[Congressional Record Volume 146, Number 39 (Monday, April 3, 2000)]
[House]
[Pages H1669-H1671]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ALL COLORADANS SHOULD FILL OUT THEIR CENSUS FORM
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 1999, the gentleman from Guam (Mr. Underwood) is recognized
for 60 minutes as the designee of the minority leader.
Mr. UDALL of Colorado. Mr. Speaker, will the gentleman yield?
Mr. UNDERWOOD. I yield to the gentleman from Colorado.
Mr. UDALL of Colorado. Mr. Speaker, I thank my colleague, the
gentleman from Guam (Mr. Underwood), for yielding me this time, and I
also want to thank my tireless colleague, the gentlewoman from the
great State of New York (Mrs. Maloney), for her work on the census.
Mr. Speaker, I have a short statement that I would like to share with
my fellow Coloradans. I want to urge Coloradans to return their census
forms. It is very important for our State and for the country.
Just last week, our State demographer, Jim Westkott, was saying
Colorado may have as many as 330,000 residents than the latest estimate
by the Census Bureau, an 8 percent difference between the State's
estimate and the Census Bureau's latest extrapolation from the 1990
census returns.
Of course, it is the Census Bureau's numbers that are used for
Federal purposes, for apportioning House seats amongst the States to
allocating Federal funds for schools, transportation and other
purposes. That is why it should concern everyone in our State, our
State of Colorado, that the Census Bureau itself says its 1999 count of
Coloradans missed some 66,000 people. That is why it is so important
that this year's count be as accurate as possible, and that is why it
is unfortunate that some members of the other body and other political
figures have been making statements that could discourage people from
being counted.
So, Mr. Speaker, I hope everyone in Colorado, from Arboles and
Antonito in the south to Virginia Dale and Peetz in the north and from
Dinosaur and Dove Creek in the west to Wray and Holly in the east, plus
everybody in between, will send back the census form and help make this
the most complete and most accurate census in the history of our State
and our country.
Mr. Speaker, as I conclude, on my plane ride today, I got out my
census form and I know it was supposed to be in a few days ago but
there is still time. Please, if you have the form, long or short, pull
it out, take the short period of time it takes to fill it out. It is
simple. It is well structured. Fill it out. Send it in so we can count
every American so that we can proceed in the ways that we want to
proceed in this next 10 years and continue to build on the great work
that we are doing in this country.
Mr. Speaker, I again thank my colleague, the gentleman from Guam (Mr.
Underwood), for this time.
Navy's Privatization Practice in Guam
Mr. UNDERWOOD. Mr. Speaker, this evening I want to take the time to
discuss an item of military policy which has directly and negatively
affected my home community of Guam, but which will inevitably find its
way into other communities. That is the process of privatization,
outsourcing, contracting out what are currently civil service jobs,
particularly on Department of Defense installations.
Many Members of this body every year argue for an increase in the
amount of money that this country spends on defense. They cite
shortfalls in procurement and spare parts, declining recruitment
numbers, crumbling infrastructure and aging equipment. There are also
those Members who chastise these efforts and demand that the Pentagon
do more with less and find a better way to conduct business in order to
save money and meet these shortfalls. In a way, they are both right and
both wrong. Congress does need to do more for the troops in terms of
housing and salaries; time on deployment or in training; education
benefits and health care. In most cases, this will require an increased
level of funding from this body.
Congress also needs to ensure that officials in the Pentagon are
spending these funds in the most prudent and efficient manner possible.
This responsibility requires that Congress certify the Pentagon's
fiscal decisions with the utmost consideration to the Nation's long-
term strategic goals.
Unfortunately, this has not always been the case. Today I am going to
focus on the conduct of the Navy's outsourcing study on Guam.
Mr. Speaker, this is one case of outsourcing that every military
community around the country should pay attention to, because it serves
as an example of poor, long-term planning by the Pentagon that will
have grave security implications for our presence in the western
Pacific.
