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Public Statements

National Defense Authorization Act for Fiscal Year 2008

Floor Speech

Location: Washington, DC

National Defense Authorization Act for Fiscal Year 2008


Mr. KENNEDY. Mr. President, I desire to talk on the amendment that is sponsored by Senator Mikulski, myself, and a number of others, which is an amendment to the Defense authorization bill. I see the ranking member of the committee. If he had other business he wanted to deal with, obviously, I would withhold.

Mr. President, at the end of last week, on Thursday evening, there was an excellent presentation on this issue before the Senate by Senator Mikulski. I addressed the Senate on Friday on this issue, and I am going to take a few minutes this afternoon.

This is an exceedingly important issue. It relates to the underlying concept of our national security and our national defense. In this legislation, we are authorizing some $675 billion, which is essentially the backbone of our defense. What this amendment deals with is the personnel who will be working on the tanks, the planes, and the military hardware which needs to be conditioned and updated and improved so it is available and accessible to those men and women who are involved in defending this country. These are the employees who work primarily in the Defense Department.

There is a phenomenon that has arisen that works to discriminate against these excellent workers. They are not only excellent workers but a third of them are veterans. A third of them are veterans. These are men and women who have worn the uniform of our country and have decided that they want to continue in public service and so, therefore, have brought their skills and their training they have achieved in the military to give attention to the Defense Department. This is probably the highest percentage of veterans in any undertaking or employment base we have in this country, because these individuals, highly patriotic, highly motivated, highly skilled, want to continue their service to the country.

Basically, what they are asking is for an opportunity to continue service within the Defense Department, working on the various challenges and contracts which come before the Defense Department. This chart shows that thousands of veterans could lose their jobs under the outsourcing rules. That is what this amendment is about. We are going to get fairness in competition so these workers are treated fairly and the taxpayer is treated fairly, and we get the dollar value for the taxes paid, and the workers will be treated fairly.

Under the current system, the rules that have been developed by the administration undermine that sense of fairness for these workers--a third of whom, as I said, are veterans. That is the issue. Thirty-four percent of the civilian defense employees are veterans. This amendment ensures that these 226,620 dedicated Americans who have served our country will not lose their jobs because of unfair outsourcing. That is what we are talking about--unfair outsourcing.

Let me explain how this works. The chart probably demonstrates it as well as it can be demonstrated. This is the Government here for some particular Defense Department work. You can see from the green box that the Government can provide a lower rate for the cost of providing the service, and can also do it with higher skills than on the private bid. But the fact that the Government employees have health insurance or retirement benefits adds an additional cost to their proposal, which puts them out of competition. So what we are finding now with these new rules and regulations is the bids and contracts are going to companies that are dropping their health care and dropping their pension programs and dropping other security benefits so they can come up underneath the Government contract. Essentially, this is a race to the bottom.

In a country where we have 47 million Americans who are uninsured, and we are having a major national debate about covering children, why are we providing more financial incentives to companies to drop their health insurance? That is what we are doing. The ones who are losing out are, by and large, the ones who have served in the Armed Forces of our country.

This isn't only on Government bids; this could be a responsible contractor and an irresponsible contractor. Maybe a responsible contractor can do it more efficiently even than the Federal Government, but look how it works. If you have a responsible contractor who is trying to provide some benefits, limited benefits, or good benefits for their employees--and that is the combination we are talking about, health and retirement; those are the two, retirement and health--we are seeing those contractors who can provide the services more efficiently and better. Nonetheless, the bid will go to the irresponsible contractor. So this works against responsible contractors and it works against veterans working in the Defense Department.

What we are saying with this amendment--and there are other provisions in the amendment--but what we are saying is let the competition take place. Let the competition take place between the workers in the Defense Department and the private sector, but let them have an even playing ground. Let us exclude the health insurance and retirement benefits. Let us have the competition out there and the best person win. The best bid wins the contracts.

Why would we want to continue to drive out these contracts? We can show what has been happening over time to these workers. We saw in 2004, because of these new regulations, where Federal employees lost on 10 percent of these bids; in 2005, it went to 30 percent; and the best estimate now is it is going all the way up to 78 percent, and basically it is about this issue--not completely, but it is fundamentally about this issue.

Now, in the amendment there are other provisions which I will mention very briefly. Provisions of this amendment, which have been debated on the floor and acted on in the Senate at other times, have also had strong bipartisan support, and I will mention those very briefly.

At the present time, a private contractor can appeal an unfair decision if there is a belief by the private contractor that there is unfairness in terms of the decision in the competition with the Federal workers. They are entitled to get an appeal. On the other hand, if the Federal workers believe it is an unfair competition, they have no right to do so. They have no right to do so. This restores that right. This represents a very similar provision that was sponsored by Senator Collins in 2004, and Senators Chambliss, Warner, Thomas, and Voinovich have also supported appeal rights in the past for Federal employees in previous appropriations legislation. I am not speaking for them, but it is an indication that this is an issue that has been before the Senate at other times and there has been bipartisan support for it.

On this point here--can renew a contract without recompetition--if they have a follow-on contract, they can renew that, if it is a private contract. With the Federal workers, they do not have that right to do that at the present time. So under the outsourcing provisions, these Federal workers are shortchanged.

The provision regarding the submission of the competitive bid that requires the Federal workers to follow procedural and administrative provisions actually increases the cost of their bids. Again, at the request of the employees, all they wish to do is have the same kind of ``most competitive bid'' they can offer. They would like that one to be on the table so we will get the best in terms of productivity and skill and also get the best in terms of savings for the taxpayers. But they are denied that right.

We provided, through the Appropriations Committee, those protections. Those provisions had been added through the Appropriations Committee. But what has happened is, as the Appropriations Committee process goes along, these provisions expire, and so we have to come back to them. We have to win them again every time. Because if they are added on the appropriations, they do not continue to last and we have to refight those issues.

Finally, there are what they call ``quota provisions,'' which have been put on by OMB and require a certain amount of quotas in terms of the private contracting, which obviously provides some unfairness to the workers and, secondly, to the public and the taxpayers.

These are basically the provisions we have in the legislation. The primary one we have talked about today has been on this competition we have had for the benefit cost. This is the overarching issue and question.

We are going to have a good national debate during the Presidential elections of 2008 about how we are going to address the problems of cost in this country on health care. We have gone from $1.3 trillion to $2.3 trillion in the last 5 years.

We have added $1 trillion worth of spending in health care and have added 7 million more people who are uninsured and there would have been a great deal more if we didn't have the CHIP program.

We cannot continue that as a nation. We are not going to be able to continue that. Our companies are not going to be able to; the costs in terms of local communities have gotten prohibitive. These involve real people and real sacrifices--real important considerations. We are talking about families. We are talking about, by and large, fairly treating people who served in the military. They had health care when they were serving in the military. They could have the health care when they retired. But the real question is going to be, now, when they are continuing to be a part of the whole defense and security of this country, whether we are going to treat them with the kind of respect they need, understanding they have families and they need this health care coverage. They are glad to pay for it and bargain for it. They have to look down the road in terms of their security and the security of their families, in terms of pensions in the future. They are glad to pay for that. But why we should be able to effectively cut them loose at a time of intense competition, I don't know.

I thank the Senator from Connecticut, Mr. Lieberman, who has been involved in the different phases. I mentioned half a dozen different phases on this issue. He has been involved and engaged in these different aspects since he has been on that committee. I enjoy serving with him on the Armed Services Committee. He has been an eloquent and effective voice and has given enormous support to this effort. I see him on the floor and thank him for all of his help and assistance on this issue.


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