The dispute centers on the Biden administration’s September 2022 decision to award a $6.6 billion contract to Maximus, a McLean, Virginia, company that manages call centers across the U.S., and the Biden administration’s Decision to terminate contract after 15 monthsThe company backed out of the contract, citing concerns about customer service, and officials with the Centers for Medicare and Medicaid Services amended the contract to include a “labor harmony agreement,” which is essentially a pledge by participating companies to reach a settlement with the union and ensure there are no labor strikes affecting call centers.
Bids for the revised contract are due by Friday.
There is little precedent for the federal government to abruptly terminate such a large contract and insert a collective bargaining agreement. Maximus filed a complaint with the Government Accountability Office last week, asking the federal auditing agency to investigate the company’s decision to rebid a contract it had spent years trying to win.
Maximus said in a statement that it “objects to the premature, improper and unlawful resourcing of our highly successful operations” that oversees the call centers. Maximus is the federal government’s largest employer of call center workers, with more than 10,000 workers nationwide. The company’s CEO stressed this month that Maximus has strong labor relations, saying, “Our employees are the heart and soul of our company.”
The Biden administration has defended its decision, pointing to strikes that occurred last year at call centers run by Maximus.
“Our call centers have experienced worker strikes, and HHS is confident that reaching a labor peace agreement and rebidding the contract will ensure that the millions of Americans who rely on our dedicated workforce receive quality customer service,” the Department of Health and Human Services said in a statement.
Some Democrats questioned whether rebidding the contract would jeopardize service to more than 35 million Americans who rely on 1-800-Medicare, the Affordable Care Act customer service call line, and other response center services to navigate the complexities of health insurance. Maximus had been running 1-800-Medicare and the Affordable Care Act support services since 2018 after acquiring the business from another contractor, and had high customer satisfaction ratings. The decision influenced federal officials’ decision to award the company a nine-year contract in 2022.
Democratic lawmakers have warned that switching to a new contractor could be disruptive, especially if it happens in the middle of the registration period.
“The residents of my district depend on the services CMS provides every day, and my only concern is their health and making sure they are not harmed by this transition,” Rep. Gerry Connolly (D-Va.) said in a statement to The Washington Post. Connolly, who sent a letter to CMS executives last week seeking an explanation for the contract changes, represents the district in which Maximus is headquartered.
But other Democrats say the Biden administration’s action comes too late, arguing that Maximus has long treated its employees unfairly by offering low wages and limited benefits. Some call center workers walked out and protested in Washington, D.C., last year, calling on federal authorities to pressure the company to address its workforce issues. Maximus employees walked out of their jobs during Obamacare’s open enrollment period in November 2023 to draw attention to their fight against company executives.
“Now there’s a re-competition happening, which is a good thing.” Long-time critic DeLauro, the top Democrat on the powerful House Appropriations Committee, added legislative language to the 2022 government spending bill to delay the award of the contract to Maximus, he said in an interview this week.
“At the time, we were waiting for the White House to issue an executive order on labor reform,” DeLauro said. January 2023 Notes I gave suggestions on how to do it. Federal contracts can be structured in a way that is more favorable to workers. “I was trying to slow down this process until the administration issued an executive order.”
Senate Republicans removed DeLauro’s language, clearing the way for Maximus to be awarded the $6.6 billion contract in December 2022.
The labor harmony clause was welcomed by officials of the Communications Workers of America, who said they resisted Maximus’ efforts to organize call-center workers. Union leaders touted the revised agreement as a victory for the labor movement, likening the workers’ protests to the historic efforts of the civil rights movement in the 1960s and noting that some of the key organizers at Maximus’ call centers were black women.
“We’re hopeful that whoever wins the contract will be able to sit down and work out a collective bargaining agreement that gives workers better wages and benefits,” Claude Cummings Jr., president of the Communications Workers of America, said in an interview last week. He hopes it will inspire other call centre workers to “contact the CWA and express an interest in organising themselves if possible”.
Federal contracting experts counter that rushing to rebid after initially awarding the contract, especially adding the labor agreement clause, is confusing and will lead to chaos. Some of Maximus’ subcontractors have written letters to the federal government defending the company and urging officials to reconsider.
