February 28, 2003

 

 

Honorable Anthony J. Principi

Secretary

Department of Veterans Affairs

Washington, DC  20420

 

Dear Secretary Principi:

 

          Recently it was reported that the Department of Veterans Affairs (VA) announced its award of a contract to Ocwen Financial Corporations (Ocwen) for the operation of VA’s nationwide Property Management activity.  Ocwen is a private company headquartered in Florida which may be best known for pioneering the offshore relocation of many backroom financial industry functions to India to reduce operating costs by using low-paid workers. 

 

I am greatly concerned by and strongly oppose VA’s decision to outsource VA’s nationwide Property Management activity to Ocwen.  The VA decision to outsource to Ocwen sends a clear signal that the Department of Veterans Affairs and the Bush Administration fully support exporting jobs to foreign countries, jobs which could be performed in America by veterans.  Further, numerous questions have already been raised about the quality of the work performed by Ocwen workers in India.  Based on these and other concerns, I request you act immediately to cancel the contract VA has tentatively awarded Ocwen.

 

           According to “Outsourcing to India” which appeared in the September 2002 issue of Mortgage Banking, Ocwen “started outsourcing significantly more difficult and essential operations such as loan setup, tax administration and early delinquency administration after only 12 to 18 months in India.”  While Ocwen’s ability to achieve cost-savings under the A-76 process for property management may not rely exclusively on its practice of employing low-paid foreign workers, a company which advertises its ability to cut costs by using low-paid foreign workers for “Global Outsourcing Services” certainly raises grave concern.  The A-76 process should not be a tool to make government employees obsolete and replace American jobs with low-paid foreign based workers.

 

          Also, it is not clear to me whether or not the concerns which gave rise to the filing of a class action lawsuit against Ocwen Federal Bank (Hanson v. Ocwen Federal Bank et al) [02-CV-960, D. CT (New Haven)] are related to difficulties resulting from Ocwen’s foreign outsourcing of property management functions.  Regardless of the outcome of the litigation, I hope that VA would assure that improper business practices are not being used by a company providing services to VA.

     

          Thank you for your prompt attention to this matter.  I would appreciate it if you could provide me with a response to this letter by March 14, 2003.  If you have any questions about this request, please contact Mary Ellen Mc Carthy, Democratic Staff Director, Subcommittee on Benefits, at 225-9756.  I await your response.

 

                                                          Sincerely,

 

 

                                                          LANE EVANS

                                                          Ranking Democratic Member

cc: Hon. Robert Scott