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HUD
Plans to Contract-Out More Multifamily Work
Overview:
On
March 30, 2004, I attended a meeting with Jim Martin, Deputy
Assistant CFO for Financial Management. He had asked Norman
Mesewicz, Deputy Director of Labor and Employee Relations,
to set up the meeting to discuss Management's intention to
conduct an OMB A-76 study. Agencies conduct OMB A-76 studies
when they are planning to contract out work that could lead
to a Reduction in Force of ten or more employees. Although
HUD contracts out more than $1 billion annually, none has
involved an A-76 study and none has resulted in a RIF.
According
to Management, the A-76 study will involve "Non-Section 8
Contract Administration Activity" in the Office of Multifamily
Housing. This involves approximately 4,000 contracts. After
further inquiry, it is clear that this involves more than
non-Section 8 contract administration, as the work to be considered
for contracting out includes all Section 202, 811, 236, and
rent supp RAP. The older Section 202 and 811 developments
are clearly Section 8 subsidized.
I
reminded them that the Section 8 statute limits who may administer
Section 8 contracts-private corporations and consortia are
not permitted. Nonetheless, Management intends to open competition
to such groups. They agree that if such a group is successful,
HUD will need to secure changes to the Section 8 statute to
permit this contracting out.
Process:
The
new OMB A-76 rules require that the entire process be completed
within 12 months. Since the agency hasn't conducted an A-76
study in more than 15 years, OMB granted HUD a waiver and
HUD will have 18 months.
Management
intended to publish the notice of A-76 competition in the
FedBizOps by April 2, 2004, and provide affected employees
with notice shortly thereafter.
According
to TEAM, approximately 60-80 FTE are used for this work. However,
Management acknowledges that hundreds of Multifamily Asset
Managers are doing this work as part of their portfolio management.
Thus, hundreds of Multifamily Housing staff may be receiving
notices that they are affected by Management's decision to
put their work out for competition.
Management
is now creating a Performance Work Standard Team to develop
the Scope of Work (SOW). The tentative date for completion
of the SOW is September 30, 2004. The SOW will then be published
and contractors will be invited to submit bids for the work.
A
draft SOW will be released to the Union for comment. At that
time, we will need the swift input of our members in Multifamily
Asset Management, as you are the experts in your job. We will
add an icon to the home page of our website (www.afgecouncil222.com)
to take you to the latest information on this A-76 competition.
Although we may not have news for weeks at a time, please
make it part of your routine to check the website.
In
the next couple months, Management is creating a Most Efficient
Organization (MEO) Team to prepare the in-house bid. The bulk
of the MEO Team's work will occur after the issuance of the
SOW.
The
revised A-76 rules provide for no Union involvement in the
MEO team. I advised Management that employees have little
or no faith in Management to develop an accurate in-house
bid. First, Management has demonstrated their bias for contracting-out
in their so-called cost-benefit study of the Section 8 PBCAs.
In that study, Management determined that it would take 1400
staff to manage a portfolio of 16,000 contracts, for a ratio
of 1 Project Manager to less than 12 Section 8 contracts.
The proper ratio under the former Resource Allocations Guidelines
was 1 to 25, and the work included both Section 8 contract
administration and asset management (the latter is work that
hasn't been contracted out--yet). Even the IG found Management's
in-house cost estimate to be inflated. Second, given that
Management is currently responsible for organizing HUD and
its work in the most efficient way possible, an employee only
needs to look around to realize that we're in trouble when
they don't include input from the people who actually do the
work.
And
who will be responsible for determining the cost of contractor
oversight in the event this work is contracted out? In a fair
competition, the in-house bid is compared to the cost of the
outside bid plus the cost of in-house contractor oversight.
Management
admits that they do not have experience in either creation
of the SOW or the MEO. Therefore, they are hiring contractors
to assist each team. They have selected five small business
contractors from a list provided by GSA. With assistance from
GSA, they are asking these five contractors to compete for
the SOW and MEO assistance contracts. Management has agreed
to provide the Union with the list of five, and we will confer
with AFGE National in an effort to ensure that the contractor
for the MEO team is more than competent.
Why A-76? Why the Rental
Assistance Program? And what happened to the promised contracting-in
studies?
Perhaps
to make us feel less hostile towards this announcement, Management
advised that they believe the work takes more staff that the
current 60-80 FTE. They hope the in-house bid wins, so they
can go to Congress and seek authorization to hire the necessary
staff.
If
that's so, then why not use the much touted REAP studies to
support the need for more staff? Why do we cooperate with
REAP if it isn't to be used to support more staff? Management
advised that using A-76 will result in the use of competition
with the private sector to create a "Most Efficient Organization."
Of
course, an A-76 study could also result in the contracting-out
of more work and the RIFing of current staff, despite declarations
by Secretary Jackson and former Administrator of the Office
of Federal Procurement Policy Angela Styles that HUD probably
already contracted out too much. So, what happened to the
promised contracting-in studies? Perhaps not realizing the
incongruity of their answer, Management advised that they
had insufficient staff to conduct a contracting-in study (so
they're using staff to conduct a contracting-out study).
The
remaining rental subsidy contracts are being targeted because
GAO continues to list their administration as "high risk"
and the IG Annual Financial Audit continues to include this
as a weak area. Of course, Management admits that HUD employees
are being compared to PBCAs, and that HUD provides PBCAs with
resources far greater than HUD provides for its own work.
What's the Union doing
now, and what can I do?
We
have several irons in the fire. First, we've contacted AFGE
National for assistance. We're reviewing the five small business
contractors to ensure that our MEO team isn't saddled with
a dog for a contractor. We're also pressuring Management to
ensure that the right people are on the MEO team.
Second,
we've contacted reporters with Government Executive about
this. They did an excellent article on the PBCA debacle last
summer, and have been closely following contracting out in
general.
Third,
we're working with AFGE National to secure legislation requiring
HUD to conduct two small-scale contracting in pilot programs-one
involving the PBCAs and the other Single Family Property Disposition.
We've gotten good responses on Capitol Hill, but now we need
to secure appointments with key Senators and Representatives
while they are home on Easter recess. Talk with your Local
Presidents for more information.
Fourth,
if a non-PHA is the successful bidder, Management will need
to secure congressional authority to contract out this work.
We'll be contacting the National Alliance of HUD Tenants and
other advocacy groups about this. NAHT has consistently opposed
the PBCA contracts, and we believe they will help us oppose
these contracts as well.
Fifth,
we'll be updating our website with all news as soon as we
receive it. Look for the icon to be placed on the home page
soon. We can't use government equipment to tell you to lobby
your Congressperson. But your Local President is able to talk
about it with you directly. So keep yourself in the loop.
We'll post sample letters on the website and report on what's
happening.
The
game is on!
Carolyn Federoff, President
AFGE Council 222
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