The Department of Defense and each of the military services, since
the early 1990s, have been aggressively implementing their version of,
quote, a better way to do business. Their solution
[[Page H1670]]
is to outsource, to downsize and to privatize. The Navy announced in
the fall of 1999 that Raytheon Technical Services was the winner
amongst the private contractors that would be pitted to compete against
the in-house civil service workers, the so-called most efficient
organization. Under the A-76, or commercial study rules which are set
up for this purpose, the victor in this winner-take-all competition
would have the right to perform the Navy's base operating systems
contract, or more commonly known as the BOS contract. This past
January, the Navy announced that the BOS contract, the BOS support
functions, were to be sent out to the private sector for performance.
The in-house civil servants bid some $607 million against Raytheon,
which won the competition at $321 million. The huge disparity in these
bids is testament to the Navy's disenchanted efforts in assisting the
local workforce and the inherent weakness in the A-76 process in
situations where there is little or inadequate union input.
The study on Guam analyzed some 1,200 positions, 950 alone at the
Works Public Center. Many of these workers eventually pursued the
Navy's priority placement program which enables alternative Federal
employment worldwide. Others chose early retirement. Those who were
left, who face involuntary separation, earned the right of first
refusal, the so-called right of first refusal, the jobs that the
contractor provides they have the right to refuse the job first. Any
way you look at it, it is an inglorious way to end one's civil service
career.
Now, let us take a look at the broader look at the A76 process. To be
sure, A-76 is not the best of methods to mete out savings. However, in
some respects it affords the civil service an opportunity to fight it
out and sometimes even beat the private sector through this
competition. Appreciating its procedural imperfections, A-76 is
criticized by the public workforce, the unions and the private sector
contractors. Each player views the rules of the process with some
degree of accuracy as favoring their opponents throughout the
competition. The Department of Defense has placed a very high stake in
the process of outsourcing and privatization. In 1999, the Department
of Defense announced that by the year 2005 over 230,000 current civil
service positions will have been studied for possible outsourcing. The
department estimates that they will have saved some $11.2 billion and
achieved a steady savings rate beginning in fiscal year 2005 of
approximately $3.4 billion annually. These estimates are sheer
mathematical conjuring. The Pentagon is assuming these savings. Indeed,
the individual services often do not even account for the cost of
performing this study, which in most cases comes from operation and
maintenance accounts. These costs can include the paying of the cost
comparison study itself as well as associated costs for voluntary
separation, incentive pay, early retirement benefits and general
reductions in force or RIFs. The military often risks savings at the
expense of long-term readiness and I make this statement based on
several notions. In the world of the Pentagon, those of us who are on
the House Committee on Armed Services and who have the responsibility
of overseeing the activities of the Department of Defense, there is on
one side the warfighters and there is on the other side the force
builders. The warfighters are the folks that will have to put their
neck on the line and fight our Nation's battles and win. The force
builders are the folks that provide the tools to the warfighters.
Congress has oversight over both.
The problems that we have generally lie with the force builders.
These people are the facilities and infrastructure specialists. More
and more of these cadre have MBAs or are CPAs. They get promoted based
on how much money they can save in a given cycle. In some instances,
military officers are rated for promotion based on achieving certain
fiscal goals or in exceeding outsourcing benchmarks. Let me be clear, I
am not opposed to savings or more efficiency. I recognize that there
are times there is colossal waste in the Pentagon and opportunities to
improve the methods of operating and maintaining our infrastructure
need improvement. What I am opposed to is when readiness and strategic
forethought takes a back seat to fiscal aggressiveness. We need to
think hard when many of our people in uniform, the military's rising
stars, earn meritorious service medals or legions of merits because
they were able to save $300 million by laying off a thousand employees.
And that is the state to which much of the activity inside the
Department of Defense is now occurring. They are so focused on this
strategy to save money and to conduct their business in what they call
a more businesslike way, that they are actually getting rewarded, not
because they are a more effective fighting force or not because they
have done something in the warfighting, they have not improved methods,
but they are getting awarded because they are able to save money by
laying off people.
