individuals with significant disabilities can not achieve 
employment without provision of an array of rehabilitation and 
vocational services. ARAN urges the committee not to modify the 
Randolph-Sheppard and JWOD programs without full participation of 
consumers and other stakeholders in assessing their benefits, costs, 
efficiencies, and deficiencies, and the implications of proposed 
changes for other programs, including the public Vocational 
Rehabilitation program.
    Vocational Rehabilitation programs are highly effective in helping 
persons with disabilities achieve competitive, community integrated 
employment. A Congressionally-mandated, 3 year longitudinal study of 
the VR program carried out by the Research Triangle Institute showed 
that 69 percent of VR consumers achieved an employment outcome as a 
result of VR services. Seventy-five percent of consumers receiving VR 
services achieved jobs in the competitive labor market. Of this 
population, 83 percent remained employed after 1 year. Among 
individuals completing VR services, 44 percent no longer required 
public assistance.
    ARAN appreciates the attention of the HELP Committee and its 
commitment to strengthening employment opportunities for people with 
disabilities. ARAN would like to express the following concerns related 
to the committee's investigation and report:

1. Quality and Extent of Federal Oversight is Lacking

    The committee report found a significant lack of information, data, 
and oversight of Randolph-Sheppard and JWOD programs on the part of the 
Department of Education. ARAN is concerned that recent, substantial 
reductions in the numbers of experienced, qualified staff at the 
Rehabilitation Services Administration (RSA) will further weaken the 
Department's ability to offer effective and comprehensive technical 
assistance to, and oversight of, State VR agencies and the programs 
they administer. ARAN believes that a strong RSA, headed by a 
Commissioner who demonstrates knowledge and expertise of vocational 
rehabilitation services and staffed by experienced personnel in 
sufficient numbers to provide assistance and demand accountability, is 
the best tool to improve performance in job training programs for 
individuals with disabilities. This level of knowledge of and expertise 
in employment services for persons with disabilities is not evidenced 
by current Department of Education staffing plans.

2. The Demands on the Public VR System are Increasing

    The number of families/individuals on welfare has declined by 
approximately 40 percent since 1996. As States move deeper into their 
TANF caseloads, they are finding substantial numbers of individuals 
with unidentified or undisclosed disabilities facing barriers to 
employment. State welfare agencies are increasingly turning to VR 
agencies for assistance in getting these individuals into the 
workforce.
    Similarly, heightened efforts are being made to coordinate VR 
services with schools to serve students with disabilities who are 
transitioning from special education and dependency on public benefits 
to work. The return on the Federal investment in special education can 
only be maximized with a strong public VR program that is able to serve 
these youth. This population of transitioning youth now represents 13.5 
percent of the consumers participating in VR services.
    Given adequate resources, the public VR program can serve these 
young people very successfully and cost-effectively. Sixty-three 
percent of young adults below age 25 who received VR services 
successfully went to work, with most entering competitive employment. 
Young adults with disabilities entering competitive employment had a 
significantly reduced need for public financial assistance, such as SSI 
benefits.

3. The Public VR Program is Severely Underfunded

    VR is a cost-effective program, and every dollar invested in it 
returns more than $10 in consumer employment taxes paid and reduced 
reliance on public financial assistance. The reauthorization of the 
Rehabilitation Act, and the new challenges of the changing environment 
mentioned above, place increasing demands on the VR program. The 
resources available to VR to meet these challenges are not keeping 
pace. Appropriated Federal funding, matched with State monies, is 
adequate to meet the needs of only one in 20 individuals with 
disabilities who could benefit from Vocational Rehabilitation. While VR 
caseloads have increased, and the cost of providing its services has 
grown substantially, its funding has gone up only as much as the 
consumer price index. As the demands on VR rise, its funding is 
severely lagging behind the real cost of providing services to its 
growing population.
                                 ______
                                 
                        Booz  Allen  Hamilton Inc.,
                                     McLean, VA 22102-3838,
                                                  October 25, 2005.
Hon. Michael B. Enzi,
Chairman,
Committee on Health, Education, Labor, and Pensions,
Washington, D.C. 20515.

