At 50 years in business, SourceAmerica looks a lot different than when it was founded. It’s one of the largest contractors under the AbilityOne program, and it offers a lot more than its very first product a creeper to let mechanics slide under cars. As part of a series on the AbilityOne program, the Federal Drive with Tom Temin welcome the president and CEO of SourceAmerica, Richard Belden.

Interview transcript:

Tom Temin And demand has grown across federal agencies for SourceAmerica type products. And you have really expanded a lot in recent years into the professional services, not just janitorial or tell us what the trend is here.

Richard Belden The IT demand or the demand for IT related services truly is growing and it’s growing in the federal sector, as well as the commercial piece and in the area of call centers. We have numerous nonprofit agencies that have tremendous capabilities and they’re performing that kind of work today and as knowledge based jobs, these are great opportunities for people. So we’re focused on developing and growing that workforce.

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Tom Temin And the people that supply the goods and services are not SourceAmerica employees, but you in turn orchestrate, if you will, lots of small companies that are dedicated to employing those with disabilities. Is that generally how it works?

Richard Belden We have a network of about 400 nonprofit agencies across the country who are the actual companies that hire and employ the individuals with disabilities. Our world as we focus on connecting the government customers with these organizations to provide goods and services to the federal customer.

Tom Temin And getting into that IT area, as you say, call centers, that puts you in competition with companies traditionally that you would not have competed with or some high end large IT integrators and so forth that supply these types of professional services. So how does that work when there’s a mandate for some goods and services to use the AbilityOne program, but not necessarily for staffing call centers.

Richard Belden We need to make sure that we’ve got agencies that have the skill sets and the training necessary for the people to provide those skills. We have a large SourceAmerica Academy, which provides thousands of different training programs and component courses. We work to make sure that we have specialized certification training programs to make sure that the individuals have the certifications necessary to perform those sorts of roles and responsibilities.

Tom Temin And under the FAR or whatever regulations apply, is it possible for one of those companies, one of your agencies, to subcontract to a large business and then AbilityOne gets the credit, but it might be coming through one of the other integrator companies.

Richard Belden We have areas where the nonprofit agency, the network, where they are the prime that actually do the work and they have the direct contract. But one of the growing areas that we see going forward is being subcontractors to large federal crimes. For example, we’ve just successfully been added to the NASA SEWP VI  program that is coming forward, will be rolled out over the next few months. And that is a huge government wide acquisition contract where in the past it was all hardware, it was all products that were on that contractor, that schedule. NASA SEWP VI will add IT services to that. And we’ve successfully worked with NASA and there is a 2% spend goal or objective or requirement or a number of these IT services to come from subcontractors within the AbilityOne program.

Tom Temin And this has all occurred as the dollars under contracting spent on services now exceeds pretty much permanently that which is spent on goods.

Richard Belden Absolutely. This is a real step forward for the program and it will be a little different in where our agencies need to be the sub to one of the large contractors. But we have examples of those relationships already working today and think it will be a great opportunity to expand the knowledge based employment opportunities for people with disabilities.

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Tom Temin We are speaking with Richard Belden. He’s president and CEO of Source America. And I said at the outset, you’re one of the largest, actually, you are the largest unit under AbilityOne. Fair to say?

Richard Belden Yes, we have a sister organization, the National Industries for the Blind. Today in our network with these 400 nonprofit agencies, they employ about 36,000 people with significant disabilities on their contracts, producing a real wide range of goods and services. And those agencies, in addition to the 36,000 working on AbilityOne also have another 20 or 25,000 individuals with disabilities working on state contracts or commercial contract. So it is really a large, large, successful program.

Tom Temin And what about unit corps? Where do they fit into the whole picture? The federal prison system.

Richard Belden The federal prison system has work primarily in the in the products area. And the federal government has different priorities where the first priority for some of this work goes to the FBI, the Federal Prison Initiative. NIB had some priorities for different products and the like, but they are part of the supply chain into the federal government.

Tom Temin Right. All right. Well, let’s get back to SourceAmerica. At 50, you’ve got some really great stories. I was actually looking at your website, maybe review briefly the history of this whole thing. There’s enabling legislation way back and you’ve really kept up with the times.

