Is your small business involved in manufacturing or distributing any of the following products. Do you realize that you no longer can bid your product or services to a public agency in the State of Oregon and elsewhere in the Nation? Billions of tax payer dollars are used every year to buy these products and services, but the service you provide is not wanted regardless of the price you can deliver that product or service?
Why? Governments are going to extremes to fund their pensions and benefits by putting out all this work to favored non profit industries and are in fact pocketing a 4 percent return to line their own pockets. They get to act as their own judge and jury in determining the out come of claims filed by private individuals.
So, who is included in this backdoor Nationalization of Main Street? Anyone who provides the following products and services:
What industries are affected?
Agency Courier Services, Assembly; Bakery Goods, Bridge Tending, Bulk Mail Services, Certified Lead Abatement Contracting, Collating, Commercial Painting, Confidential Record Destruction, Confidential Record Storage Contract Dishwashing, Copy Center, Disassembly, Document Imaging Services, Drug Testing Kits, E-waste, Eyeglass Manufacturing, Fax Service, Fire Logs/Firestarters, Firewood Vending, First Aid Kits and Components, Flat Sheets, Folding, Food Service, Fulfillment, Grounds Maintenance, Gym Shorts, Hand Stamping, Hospitality Services, HVAC Filters, Hygiene Kits, Janitorial Services, Labeling, Land Restoration Services, Laundry Services, Light Maintenance, Liquid Soaps, Mail Services, Monogramming Name Tapes, Name Plate Engraving, Nursery, Order Fulfillment, Packaging, Parking Lot Sweeping, Pillow Cases, Plaques, Product Salvaging, Recycling, Remanufacture Laser Cartridges, Residential Painting, Rest Area Maintenance, Rubber & Date Stamps, Safety Apparel, Sale of Shredded Material, Screen Printing, Secondary Wood Products, Sewing, Shredding, Shrink Wrapping, Sign Engraving, Signs, Silk Screening, Sorting, Stapling, Subassembly, Telephone Answering Service, Temporary Staffing Services, Textile Manufacturing, Toner Cartridges, Trash Can Liners, Unarmed Security Guard Services, Weed Abatement, Wood Products, Wood Survey Products, Wool Blankets
How can I protect my business or my job?
Get involved. Join the Fair Competition Alliance. Pool resources and ideas with other businesses and labor leaders to protect taxpaying businesses and union worker members. Monitoring the administration of this law and educating legislators, business, and labor is necessary to ensure that the abuses of this law will be eliminated. FCA advocates for fair competition while protecting and increasing job opportunities for the severely disabled who are the intended beneficiaries of this law.
What can I do to get involved?
Join and support the Fair Competition Alliance. FCA will work to protect your right to fair and open competition in public contracting in Oregon. Inform your customers, friends, colleagues, customers and other business and labor representatives of the problem and its impact.
What kind of support is needed?
Developing membership and financial support for ongoing research, lobbying, and legal cases is our top priority. The Fair Competition Alliance has worked with a broad cross-section of business and labor over the past ten years. As a member of the Fair Competition Alliance, you have a stronger voice in calling for equity and fairness in public contracting in Oregon.
How Long has this being going on? Ten years and billions of wasted dollars.
Source: http://fcaalliance.com/about.htm
| 1) What is the "Products of Disabled Individuals Law" (PDIL) ?
The "Products of Disabled Individuals Law" [ORS 279.835] is an exemption from Oregon public purchasing rules:
- Under this exemption, any public agency desiring to procure a product or service listed on a State of Oregon Product of Disabled Individuals law Procurement List, must award the public contract to a non-profit under the PDIL if they request the contract.
- The price on any goods or services provided by a non-profit under this law must be set by the State Department of Administrative Services (DAS) according to Oregon Statute. There is no maximum or minimum price that must be set under law, but the statute mandates that the non-profit recover its costs. The statute also allows a margin in reserve for equipment replacement. Again, there is no maximum or minimum regarding the margin in reserve, but the state has established a policy of up to 6% of gross contract sales as the ceiling.*
Based on FCA's research, the State Procurement Office has never required any financial verfication or any auditing to demonstrate the legitimacy of the non-profits' pricing and margin in reserve representations. The DAS/SPO promotes and defends the non-profit pricing representations and arbitrarily allows up to a 6% margin in reserve without any verifiable financial data or facts to support it. Until accountability and independent financial and program oversight is instituted, business and labor will continue to be adversely affected while the intent and legitimacy of this law's implementation will remain unfulfilled
* In July 2007, the State of Oregon Department of Administrative Services State Procurement Office made the unprecedented decision to allow the implementation of a "No Price No Pay" contract for Recycling Services provided by Garten Services, Inc. of Salem, Oregon (Determination of Suitability & Order SD (c)7/13/2007). This decision usurps statutory authority and elminates any financial accountability of this contract and in effect all other contract awards to Garten Services, Inc. since it is impossible for the state to determine whether the associated contract costs and prices representated are accurately represented in other price determinations as approved by the State Procurement Office for other products and services for any definable time period.