    Dear Chairman Enzi: I am writing in response to your report and 
recent hearing on Federal programs for the employment of people with 
disabilities. I write to you as a Board Member of ServiceSource, a 
Community Rehabilitation Program; from the perspective of a CEO from a 
major private company, Booz Allen Hamilton; and most importantly as the 
father of a son working on a Javits-Wagner-O'Day (JWOD) contract. 
ServiceSource, Inc., based in Alexandria, VA, has over 45 JWOD 
Government contracts providing a wide range of services, including the 
mail services contract at the U.S. Department of Agriculture in 
Beltsville, MD where my son Mark is employed as a mail clerk.
    While there is always room to improve any business function or 
program, I feel that the JWOD program has been one of the best, if not 
the best, employment program for people with disabilities in the United 
States.
    I would like to address a number of issues related to your report 
and recent hearings.
    1. Your report cites a lack of outplacement from the JWOD program 
as an ``Undesirable Employment Outcome.'' I respectfully disagree with 
the report's assumptions that the lack of placement is a negative 
aspect of JWOD. In fact, the desire to maintain the JWOD job often 
shows the importance of the job and the good job match for the 
employee.
    People with disabilities often do not want to leave their JWOD jobs 
because their JWOD service jobs pay more than the average placement job 
and because they receive a variety of wrap-around support services from 
their non-profit employer. The JWOD program requires that each worker 
be assessed annually and offered competitive employment outplacement 
assistance. Mr. Lawheed's testimony that CRPs keep their most skilled 
workers with disabilities on JWOD jobs to remain productive is simply 
false.
    JWOD wages are determined by the Department of Labor's Wage 
Determination. In addition, as part of the Service Contract Act, JWOD 
jobs pay for health benefits, which are crucial to all Americans and 
especially to people with disabilities. People working on JWOD jobs at 
ServiceSource currently earn an average of $10.89 per hour plus an 
additional $2.59 per hour which is used to provide health insurance 
coverage. These wages are comparable to other Government contract jobs 
for the same work.
    2. Your report cites that JWOD does not fulfill Congressional 
intent. The report states that JWOD does not help people with 
disabilities move up and out of JWOD into ``normal'' jobs. Your report 
goes on to say that JWOD jobs are not consistent with the current laws 
of IDEA, ADA and the Rehabilitation Acts which encourage integration.
    First, it is offensive to say that JWOD jobs are not ``normal.'' My 
son's job is important to him and is as normal as any other job on the 
market. Secondly, the JWOD Government contract job is as integrated as 
any Government contract operation. The Government has a requirement to 
fulfill a specific service. ServiceSource secures that contract and 
fills the positions with people with disabilities. These committed 
employees are integrated in the Government office setting and interact 
with both ServiceSource colleagues and other Federal Government 
employees.
    While I applaud the advances that the IDEA, ADA and Rehabilitation 
Acts have brought for people with disabilities, the unemployment rate, 
currently at 70 percent, has not improved. We must do more. We should 
not dismantle one program that is working. Instead, we should model 
this program, promote greater use of it by the Federal Government, and 
encourage the business sector and State and local governments to follow 
suit.
    Maintaining the 75 percent ratio is a safeguard for the JWOD 
program to ensure that a majority of the jobs filled on JWOD contracts 
are done so by people with disabilities. The suggestion to reduce this 
ratio would only result in reducing the already unacceptably low number 
of jobs for people with disabilities.
    3. Your report and the public comments made by members of the HELP 
Committee suggest that all of you are looking to maximize opportunities 
for people with disabilities and have come up with a way that Randolph-
Sheppard and JWOD can work together.
    At Fort Carson, Colorado, ServiceSource currently works as a 
subcontractor to Kevan Worley and Associates on a dining facility 
attendant (DFA) contract. Worley is the prime contractor and blind 
entrepreneur operating under the Randolph-Sheppard Act, while 
ServiceSource holds a subcontract for more than 140 direct labor 
positions filled by people with disabilities under the JWOD program.
    This working model is a good place to start the dialogue that will 
allow both programs to succeed and take full advantage of what the 
programs were originally intended to do.
    4.Your report cites the compensation of a few Chief Executive 
Officers whose CRPs participate in the JWOD program as examples of 
``exploiting'' the JWOD program for financial gain.
    While I share your concern over ensuring financial accountability, 
I urge you to remember that these are five examples out of more than 
600 CRPs participating in the JWOD program. I am confident that these 
examples are the exception and not the norm.
    Further, and as a Board Member of a large CRP, it is my 
responsibility to ensure that we meet both the letter and intent of IRS 
executive compensation requirements and that the CEO of our company is 
fairly and competitively compensated. We do a formal annual review, 
which has been independently audited, to ensure we are meeting legal, 
fiduciary and good mission standards given the size, scope, and 
complexity of our company.
    In closing, I thank you for your efforts to improve Federal 
programs that provide jobs for people with disabilities. It is 
imperative that we do more and dramatically increase the number of 
people with disabilities who are employed through JWOD (currently 
45,000).
    Currently, less than 1 percent of Federal procurement dollars are 
spent on the Javits-Wagner-O'Day Program. If every Government agency 
was more aggressive in its use of procurement options to encourage 
employment for people with disabilities under JWOD, we could begin to 
impact the 15 million Americans with disabilities who want to work but 
are unable to secure jobs.
    I have enclosed a letter from my son Mark along with additional 
information about ServiceSource and our involvement with the Javits-
Wagner-O'Day program. I encourage you to visit our programs, 
particularly the DFA contract at Fort Carson, CO, where the Randolph-
Sheppard program and JWOD are thriving.
            Sincerely,
                                   Ralph W. Shrader, Ph.D.,
                                  ServiceSource Board of Directors.
                                 ______
                                 
