TRSA: Competitive Sourcing Means More $ for Vets’ Healthcare
“Pound foolish” critics overlook likely savings from sourcing services  

Alexandria, VA —The Textile Rental Services of America (TRSA) today called on Congress to support competitive sourcing of commercial services now performed by the government. Congress should act now to save tax dollars and to provide help to agencies such as the Veterans Administration, which faces a $1 billion shortfall.

Specifically, TRSA Chairman Michael Potack said the idea behind the Bush administration’s idea for competitive sourcing of services provided by the Veterans Health Administration is to improve efficiency, while freeing up money for direct care of veterans. “I believe the private sector can save the VHA money on its laundry services,” Potack said. “That, in turn, could enable the agency to reapply that revenue to veterans’ healthcare. It’s that simple.”

Critics of competitive sourcing have taken a “penny wise and 146 million pounds foolish” attitude that taxpayers should continue putting money into 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 was 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, a recent OMB report titled Report on Competitive Sourcing Results, Fiscal Year 2004, indicated that every $1 spent on competitive sourcing in FY 2004 would produce $20 in savings over five years.

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 services for veterans.

Just as importantly, federal officials 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. “Billions of dollars could be saved through competitive bidding at the VA,” Potack said. “Those savings should be invested back into patient services at the agency. The VA’s current budget woes make the case for competitive sourcing more compelling than ever.”

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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.