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Washington, D.C.—The result of an Internal Revenue Service (IRS) decision to retain in agency hands the work of providing forms and publications internally and to the public while effectively forcing the closing of two of its three distribution facilities will be reduced service to everyone, the head of the union representing IRS employees said today.

The IRS decided, as the result of a public-private job competition, to retain in-house the work of its Area Distribution Centers (ADCs), but to close its distribution centers in Richmond, VA, and Rancho Cordova, CA, with the loss of at least 274 jobs.

The work of the ADCs in fulfilling countless requests every year for the more than 21,000 IRS published products will now be performed by IRS employees in Bloomington, IL—where employment also will be reduced.

“This is a perfect example of the problems inherent in this administration’s relentless drive to contract out as many federal jobs as possible,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU).

“Even when the work stays where it belongs—in the hands of federal employees,” she said, “it often is at a cost just like this one”—the closing of two of three facilities performing the function around the country.

As a result of this decision, the jobs of 72 permanent and 67 seasonal employees will be lost in Richmond, while 49 permanent employees in Rancho Cordova will be lost. At least 82 seasonal workers in Bloomington will lose their jobs, as will four permanent employees.

In the federal sector, seasonal employees, who work between three and 11 months in any given year, frequently are long-service workers, returning to their jobs year after year.

The rules covering public-private competitions for government work are set out in Office of Management and Budget (OMB) Circular A-76, a publication that was substantially revised last year to make it easier for private contractors to take over federal jobs.

Under the rules, federal employees can put together what is known as a “most efficient organization,” or MEO, which calculates and puts forward the employee bid to retain the work.

Often, and largely because of the way the rules are written to favor contractors—such as giving contractors the right to exclude from its bid certain costs that clearly should be included—the MEO finds that the only way it can compete effectively is to cut—and sometimes sharply—the number of employees in the existing function within the agency, which is what occurred in this instance, even if that inevitably means a reduced ability to meet customer demand.

President Kelley expressed her displeasure at the refusal of the IRS to agree to use all the programs available to it to mitigate the impact on employees in Richmond and Rancho Cordova. Kelley noted that NTEU, both nationally and in the affected locations, is working to advise and counsel affected employees, as well as to ensure that the agency meets its obligations to them.

Moreover, she said, the union is continuing its efforts on this issue, filing a motion with the Federal Service Impasses Panel (FSIP) to halt any further action by the IRS with respect to toll-free telephone work in the ADCs in light of recent legislative activity that could, at the least, slow down the administration’s effort to contract out the jobs of federal workers.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including about 98,000 in the IRS.