            Prepared Statement of Robert R. Humphreys, Esq.

    Chairman Enzi and members of the committee, thank you for the 
opportunity to provide this statement for the record on the oversight 
hearing entitled ``Opportunities for Too Few,'' a review of the 
Randolph-Sheppard blind vending facility program and the programs 
operating under the Javits-Wagner-O'Day Act.
    By way of introduction, I was a member of the staff of this 
committee from 1971 to 1977, serving as its Special Counsel. In that 
capacity I was responsible for drafting for this committee's action the 
Rehabilitation Act of 1973, the Black Lung Benefits Act, and the 
Randolph-Sheppard Act Amendments of 1974, among other legislation. 
Subsequent to my service with the Senate, I was Commissioner of the 
Rehabilitation Services Administration. In that capacity I managed 
national policy and administration for the vocational rehabilitation 
and independent living programs, the President's Committee on Mental 
Retardation, the Developmental Disabilities Administration, and 
rehabilitation research and utilization. Additionally, insofar as my 
background and experience pertain to this hearing, I was also 
responsible for national policy and administration for the Randolph-
Sheppard blind vending facility program. Following my tenure as RSA 
Commissioner to the present day, I have devoted a large part of my 
professional life to addressing legal matters surrounding the Randolph-
Sheppard program, as an arbitrator, as an attorney at both trial and 
appellate levels, and as Legal Counsel to the Randolph-Sheppard Vendors 
of America.
    I want to begin by relating to the committee some of the relevant 
history of the vending facility program, and my impressions of its 
current status. Then I will address the NISH community rehabilitation 
program, and problems arising from competition for military dining 
service contracts. Finally, and respectfully, I would like to make some 
suggestions as to what the committee might do to stabilize relations 
between the two programs and enable them to live together in harmony 
rather than discord.