I will remind my colleagues over in the Pentagon that their first
duty is to plan and to prepare and to fight and to win our Nation's
wars. The military is not a business, and thus you will not always have
a balanced spread sheet. The department's accountants cannot place a
dollar figure on readiness. That is a political and strategic decision
which I know every Member of Congress is willing to pay for.
Congress recognized that outsourcing may have a dramatic impact on
our communities. This is why they require the Pentagon, in law, to
report to Congress on the potential impact that an outsourcing process
will have on the community's economy. Sadly for my home island of Guam,
this requirement was introduced after the Navy commenced its study. If
the Department of Defense was required to submit an economic impact
study for Guam, it would show that Guam was really a poor model for the
DOD to conduct the study on a big base/small base comparison, which was
their original rationale.
Indeed, even the Navy abandoned this so-called comparison study model
in favor of just continuing forward with Guam's solitary A-76
commercial study. Guam will face job losses of a unique proportion.
Essentially, it is an erosion of its middle class. It is important to
understand that Guam is a small place, 150,000 people with a workforce
of about 60,000. Any kind of movement in one sector of the economy has
enormous ramifications in the other sectors.
For those workers, civil service workers, who will choose the
priority placement program, they will have to leave the island. Unlike
other jurisdictions, there are not Federal jobs over in the next
county. The next county is 3,500 miles away. In fact, in this whole
process already almost 60 people have been placed in Utah, and some of
the most tragic circumstances I have had to deal with in terms of my
constituents is to deal with young men who looked forward to having a
successful career in the civil service doing important work for the
defense of the nation and its forward presence in Guam now having to
face the possibility of working here in Virginia or in the State of
Washington or some other community where they are now divorced from
their family network, where their kids are now not going to see their
grandparents, where they are not going to be able to attend the family
functions which are such a critical and sensitive part of our island
way of life.
An island has a unique economy in that it is very sensitive to slight
movements in the labor market. The Navy completely disregarded this
consideration because there is no legal mandate for them to do so. The
exodus of these skilled workers from Guam represents a serious brain
drain. It can also depress real estate markets as hundreds of homes are
sold off.
{time} 2015
Finally, the local tax base suffers as there is a decline in the
local working population.
For those workers who choose to stay on island and leave the Federal
service for a contractor job, they are offered meager salaries. This is
the right of first refusal. These wages are calculated by a so-called
prevailing wage calculator. This measures a wage rate for a particular
job common in the community, but does not account for the price of
consumer goods that are available on island.
When one works for the Federal Government, one has a tension on the
local economy, but one also has what is
[[Page H1671]]
called a COLA, cost of living allowance. Usually that makes up the
difference. The private contractor is not required to pay this.
So as a consequence, the contract on Guam, which is scheduled to
commence next Monday morning, has a number of serious differences in
the wages that the people used to make and the wages that they are now
being offered in terms of the right of first refusal.
In most cases, a Federal worker of the Public Work Center Guam will
be paid a decent wage this Friday. But on Monday, he will be paid a
dismal wage to do the same work. For example, an air conditioning
mechanic making $18.37 an hour this week will be offered $8.05 next
week. An industrial equipment mechanic making $18.37 this week will be
offered $12.13 next week. An electrician making $18.37 an hour this
week will be offered $10.78 next week. An office clerk who is making
$12 an hour this week will be offered $8.36 next week. A general clerk
who is making $11.60 an hour this week will be offered $5.87 an hour
next week, no matter how many years of service you have.
Furthermore, to add insult to injury to this offer, these salaries
are being offered, not on a 40-hour workweek, but Raytheon is offering
the workers a 32-hour workweek. They are considering that full time. So
on top of these salary cuts, there is an additional cut of 20 percent
by offering a 32-hour workweek. This rubric will be devastating for
these wage earners. Even at the previous base salary, the cola was
everything.
As a small isolated community, the prices on Guam for food stuffs and
dry goods and clothing and mortgages and utilities and loans are
usually very high. We all know how important health care is to
America's families these days, and we equally recognize all the quality
of Federal health insurance programs. The civil service employees were
part of this system and were able to support their families with it.
