“Assessing the Impacts of AbilityOne Program at Melwood” Study Released by Virginia Tech and Melwood, Analyzing Economic Benefits of Federal Procurement Program at Melwood

October 31, 2022

Research reveals the AbilityOne Program at Melwood creates better outcomes in disability employment space while reducing government spending, creating additional revenue, and adding to the Gross Regional Product

Upper Marlboro, Md. – Melwood, a leading employer, advocate, and preferred provider for people with disabilities, today announced the results of its cost-benefit analysis study in partnership with the Virginia Tech Center for Economic and Community Engagement (CECE) and the Virginia Tech Institute for Policy and Governance (VTIPG), “Assessing the Impacts of AbilityOne Program at Melwood.”

The U.S. AbilityOne Program is a federal procurement program, established in the 1930s, to advance employment of people with disabilities by leveraging the government’s purchasing power and contracting authority. Through the program, the federal government awards select contracts to non-profit organizations, who in turn dedicate 75% of the direct labor as an opportunity to create competitive, supportive, inclusive jobs for people with disabilities. The government gets an essential service, while people with disabilities can participate in employment opportunities that include strong wages, benefits, access to coaching and support services, and access to outplacement services if they wish to leverage their AbilityOne Program experience to apply for work elsewhere

Today, the AbilityOne Program is the largest collective source of employment for people with disabilities in the United States, currently employing nearly 40,000 people with disabilities at a time when unemployment for people with disabilities is nearly double the rate for the general population.

KEY FINDINGS

This study analyzes the federal investment in the AbilityOne Program at Melwood and its broader economic impact on Melwood’s employees with disabilities and on government spending. The study’s results reveal that the fiscal benefits of the program at Melwood surpass any alternative and produce significant positive impact, not only for the individuals employed, but for the government and economy at large. It also shows that the AbilityOne Program at Melwood outperforms other employment mechanisms – such as vocational rehabilitation programs – in both quality of workplace and compensation.

Through interviews with Melwood staff, peer Non-Profit Agencies, critics and advocates within the larger AbilityOne ecosystem, and a random selection of Melwood’s government customers, and an analysis of key fiscal indicators, the Virginia Tech CECE and the VTIPG found that:

By producing full-time employment opportunities and livable wages and through its lower turnover rate, employment at Melwood through the AbilityOne Program reduces government spending by $38,354 per person served per year. This return on value through Melwood’s program management is in addition to the contractual service the government is receiving from the AbilityOne contracts.

Melwood employees on AbilityOne contracts are on fewer government benefits than they would be otherwise. Key examples of this include Supplemental Security Income (SSI) saved due to less need by employees; Medicaid dollars saved because employees can participate in Melwood’s insurance; and SNAP benefits saved due to greater financial security.

Melwood’s AbilityOne contract employees with disabilities are also paid at a much more competitive rate than individuals employed through traditional vocational rehabilitation programs.

Employment through the AbilityOne Program at Melwood transitions people from receiving government paid benefits into taxpayers. Annual taxes collected by state and federal government agencies from employee income and regional spending equals $9,655 per person served by Melwood’s operation of the program.

Due to fair, competitive wages through the federal government, Melwood’s employees on AbilityOne contracts have greater fiscal and economic impact. Because they earn more than they would in a private sector job, they have greater opportunity to participate in and contribute to the economy through income taxes and purchasing power. The increased labor income and regional spending from Melwood’s employees on AbilityOne contracts contribute $12,073 per person to gross regional product.

Melwood’s employees with disabilities on AbilityOne contracts are mentally and physically healthier in the long-term because they are more self-sufficient financially and physically than they would be without employment or in a less supportive, inclusive environment. This results in decreased burden on the public healthcare system and is evidenced in public healthcare savings.

Government customers receive equal or more reliable and consistent work with Melwood’s employees, resulting in lower turnover rates and a reduction in the volume of federal security check payouts.

The AbilityOne Program at Melwood alleviates mental and financial caregiving burdens, allowing family members and others in a caregiving position to more fully participate and contribute to the economy.

Melwood’s employees with disabilities on AbilityOne contracts experience greater integration into society, leading to decreased stigmatization of people with intellectual and developmental disabilities.

The study also explores the economic cost of significantly higher unemployment for people with disabilities without the opportunities provided through the AbilityOne Program at Melwood.

“The AbilityOne Program is not just leading the charge in disability employment, but it does so at a significant cost savings to the federal government and taxpayers,” says Larysa Kautz, president & CEO of Melwood. “At Melwood, our vision is a world where people with disabilities are fully included, and we believe that starts with economic empowerment through employment. We’re proud to be a part of this program and continue conversations around how we can modernize and expand this critical workforce solution.”

The Virginia Tech CECE and the VTIPG also provide strategic recommendations for preservation and modernization of the program to maximize impact, including increasing benefits counseling, expanding advocacy and support services, providing more incentives to government agencies to expand the types of products and services on the federal procurement list, and establishing success metrics and evaluation protocols.

METHODOLOGY

Melwood commissioned the Virginia Tech CECE and the VTIPG to conduct an impact study of the AbilityOne Program at Melwood. Based on Melwood’s described needs, the research team designed a cost-benefit analysis to assess the return on investment (ROI) of the program at Melwood and conducted a programmatic assessment that would inform how key components of the AbilityOne Program at Melwood contribute to public impact. The Virginia Tech research team drew from existing industry and academic literature, interviews with AbilityOne stakeholders, and Melwood operational data to identify and estimate the outcomes and impacts of the AbilityOne Program at Melwood. ROI findings represent a conservative estimate of programmatic impact, as many benefits of the AbilityOne Program could not be quantified or included in the model.

This study has not been endorsed by the U.S. AbilityOne Commission.

Click here to download the full report.