                   THE BLIND VENDING FACILITY PROGRAM

    The 1974 amendments to the Randolph-Sheppard Act, 20 U.S.C.  107-
107f., dramatically strengthened the program for blind vendors by 
requiring a priority for blind vendors on all Federal property. The 
amendments severely curtailed any limitation on the placement or 
operation of blind vending facilities. Most income from vending 
machines on Federal property was assigned to the Randolph-Sheppard 
programs in each State. Substantial power and authority were vested in 
State committees of Blind Vendors through joint decisionmaking on 
program policy, plans, and management.
    Congress expected the program to flourish as a result of these 
changes, asserting that the number of blind vendors could be expected 
to double within 5 years. More than 30 years later, the total number of 
blind vending facilities has declined substantially--from approximately 
3,400 to 2,600. Hundreds of blind Americans, ready and able to work, 
have been denied satisfying gainful employment because of the erosion 
of the program. The obstacles to growth in the Randolph-Sheppard 
program have not been removed. Indeed, the unemployment rate for blind 
people in the United States is approximately 75 percent, a level that 
should shock every American. Congressional intent has been ignored, 
misapplied, and frustrated by Federal property managing agencies, by 
courts, and even by the Department of Education, which is responsible 
for the program's administration and advocacy for blind vendors.
    The Department of Education has eliminated the regional offices of 
the Rehabilitation Services Administration, which will result in less 
technical assistance, monitoring, and oversight for State licensing 
agencies administering Randolph-Sheppard programs. The Office for the 
Blind and Visually Impaired at RSA's central office, which includes the 
staff who administer the vending facility program, is being abolished 
as well. Only two professional individuals remain to provide support 
for the entire Randolph-Sheppard program. One of those individuals 
works essentially full time on arbitrations under the act. The 1974 
amendments required that 10 additional staff would be supplied to RSA 
for Randolph-Sheppard program administration. In 1982, as a consequence 
of litigation against the Department of Education by national blindness 
organizations, the Department agreed to provide the additional staff. 
Although some work time of regional staff was allocated to this 
purpose, the full complement of Randolph-Sheppard staff has never been 
provided by the Department. With the abolition of the regional offices, 
even the part-time responsibilities of several staff have been 
eliminated, in contravention of the 1982 settlement agreement.
    The Department of Defense has resisted the placement of blind 
vending facilities on DOD property. Moreover, even though the Congress 
demanded otherwise, DOD has protected its nonappropriated fund 
activities at the expense of blind vendors and their livelihoods, and 
State programs have been severely weakened as a result. Although income 
from vending machines on all Federal property was intended by the 
Congress and this committee to be shared with blind vendors and their 
programs, DOD has evaded its responsibilities by transferring vending 
machines to the Army and Air Force Exchange Service and the Navy 
Exchange, asserting that exchange systems are exempt from income 
sharing. That was not the intent of Congress. In addition, despite the 
clear priority for blind vendors set forth in the Randolph-Sheppard 
Act, DOD installations have allowed community rehabilitation programs 
under NISH (formerly National Industries for the Severely Handicapped) 
to operate military dining facilities. I understand that this is one of 
the primary issues the committee intends to address, and I will express 
my concerns about this matter later in this statement.
    The Department of Veterans Affairs has for many years contested the 
application of the blind vendor priority to VA hospitals and other VA 
facilities, engaging States such as Alabama in protracted litigation 
that is without merit. There are but a handful of blind vendors in VA 
facilities nationwide.
    Although the U.S. Postal Service has accepted placement of a 
substantial number of blind vending facilities, Post Offices have 
charged blind vendors commissions to operate on their properties--a 
clear violation of the act--and have refused to allow the creation of 
blind vendor operated routes of vending machines at postal stations.
    The General Services Administration has set up food courts in 
larger Federal buildings, and blind vendors either have been removed 
from GSA vending facilities, or they have been precluded from operating 
within the food court environment.
    All the foregoing restrictions have limited the placement of 
vending facilities on Federal property, in direct violation of the 
Randolph-Sheppard Act. Moreover, increased security at all Federal 
buildings and installations has reduced blind vending facility 
patronage at such buildings and installations. That fact, coupled with 
the ever increasing number of options available to Federal employees 
through national fast food franchises and food courts, and the use by 
Federal employees of microwave ovens and coffee makers, have all 
resulted in a constriction in the incomes of many blind vendors, and 
the elimination of new opportunities for vending operations.

