Private-Sector Laundries Mean Better Value for Vets, Taxpayers
“Pound foolish” critics overlook savings, quality of services

Alexandria, VA — The Textile Rental Services Association (TRSA) today called on the House Committee on Veterans Affairs to actively support competitive sourcing of commercial services now performed by the Department of Veterans Affairs. Congress should act now to save tax dollars and help agencies such as the Veterans Administration.

Specifically, TRSA Chairman Michael Potack asked for the introduction and passage of a House companion bill to S. 1182 that would remove the ban on competitive sourcing activities at the Veterans Health Administration (VHA). By doing so, the VA will again have access to an important management tool that would ensure quality, while improving efficiency in ways that would free up funds for direct care of veterans. “The private sector can save the VHA significant money on its laundry services,” said Potack, who also is president of Unitex Textile Rental Services, Mt. Vernon, NY. “That, in turn, could enable the agency to redirect that revenue to veterans’ healthcare. It’s that simple.”

Critics of competitive sourcing continue to take a “penny wise and 146 million pounds foolish” attitude that taxpayers should continue to bankroll the agency, even if it hasn’t taken all reasonable steps to control costs. The case for competitive sourcing to save tax dollars is particularly compelling in the area of linen and laundry services. The U.S. Office of Management and Budget (OMB) has projected significant savings in the area of VA laundry services, which processed 146 million lbs. of linen in FY 2004.

According to the OMB, a competitive-sourcing program that would place VA jobs in competition is projected to generate savings of $1.3 billion over five years. Of that amount, a savings of $56.4 million was projected for laundry/dry-cleaning and linen/uniform operations. In addition, OMB data released earlier this month indicates that taxpayer savings would continue to grow as more competitions are completed. Results show that for every $1 spent on competitive sourcing during FY 2003, 2004 and 2005 produced a return of $27.

Private Sector Delivers Laundry Savings, Quality

The General Accounting Office (GAO) also reported in late 2000 that outsourcing at the VA’s Battle Creek, MI, laundry resulted in savings of 24% on an annualized basis. In Palo Alto, CA, the VA lowered its annual operating costs by 60%. TRSA believes that the VA could achieve even greater savings than the GAO’s overall estimates in 2000. These savings could be plowed back into providing healthcare for veterans.

Just as importantly, lawmakers must remember that they are spending taxpayer dollars. They have an obligation to apply those funds as efficiently and cost effectively as possible. “We at TRSA support the administration’s competitive-sourcing initiative across all federal agencies, and specifically in the Department of Veterans Affairs, where the initiative is now stuck in neutral,” Potack said. “Let’s face it: Laundering textiles is not a core mission for VA hospitals; healthcare is. Thousands of U.S. hospitals nationwide have recognized this fact and realized that they can save money and get at least as good or better quality by allowing laundry professionals to competitively bid on this work. All we are asking is that veterans and U.S. taxpayers get the same consideration as other healthcare consumers.”

The Textile Rental Services Association of America (TRSA) is a national trade association representing more than 1,100 company locations in 26 countries worldwide. Since 1913, TRSA members have provided textile maintenance and rental services to commercial, industrial and institutional accounts—over 90 percent of TRSA member companies are small businesses. TRSA members serve hygienically clean textile items to millions of customers in commerce, industry, and other professions from automobile service to manufacturing, restaurants and hospitals. The textile rental industry generates yearly sales or roughly $12 billion. U.S. linen supply and industrial laundering companies employ more than 132,000 people.