“There’s no clear problem that this is going to solve,” said David Bartow, CEO of the Professional Services Council, a lobbying group for federal contractors that includes Maximus as a member. He noted that the original contract was for up to nine years, with options to renew annually, and that federal officials initially touted Maximus’ long track record of helping manage government health services. He added that there’s no way to guarantee a company won’t encounter labor disputes.
“These actions undermine the contracting process by prematurely terminating contracts that demonstrate strong performance and replacing them with unproven approaches,” Berteau said.
Maximus is The workers’ wages are unfairly low and are the product of the way federal contracts are awarded, which creates incentives for contractors to keep wages relatively low in order to win government jobs. The company has told Congress: Service Contract LawThis will help determine how local wages are set on federal contracts.
Maximus executives and supporters defended the company’s broader work environment, pointing out that The Washington Post last week named the company to its list of Top Workplaces in the Washington, D.C., area. (The list was compiled by a different Post team than the one that wrote this article.)
News that federal officials are rebidding the contract has also shocked Republican lawmakers, who have blamed the White House. Political ExpediencyCiting his administration’s own pledge to the labor movement, President Biden Explained President Trump has called himself “the most pro-union president in American history.”
Meanwhile, the CWA supports the president, with union leaders pointing to his track record of supporting their causes.
‘Joe Biden must be reelected,’ Cummings Recommended “We need to get out there and vote,” union members said Wednesday at the CWA’s annual legislative meeting.
“Resetting a nine-year contract in two years has nothing to do with improving services — it’s just the Biden Administration sacrificing continuity of care for our seniors to benefit a major union just before the presidential election,” Sen. Bill Cassidy of Louisiana, the top Republican on the Senate Health Committee, said in a statement to The Washington Post.
Federal health officials declined to answer a series of detailed questions about who made the decision to rebid the contract, how they reached that decision, or what their discussions with union leaders and congressional Democrats were, but after the Wall Street Journal report, they defended their actions as appropriate. editorial Last week, he suggested the Biden administration was “putting union pressure on federal contractors” by rebidding contracts with more worker-friendly clauses.
“There is no one with influence [it]”Even I’m not involved in the process that CMS is going through with the contract bidding process,” HHS Secretary Xavier Becerra told reporters last week. “They’re basically doing that work in their own shell.”
Four federal officials The person, who spoke on condition of anonymity to discuss the contract decision, said the HHS secretary’s office was heavily involved in the decision to rebid the contract after pressure from labor unions and Democrats such as DeLauro.
G.K. Butterfield, a former Democratic congressman who now works for Maximus, said he ran into Becerra at a social event in September 2023 and was told the HHS secretary shared the union’s concerns about Maximus.
HHS did not respond to questions about Becerra and Butterfield’s conversations.
DeLauro, a longtime critic of Maximus, said he would be open to the company being awarded the contract again under new terms.
“Nobody is preventing Maximus, or frankly any other company, from bidding on the contract,” DeLauro said. “If they had competed and accepted the collective bargaining agreement, [agreement] … They can move it forward.”
Federal health officials were providing some reassurance to the company behind the scenes, even as Maximus began moving to rebid the contract.
According to documents viewed by The Washington Post, Maximus met all of the contract’s key requirements at “satisfactory” or “very good” levels of performance in an annual review conducted by a federal contracting officer in November 2023. The contracting officer who conducted Maximus’ review concluded that “it is likely to recommend the company to meet similar requirements in the future.”
The following month, union leaders rallied outside an HHS facility to protest Maximus’ working conditions, joined by several Democratic lawmakers. Maximus workers shared their experiences helping customers find health insurance when they themselves could not get it, and said the company’s wages were well below the $25 an hour needed to be a livable wage.
“The Biden administration talks a lot about improving hiring for federal contractors and racial equity, but we’re not seeing that at Maximus,” said Katherine Charles, a call center employee from Riverview, Florida.
“Shame on you! Shame on you!” yelled Cummings, the CWA president, as he led the crowd in pointing at the health department headquarters. He added that he had “discussed the situation with everyone,” including Senate Majority Leader Charles E. Schumer of New York and Vice President Harris.
Three days later, federal health officials announced they would rebid the contract, and Maximus officials say they plan to try again.