                    THE JAVITS-WAGNER-O'DAY PROGRAM

    The Javits-Wagner-O'Day Act, or JWOD, was created to provide 
sheltered workshop employment and rehabilitative work activity for 
severely disabled individuals. The JWOD program is accorded a 
preference in the provision of services to Federal agencies, such as 
grounds maintenance, janitorial service, and typewriter repair, through 
NISH (formerly National Industries for the Severely Handicapped) 
community rehabilitation programs. The President's Committee for 
Purchase from People who are Blind or otherwise Disabled puts NISH 
services on a procurement list, from which Federal agencies are to 
provide a preference in acquiring such services. Currently some 40,000 
individuals, including persons with physical disabilities as well as 
those with mental retardation, mental illness, drug addiction, and 
alcohol addiction, are believed to be employed under this program. 
Under an exemption from the Fair Labor Standards Act and the Service 
Contracts Act, many such individuals earn far less than the minimum 
wage. Each contract awarded by a Federal agency to a NISH community 
rehabilitation program must include a fee amounting to 4 percent of the 
contract amount, which goes to NISH for administrative costs.
    In the late 1980s military installations began to award to NISH 
community rehabilitation programs food service contracts to provide 
kitchen assistance and food preparation, ignoring the blind vendor 
priority. Prior to that time such duties were performed by uniformed 
enlisted personnel. The number of those contracts grew over the ensuing 
years, and they now number over 100. In 1993 the Louisiana State 
licensing agency succeeded in obtaining the first military dining 
services contract under Randolph-Sheppard at Barksdale Air Force Base, 
and a blind vendor was assigned to manage the contract. Since then, 
some 35 contracts have been awarded to State licensing agencies for 
operation by blind vendors. Several Federal courts have ruled that the 
Randolph-Sheppard priority is superior to the Javits-Wagner-O'Day 
preference, and NISH's insistence that it should be awarded military 
dining contracts resulted in congressional activity that for the past 3 
years has frozen both Randolph-Sheppard and NISH contracts in place, 
denying State licensing agency access to any NISH contracts, despite 
the priority accorded State agencies under the Randolph-Sheppard Act.
    Organizations supporting NISH have argued that community 
rehabilitation programs operating military dining contracts provide 
employment to many people with disabilities, while a blind vending 
facility provides lucrative work to just one blind vendor. It is even 
asserted that blind vendors operating military dining contracts have 
become millionaires. Quite apart from the fact that acquiring wealth is 
part of the American Dream, and that a person should not be denied 
wealth because he or she is blind or otherwise disabled, the average 
blind military dining service provider's income is around $100,000, and 
many such blind vendors make considerably less than that.
    It is respectfully suggested that this committee investigate the 
salaries of the non-disabled NISH agency managers of military dining 
contracts, and compare those with the minuscule wages paid their 
disabled workers. The 4 percent of gross military dining contract 
awards provided to NISH agencies brings NISH millions of dollars 
annually. NISH workers may make as little as 80 cents per hour.
    It is not my purpose to castigate NISH, but to point out the 
unfairness of claims and assertions by NISH and its supporting 
organizations made against the blind vending facility program. NISH and 
its agencies have a wide array of opportunities for providing 
employment to disabled workers in a constellation of service 
industries. Blind vendors generally operate only in the food service 
industry. Blind vendors do not oppose the use of NISH workers in 
subcontracts for military dining service, to provide kitchen service, 
cleaning, and food preparation. They do, however, strenuously oppose 
any erosion of the priority accorded them under the Randolph-Sheppard 
Act. They have a legitimate fear and concern that once the priority is 
abolished in one area, it is more than likely that the priority will be 
abolished in all areas, and their jobs hang in the balance.

          HARMONIZING THE RANDOLPH-SHEPPARD AND JWOD PROGRAMS

    I believe both NISH and its community rehabilitation programs and 
the blind vending facility programs operating through the States can 
operate military dining services without unhelpful or destructive 
actions by Congress or any affected organization. I believe the 
Randolph-Sheppard Vendors of America, the American Council of the 
Blind, and other organizations of and for the blind would support 
policy, regulation, or legislation that would (1) preserve the 
Randolph-Sheppard priority, and (2) ensure the continued and expanded 
employment of severely disabled NISH workers at military installations. 
These dual purposes can be realized by reaffirming the blind vendor 
priority for any new military dining contracts, together with a 
contract requirement that any subcontract for mess attendant (kitchen, 
cleaning, and food preparation) services shall be offered first to a 
qualified community rehabilitation agency. Thus, NISH worker jobs would 
be preserved and blind vendors would be assured that their priority is 
not affected.
    Mr. Chairman, I stand ready to assist the committee and its staff 
in developing a constructive solution to an issue that is in need of 
your attention.
            Respectfully submitted,
                                       Robert R. Humphreys.
                                 ______
                                 
                Prepared Statement of Steven B. Schwalb
    Mr. Chairman and members of the committee, I am pleased to submit 
the following statement regarding the committee hearing held on October 
20, 2005.

Background

    The Senate Health, Education, Labor, and Pensions (HELP) Committee 
held a hearing on October 20, 2005, titled, ``Opportunities for Too 
Few? Oversight of Federal Employment programs for Persons with 
Disabilities.'' The hearing, and the HELP staff investigation conducted 
prior to the hearing, examined both the Randolph-Sheppard program and 
the Javits-Wagner-O'Day (JWOD) program. Although the JWOD program does 
not fall under the direct oversight of the HELP Committee, and the 
Federal agency responsible for administering the JWOD Act (41 U.S.C. 
46-48c) was not asked to provide testimony, some questions and comments 
raised during the hearing have led the Committee for Purchase From 
People Who Are Blind or Severely Disabled (Committee for Purchase) to 
submit a written statement for the record.