2) What is a QRF?
A Qualified Rehabilitation Facility (QRF) was an unofficial term created by non-profit organizations that train and employ people with disabilities under this law. This term has since been adopted by the state to describe participating organizations in this program. To qualify to receive public contracts without competitive bidding, a QRF must have disabled individuals working in sheltered workshops or activity centers who perform at least 75 percent of the work hours of direct labor involved in producing products or providing services on those contracts. As per statute, the 75% requirement is suppose to apply to the direct labor of its contracts whether or not the goods or services are procured by public agencies. As of 1997, or for the first 20 years of the law, the DAS/SPO administered the 75% on a contract by contract basis. After challenges to the program by FCA and other concerned parties, in 1998 that interpretation was changed to an organizational wide basis.
3) What goods and services are offered by QRFs?
There are no limitations regarding the types of goods and services that can be offered by QRFs. The June 1998 Certified Qualified Rehabilitation Facility Directory/ Procurement Guide listed 57 QRFs that provided over 70 different types of goods and services. By January 2008, the number of participating non-profits dropped to 43 while the number of goods and services has greatly increased.
As of January 2008, the policy of DAS/SPO has been to determine not only the suitability of a product or service for a participating non-profit organization, but also approve entire categories of "tied" products and services related to these suitabilities whereby a non-profit has seemingly unlimited expansion opportunities within that industry area. "Recycling Services" is one example of this type of expansion.
Products and services range from assembly, packaging, grounds maintenance, automated mailing services, custodial services (including boiler operation and maintenance)and all types of temporary staffing services including including flaggers, skilled trades and office workers, to courier services, document shredding, and bridge tending. The remanufacture of toner cartridges is also an approved product which utilizes prison labor inside prison walls.
Currently there are hundreds of products and services provided by these non-profit firms in Oregon.
4) Who is considered a Disabled Individual?
The definition of "disabled individual" used in the Products of Disabled Individuals Law has three standards which must be met:
- Have a certified disability,
- The nature of the disability must prevent the person from keeping a job in regular competitive employment, and
- Some sort of specialized employment service must be provided.
5) My company employs a number of people with disabilities, how do I qualify for this program?
Unless you are a non-profit organizations providing rehabilitation and employment services you do not qualify. The statute excludes any for-profit business in which the net income goes to any shareholder or other individual.
Under the protection of the Americans with Disabilities Act (ADA), many people with disabilities are able to hold jobs in the competitive marketplace through reasonable workplace accommodation. These people are not considered to be disabled under the definition of disabled individual in ORS 279.835.
6)What if my price for the product or service is less?
That does not matter. The "Products of Disabled Individuals" law only gives state and local agencies two choices, contract with a non-profit QRF or do it in-house.
What about skilled trades that could not be done by the developmentally disabled?
- There are no restrictions on the type of products or services that may be offered by non-profits claiming to employ disabled individuals under this law. There is no limitation regarding the types of equipment or technology that can be offered by participating non-profit firms. This policy has evolved because the state and not adquately monitored whether or not disabled individuals no capable of competitive employment are actually doing the work.
7) But my business is not interested in government contracts. So why should I care?
Many QRFs compete against for-profit businesses for private contracts and have displaced hundreds of public and private sector workers since 2002. Non-profits under the PDIL are:
- Exempt from property and income taxes.
- Eligible for employment subsidies.
- Eligible to pay less than minimum wage, including a piece rate based on productivity.
- Mandated to fairly recover capital equipment purchases, maintenance, and replacement costs even if the contract does not utilize 100 percent of the equipment's capacity.
- Entitled to purchase equipment, materials, supplies and services under the same bulk purchasing advantages as any state agency.
- Guaranteed contracts with public agencies which creates economy of scale advantage over their smaller for-profit competitors.
Source: Fair Competition Alliance, Jerry Eggers http://fcaalliance.com/about.htm
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