The health benefits rate that is going to be paid under this
contract, under the RFP issued by the Navy, is $1.63 an hour. This is
going to be too little to support even the wage earner. How is the
worker going to take care of his or her family?
As a result of these dismal salaries and the 32-hour workweek, many
of Guam's workers are simply not taking the jobs, preferring
unemployment insurance, which will pay higher benefit, or simply will
choose to leave the island.
The island has a limited population that cannot accommodate a war
time surge in work if most of its skilled labor force leaves. This has
grave implications for readiness, because in the case of a national
emergency or something happening in Korea or Taiwan or some part of
Asia, Guam is the major logistical node. Where are they going to find
the workers then? Well, they are going to have to bring them in from
off island at great cost.
An adequate economic study would have flushed out this. A realistic
look at the readiness requirements and the war time requirements of our
defense forces, and an objective look at the world situation in East
Asia would have flushed all of this out.
The employees who choose to stay on island and leave the civil
service are permitted a right of first refusal for the private sector
jobs. But how meaningful can this right be when the positions being
offered are far below what they were previously earning.
The A-76 rules and procedures were applied haphazardly by Navy's
PACDIV in Hawaii with little regard to the human toll or the impact on
Guam's economy. PACDIV's desire to save money was so egregious that
they misinterpreted what should be the trade-off between military
security, forward presence, strength in Asia, and bottom line savings.
I believe we could have had both, but it would have taken a great deal
more planning and thought than PACDIV apparently gave to this project.
Mr. Speaker, in light of these fallacies and problems that have
occurred on Guam in the Navy's A-76 study, I am calling for several
things. First of all, I am calling for the Navy to explore halting the
implementation of this contract until many of these grievances and
miscalculations can be redressed.
Last Friday, I sent a letter to Secretary De Leon, a joint letter
from 28 Members of Congress, calling for a halt to the implementation
of this contract until the Congress and the Inspector General of the
Department of Defense can audit the way the outsourcing study was dealt
with on Guam balanced against strategic circumstances.
Secondly, I am calling for the U.S. General Accounting Office to
conduct an audit into the way the Navy organized, planned, and
conducted this outsourcing study on Guam with seeming little regard to
the impact on the small isolated community that, relative to its
population, has a significant role had the readiness and the strength
of the U.S. military in the Western Pacific.
Third, I am calling on the House Subcommittee on Military Readiness
to conduct a hearing on the methods of the Department of Defense
privatization efforts on Guam as well as the Pentagon's aggressive
plans towards outright privatization without using the A-76 rules.
Finally, I am going to introduce into the defense authorization bill
for fiscal year 2001 an amendment to extend COLA benefits for those
civil service employees who exercised the right of first refusal on
Guam. This will, I believe, assist these families financially and
perhaps stem the flight of skilled workers from Guam.
Another aspect of this amendment is to provide a mortgage assistance
program for all affected civil service workers. For all their years of
dedicated Federal civil service, this is the least that the government
can do.
Mr. Speaker, I have said it before and I will say it again,
outsourcing from a small island economy does not make any sense. There
is no readiness benefit to do it. In fact, there is more likely the
case that this privatization endeavor will jeopardize both long-term
and short-term readiness.
Of course there is no benefit to the local economy. Since Guam's
firms are not large enough to be the prime contractor, most of the
contract's profits will be sent off island or remain in the hands of
big corporations.
There is no benefit to the laborer. Their salaries have been sliced
and diced, so they will not even be able to able to afford the costly
consumables that are sold locally. Whatever happened to an honest day's
wage for honest skilled labor.
All in all, the Navy's conduct in this commercial study appears to
have been a rather shallow display of gratitude and neighborliness for
all of Guam's years of service as the Nation's most strategic forward
located area. Furthermore, their decisions represent an utter lack of
forethought with regard to the future defense needs in the region.
It is my hope to bring some relief to these dedicated civil service
employees and alert other communities to the pitfalls that were
encountered by my island community of Guam during the Navy's
outsourcing.
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