Statement

    The JWOD program generates employment for over 45,000 people who 
are blind or severely disabled, through more than 600 community-based 
nonprofit agencies across the Nation. In fact, it is the single largest 
employer of people who are blind or have other severe disabilities in 
the United States. There are many different, valid opinions regarding 
the best way for our Government to assist in the employment of 
Americans with the most significant disabilities. The Committee for 
Purchase believes that the JWOD program is meeting its clearly defined 
statutory purpose, which is to create jobs for these Americans in the 
manufacture of products and delivery of services for the Federal 
Government, through nonprofit agencies that have no less than 75 
percent of all direct labor performed by people who are blind or who 
have other severe disabilities.
    As the Federal agency responsible for administering the JWOD Act, 
the Committee for Purchase guides and monitors the JWOD program's 
performance. In accordance with the committee's authorizing statute, 
the committee has designated and authorized two Central Nonprofit 
Agencies (CNAs), the National Industries for the Blind (NIB) and NISH--
Creating Employment Opportunities for People with Severe Disabilities. 
These CNAs provide technical assistance, training and work allocation 
for the qualified nonprofit agencies participating in the JWOD program. 
They also assist the Committee for Purchase staff in monitoring the 
nonprofit agencies' compliance with various statutory and regulatory 
requirements.
    The Strategic Plan of the Committee for Purchase envisions that all 
individuals who are blind or severely disabled will have the 
opportunity to achieve their maximum employment potential. Within the 
JWOD program, the Committee for Purchase requires that JWOD-
participating State and local nonprofit agencies make provisions to 
place individuals with other employers in the community, and its 
Strategic Plan explicitly supports and measures both upward mobility 
and competitive placements. Further, in its administration of the JWOD 
program, the Committee for Purchase is continuously seeking innovative 
ways to increase employment opportunities, maximize personal choice and 
enhance job quality for all persons who are blind or severely disabled.
    As noted in the legislative history, the JWOD Act was enacted by 
Congress to serve individuals with the most significant barriers to 
competitive employment--people who are currently unable to obtain or 
maintain jobs on their own. While some in the rehabilitation community 
may dispute whether any person with a severe disability is unable to 
achieve competitive employment, the fact remains that in 2005, nearly 
70 percent of this population is not employed at all. This shortfall in 
employment is the foundation for the position of the Committee for 
Purchase that more, not fewer, employment choices must be offered to 
people with severe disabilities.
    The rehabilitation community is not in total agreement on the 
status or the value of sheltered--or, what many in the field refer to 
as, extended--employment, and it should be noted that those witnesses 
at the hearing who are not in favor of such employment only represent a 
part of that community. There are people and organizations equally 
committed and involved who believe that extended employment represents 
one of the many solutions that must be utilized in providing jobs for 
people with severe disabilities--the Committee for Purchase endorses 
and supports this approach.
    As stipulated under the JWOD Act of 1971 and its ensuing 
regulations, a severe disability other than blindness is defined as a 
severe physical or mental impairment which so limits the person's 
functional capabilities (mobility, communication, self-care, self-
direction, work tolerance or work skills) that the individual is unable 
to engage in ``normal competitive employment'' over an extended period 
of time. Note that the presence of a severe mental or physical 
impairment by itself does not qualify an individual as eligible for the 
JWOD program, and the coupling of such an impairment with functional 
capability targets only those most in need. The Committee for Purchase 
has always considered ``normal competitive employment'' to mean 
obtaining and maintaining a job in the commercial sector without work-
related supports. Most other disability programs consider those who 
require the provision of work-related support services as being 
competitively employed as long as they work in the community.
    The simplified, segregated sheltered employment model portrayed in 
the October 20 hearing does not accurately reflect the diverse body of 
nonprofit agencies that participate in the JWOD program, nor does it 
accurately reflect the breadth of employment opportunities and choices 
available. The Committee for Purchase encourages Congress not to 
characterize the JWOD program by the ``lowest common denominator'' in 
facility-based employment for people facing the most challenges. JWOD-
participating nonprofit agencies range from modern, high-tech 
production plants to small-scale manufacturing operations. Further, 
some JWOD-participating nonprofit agencies have no facility-based work, 
performing all direct labor in public, community settings such as 
Federal buildings or military installations. In addition, the average 
wage being paid to JWOD employees in fiscal year 2004 was $8.98 (the 
average of wages for people working on products and services, well 
above the $5.15 minimum wage). While this average is positively 
influenced by the Service Contract Act wage provisions, both NISH- and 
NIB-associated nonprofits exceeded the $5.15 rate average even for 
product manufacturing. It is also noteworthy that all JWOD employees on 
Service Contract Act projects receive benefits with a value of $2.87 
per hour on top of their base wage, and without regard to their 
productivity.
    Just over 70 percent of the people employed through the JWOD 
program work on service contracts, and do not actually work at the 
participating nonprofit's facility. To clarify, onsite JWOD service 
employees work together as a team not because they are being subjected 
to segregation, but because a physical or virtual team structure is 
consistent with the way any commercial or other nonprofit entity would 
perform similar work. Further, JWOD-participating nonprofit agencies 
