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NATCA Relays Concerns About Contracting Process to Commercial Activities Panel - (6/11/2001)

CONTACT:  Courtney Portner, 202.220.9813, cportner@natcadc.org  

WASHINGTON – National Air Traffic Controllers Association President John Carr expressed to the Commercial Activities Panel today the union’s opposition to the contracting of air traffic control operations. He relayed NATCA’s first hand experience to illustrate how agencies can easily skirt the Office of Management and Budget Circular A-76.

OMB Circular A-76 establishes a set of mandatory procedures and standards that must be met to justify contracting by the federal government to a private commercial enterprise. Between 1994 and 1999, the Federal Aviation Administration contracted 131 air traffic control towers, but has failed to satisfy OMB requirements with respect to the A-76 analysis that government agencies are supposed to do before contracting out.

“In 1994, the FAA circumvented the law. At no time prior to the privatization of FAA Level I air traffic control towers did the agency determine whether or not air traffic control service provided constitutes a governmental function,” elaborated Carr. “In fact, the U.S. District Court has held twice that the FAA has failed to make a valid or even rational argument that its privatization program does not involve inherently governmental operations.”

OMB Circular A-76 also mandates that government retention of commercial activities must be justified on a cost basis. But again, the FAA has never undertaken the cost comparison procedures with respect to contracting out Level I facilities. Rather on two occasions, the FAA issued itself a “waiver” from the cost comparison.

“The agency is unable to quantify actual cost savings because it does not have a cost accounting system. All estimated gains are based on the difference between the FAA’s operational costs to run a tower and the contractor’s bid,” commented Carr. “There are a number of direct and indirect costs associated with contracting that are not taken into account.”

“While NATCA has been tied up in litigation since 1994, the simple fact is the towers in question have already been contracted. If the court rules in favor of NATCA, it will be difficult and costly to reconvert the 131 towers in question back to the FAA. However, the costs are attributable to an agency that undertook to privatize services in plain violation of law, and then engaged in protracted and time consuming litigation instead of accepting the district court’s determinations regarding the unlawful nature of the privatization of air traffic control,” concluded Carr.

The General Accounting Office established the Commercial Activities Panel to study the federal outsourcing policy. Congress directed the panel to turn in its report by May 2002.


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