Melwood Issues Statement Condemning Proposed Rule by U.S. AbilityOne Commission on Competition in the AbilityOne Program

March 20, 2023

Proposed rule represents an existential threat to the U.S. AbilityOne program, the largest collective source of employment for people with disabilities.

Upper Marlboro, Md. – March 20, 2023

Melwood’s Statement on March 10, 2023, Notice of Proposed Rulemaking by the U.S. AbilityOne Commission:

The U.S AbilityOne Commission’s Notice of Proposed Rulemaking (NPRM), issued on Friday, March 10, 2023, fails to prioritize the true mission of the U.S AbilityOne program – the employment of people with significant disabilities – and undermines Congress by fundamentally changing the statutorily mandated way AbilityOne contracts are allocated.

With the initial passage of the Wagner-O’Day Act and the expanded Javits-Wagner-O’Day Act, Congress created a mandatory source federal procurement program, with a clear conviction and vision to expand job opportunities for individuals who are blind or have significant disabilities. In designing the program, Congress took great care to eschew the norm of selecting the ‘lowest price technically acceptable’ solution, or what it called “cutthroat competition,” because our lawmakers desired a program that employs those who face the most significant barriers to employment, who require significant accommodations and supports, or who require additional training and coaching to achieve career success. Today, the program employs nearly 40,000 people with significant disabilities across the country through a network of 400+ non-profit organizations with great success, in meaningful, good-paying jobs.

With this proposed rule and its emphasis on price competition, the Commission undermines the careful design of Congress and undercuts the non-profits who work hard to balance offering services to the government at a fair and reasonable price with their mission to address the unemployment and underemployment of people with significant disabilities. Introducing wide-scale price competition will reallocate charitable dollars that now go toward advancing our mission, supporting our employees, and expanding opportunities for people with disabilities.

What the Commission proposes is a race-to-the-bottom, creating a system of incentives that perversely force non-profits to reevaluate who they can support and where the only people who lose are those whose disabilities require the most accommodations. This is a striking shift for a Commission that in recent years has finally begun to address the need to modernize the program’s statutory and regulatory framework to catch up to the non-profits who have led the way in supporting those with the most significant disabilities by offering competitive integrated employment.

Of particular concern, the Commission ignores the recommendations made by the “Panel on Department of Defense and AbilityOne Contracting Oversight, Accountability, and Integrity,” established by section 898 of the FY17 National Defense Authorization Act. After four years of analysis of the Program, the 898 panel narrowly focused its recommendations on program contracts valued at more than $10 million annually and limited its proposal to re-competition. Instead, the Commission’s proposed rule covers new and existing contracts with $2 million annual values (i.e., more than 75% of the contract value within the program), while simultaneously admitting that neither the AbilityOne Commission nor the central non-profit agencies have the resources to conduct this volume of competition and without acknowledging the disastrous effect this rule would have on the workforce or the squandering of charitable assets that will ensue.

The proposed rule also mischaracterizes the outcomes of the two pilot tests – both of which were found by federal courts to be improper, arbitrary, and capricious and contrary to Congressional intent – by suggesting they provide proof that competition is an “appropriate motivator” to achieve a lower price. This characterization fails to acknowledge that, in one pilot, there were significant job losses. In the other pilot, it was not competition but collaborative bilateral negotiation between the government contracting activity and the incumbent non-profit, as contemplated under current law, that resulted in achieving cost-savings while preserving the full employment of people with disabilities on the contract. Fort Sam Houston Team Saves IMCOM Millions

A full and honest assessment of these two pilots bears witness to the full effect and the distraction from the core mission of employing people with significant disabilities that comes with pricing competition.

Melwood has never shied away from the need to continue to modernize and reform the AbilityOne program. But we remain steadfast that reforms must serve the best interests of those with significant disabilities. As drafted, this proposed rule undercuts a program dedicated to empowering the most vulnerable of our citizens. We intend to file public comment and to hold our leaders accountable to represent the citizens they have been appointed to serve.