are pioneering new employment models, such as an apprentice program for 
vehicle maintenance that pairs every journeyman position for a person 
with a severe disability to a master repair technician position that is 
nondisabled.
    In the products area, most JWOD items are not the simple 
subcontracting or packaging type projects described by Mr. Robert 
Lawhead, one of the witnesses testifying at the October 20 hearing. 
Products include complex sewn products such as chemical protection 
suits and military uniforms worn and used every day by our Nation's 
warfighters. The norm is that employees with severe disabilities are 
integrated with the nondisabled employees who are also performing 
direct or indirect labor.
    During his testimony at the hearing, Mr. Lawhead stated his belief 
that JWOD-participating nonprofit agencies have strong disincentives to 
pursue competitive placements, because they wish to retain their most 
productive employees to meet product or service contract requirements. 
To clarify, both the JWOD Act and our regulations require participating 
nonprofit agencies to professionally evaluate their employees annually 
for competitive employability, and to provide access to competitive 
placement services. Once a person with a severe disability is evaluated 
as capable of competitive employment, his/her direct labor may not be 
counted toward the JWOD statutory requirement of 75 percent for the 
nonprofit agency, thus encouraging the nonprofit agency to seek 
outplacement for that employee.
    In fact, the number of individuals who move directly from JWOD 
employment to competitive employment, noted in the HELP Committee 
report at 2,370 for fiscal year 2004 or approximately 5 percent, tells 
only part of the story. Nonprofit agencies participating in the JWOD 
program often facilitate the employment of people with disabilities for 
whom JWOD-related direct labor employment is not needed. In the last 2 
years, the nonprofit agencies participating in the JWOD program placed 
more than 53,000 people with severe disabilities into competitive and 
supported jobs. The low rate of placements from JWOD jobs is partly a 
reflection of the program's very stringent definition of severe 
disability (cited above) that focuses on only a small portion of the 
disability population with the highest level of need, and it is not due 
simply to a nonprofit's desire to keep productive workers. Another 
important consideration is the principle of individual choice. Many 
people with severe disabilities who work on JWOD service contracts 
choose to continue making an average of $10.25 an hour (the average 
wage on JWOD services) plus $2.87 an hour in fringe benefits, rather 
than to accept a competitive market job at a lower wage, with no 
benefits.
    With respect to the issue of program governance and stewardship, 
the Committee for Purchase believes that the establishment of board 
governance and executive compensation guidelines for participating 
nonprofit agencies are in the best long-term interest of the JWOD 
program. With this in mind, the Committee for Purchase issued a Notice 
of Proposed Rulemaking in November 2004. While it withdrew the initial 
proposed rule to allow sufficient time to consider and incorporate the 
relevant public comments and recommendations to make the final rules 
more comprehensive and easily understood, the Committee for Purchase 
intends to publish a revised rule on governance and executive 
compensation in the next few months. All JWOD-participating 
organizations were notified of this in a letter from the Committee for 
Purchase dated August 24, 2005 (see attached letter).
    The Committee for Purchase shares the HELP Committee's deep concern 
over excessive compensation and questionable governance practices by 
any nonprofit participating in the JWOD program. However, we would 
caution against assuming that the examples of excessive compensation as 
related in recent reports are representative of the majority of 
nonprofits participating in the program. Quite the contrary, our 
preliminary review suggests that a very small percentage of the 
nonprofit agencies were operating outside of our initial proposed 
regulations. The Committee for Purchase also would caution against the 
conclusion that these nonprofits only perform JWOD-related work and 
thus that the JWOD program is the sole source of their revenue. For 
example, in two cases of participating nonprofits cited at the October 
20 hearing, Social Vocational Services (SVS), Inc. and PRIDE 
Industries, Inc., the SVS revenue from its JWOD contracts in 2003 was 
$60,300, which was a little more than one-tenth of one percent of the 
total revenue of approximately $47,700,000 reported on their IRS 990 
filing. While PRIDE Industries had significant revenues from JWOD-
related work, these still represented about 42 percent of the 
nonprofit's total revenues.
    The Committee for Purchase appreciates the interest of the Congress 
in finding solutions to leverage programs to maximize employment for 
both people who are blind and those with other severe disabilities. We 
share the HELP Committee's interest in considering legislative changes 
that could improve the JWOD program. The Committee for Purchase intends 
to work within the Administration to propose improvements for 
consideration by the Congress. Because the JWOD program operates within 
the Federal acquisition system to create employment, the Committee for 
Purchase believes it prudent that any changes be considered and enacted 
with a thorough understanding of this environment. Further, we have 
been and will continue to work closely with the Departments of 
Education and Defense to productively resolve the current issues 
between the Randolph-Sheppard and JWOD programs regarding their 
applicability to military food service contracts.
    On behalf of the 15 Presidential appointees responsible for 
managing and directing the JWOD program, I thank the HELP Committee for 
the opportunity to submit this statement for the hearing record. My 
colleagues and I are available to answer any questions you or the HELP 
Committee staff may have regarding the program, and we welcome the 
opportunity to improve this unique Federal socioeconomic procurement 
initiative on behalf of Americans who are blind or have other severe 
disabilities.
                                 ______
                                 