Richard Belden It has been quite a quite a journey for the program. As you mentioned, 50 years ago when it expanded from just focused on individuals who are blind. The Waggoner O’Day act and and they added in the significant disabilities, we have expanded the lines of service and the different offerings. And nearly 400,000 people have been served through the the SourceAmerica network, where, like I said, 36,000 of them are today being supported. The range of services really are incredibly broad. We talked about the IP call center and help desk. We have organizations that provide total facilities management where they will come to a military base or a large installation of buildings and take on the responsibility for all of the facility, the building and grounds, the HBAC and everything in between. Significant work in supply chain management and logistics. A significant portion of the military uniforms are sewn by agencies within the network, as well as all the environmental hazmat suits that our warfighters wear when they go into combat and into different parts of the world, as well as kind of the classical or the early lines of business,  the custodial, the building and grounds, the food service and the like. But clearly the growth is in the knowledge based IT related sorts of areas.

Tom Temin And looking ahead, you’ve got a long list of legislative priorities that you would like to see happen. And just as the Javits amendments to the original Wagner O’Day Act expanded it from beyond the blind to people with all sorts of disabilities, you’re calling for Javits, Wagner O’Day modernization. What do you think needs to be done? What would it look like?

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Richard Belden First off, I think we need to change the definition of disability. Because when it was written years ago, we talked about an individual not being able to maintain competitive integrated employment. Individual disabilities have demonstrated that they can do darn near anything. And so I also think it would be valuable to change the ratio instead of a 75% requirement, lowering it to a 51% requirement, but including all of the jobs, not just the direct labor jobs, including the supervisory, including the management, including the quality teams and things like that, because we really do support the upward mobility of individuals to continue to grow in their career or outward mobility if they choose to want to leave AbilityOne and move into the community. One of the areas that also is incredibly important when you talk about a successful employment outcome, long term stable employment is a really good outcome for many of these individuals. So we’d like to see the ratio change, we’d like to see the expansion to include the indirect jobs and that the ones that they support as well as the sorts of things that the Commission is talking about, the AbilityOne commission is talking about today with respect to individual employment plans.

Tom Temin And the related issue is that wages rose significantly, I think, of just a few years ago for AbilityOne contractors. And what do you see ahead for pay just as country pay levels go up generally?

Richard Belden In this last year the average hourly wage for an AbilityOne worker within a sort of American network was nearly $19 an hour plus benefits, which is a very substantial wage. In fact, it’s a wage above most of the state minimum wages across the country. Now as one of the unintended consequences of the executive order that President Biden had years ago to require the minimum wage on federal service contracts to be $15 an hour and then indexed to inflation. One of the unintended consequences is when wages went from 15 to $16.20 for 1740 and the minimum kept increasing, the federal contracting community didn’t receive additional dollars. And so when you have a fixed pot of money and you have a fairly labor intensive service delivery, what gets squeezed is the number of hours that can be worked against that contract that’s had an unintended negative consequence on the AbilityOne program as it reduced the number of hours that people could work based on the dollars that the federal contractor or the contracting officer had for a particular job.

Tom Temin In that sense, you almost have some of the same concerns as every other contractor with the squeeze. The government, sometimes, there’s inflation in wages, and yet there’s not a compensatory increase in contract allowances.

Richard Belden That’s absolutely true. And these nonprofit agencies, they run a business, but they also have this huge social mission that they’re committed to. But at the end of the day, they have to pay their people. They have to provide benefits. They have a company overhead that they’ve got to run so that they are running a business with a different sort of employee base and those are people with significant disabilities.

Tom Temin And just a final question to on another area that you’re looking to Congress maybe to help with, and that is breaking down barriers for people with disabilities in agriculture. That’s something you don’t hear about as much.

Richard Belden One of the congressmen came to us talking about how we could help and could we help them improve the lives and the opportunities for people with disabilities in the world of agriculture. We have a number of agencies that work in that arena and actually they grow produce and the like and use it both internally but sell it as a business. And so we were able to marry up the congressman and his staff with a couple of individuals from these nonprofit agencies to talk about how they support people with disabilities working in agriculture and working in them in the farming world. And so that ended up being a real opportunity to help give back and support a member of Congress on a on a mission that was really important to them.

Tom Temin And just to wrap here, then, you view the whole enterprise of SourceAmerica as having a net benefit financially.

Richard Belden Absolutely. The AbilityOne program really is a huge success in multiple different areas. First, it delivered on a social mission to provide career and job opportunities for people with significant disabilities. Second, it’s really part of the wide industrial or the DoD industrial base supporting the war fighter. The third, it has a positive return on investment. For every dollar spent administering the AbilityOne program. There’s a 250% return based on the increased taxes these individuals pay now that they’re employed and the reduced benefits that they need from the federal government. So it’s unusual that you have a federal program that delivers that social mission and is a positive financial benefit to the government.

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