                 Committee for Purchase From People
                Who Are Blind or Severely Disabled,
                                  Arlington, VA 22202-3259,
                                                   August 24, 2005.
Chairpersons and Board Members,
Javits-Wagner-O'Day (JWOD) Associated Central Nonprofits,
Other Nonprofit Agencies.

    Dear Chairpersons and Board Members: Over the past 20 months I have 
sent you three letters, in which I outlined the committee's intent and 
plan to implement a number of comprehensive changes to the JWOD 
program's regulatory guidance on Board governance and executive 
compensation for JWOD affiliated nonprofit agencies.
    In my last letter, dated December 8, 2004, I reported that we had 
published in the Federal Register on November 10, 2004 a proposed set 
of standards for Board governance and executive compensation, and that 
the committee would review and analyze all comments received through 
the public comment process.
    The committee has completed our initial review and analysis of the 
comments from 167 sources, and based on this review and analysis, the 
committee has made two determinations. First, we reaffirm that we have 
the statutory authority to establish specific regulatory standards for 
Board governance and executive compensation for JWOD affiliated 
nonprofit agencies, and, second, as announced on July 1, 2005 in the 
Federal Register, we have withdrawn the proposed rules as outlined in 
the Federal Register on November 10, 2004.
    However, the purpose of this withdrawal was not to cancel the 
proposed rules; rather, it was to allow time to better incorporate many 
of the public suggestions, thus making the final proposed rules both 
comprehensive and more easily understood.
    We are mindful that a large number of JWOD affiliated nonprofit 
agencies are either opposed to the establishment of any governance or 
compensation guidelines, or they counsel a ``wait-and-see'' approach. 
But, the committee's Presidential appointees are still committed to 
some reforms and we are unanimous in our belief that the establishment 
and publication of Board governance and executive compensation rules 
are in the best long-term interest of the JWOD program.
    We also see no advantages to waiting for Congressional or other 
Federal agency action. The JWOD program has a unique standing in the 
Federal acquisition environment, and as such, the committee must ensure 
that we are both maintaining and strengthening our accountability and 
transparency to Congress and to the American taxpayers.
    Therefore, I expect that before the end of calendar year 2005, the 
committee will publish in the Federal Register a proposed set of 
standards for Board governance and executive compensation for JWOD 
affiliated nonprofit agencies. We ask that when the latest set of 
proposed rules is published, you sit down with your management team and 
review these proposed rules not from a ``should we be doing this'' 
perspective, but rather from ``how best can we do this, so that we can 
continue to help people who are blind or severely disabled?''
            Sincerely,
                                             Steve Schwalb,
                                                       Chairperson.

    [Whereupon, at 4:18 p.m., the committee was adjourned.]