Federal Employees News Digest

DOD initiative is emblematic of broader contracting debate

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Federal employee organizations long have worked to limit the widespread practice of contracting out many government functions to private companies. This week, FEND's Nathan Abse talks with John Threlkeld, American Federation of Government Employees legislative representative, about the union's current activities that center on the Defense Department—a perennial top focal point for this effort. AFGE, which represents thousands of employees at DOD, is taking aim at the Army and Air Force, which plan to cut 9,500 and 13,500 feds, respectively. The cuts are part of DOD's plan to cap its federal employee count at fiscal 2010 levels. While the cuts are designed to address budget cuts—AFGE argues that the move is likely to create more waste as the government hires more, and more expensive, contractors to do the work of feds whose jobs are eliminated.

Q&A with AFGE Legislative Representative John Threlkeld

With budget cuts already in place—and a lot more on tap in mandatory cuts if the super committee fails to negotiate less drastic cost reductions—your union is calling on DOD to explain its plans to eliminate thousands of civilian employee jobs while continuing, and even increasing, spending on government contractors. Where is the Obama administration on its contracting policy?

Threlkeld: The administration—or at least DOD—has swung back and forth on a pendulum on the contracting issue. When the Obama administration came into office, the department leadership said it was committed to ‘rightsizing’ its workforce and reducing its over-reliance on contractors. There even was talk about insourcing a lot of jobs that federal employees could perform more efficiently. But work that was very apparently ‘governmental,’ and closely associated with government functions, was [nevertheless] contracted out.

Can you tell us some of the specifics involved?

Threlkeld: The [civilian workforce cuts that are proposed] are part of department's ‘efficiency initiative.’ We're working with Congress and with the administration to try to improve the outcomes. As some of your readers may know, the Senate defense authorization bill under consideration would cap contractor spending at FY 2010 levels. We would prefer to see those caps not be imposed on the federal employee workforce, and instead see DOD be managed by [realistic] budgets and workloads. That is, when DOD has work to do, and money to get that work done, they can use federal employees or contractors—depending on the usual and correct criteria of cost, policy, risk and law—but they wouldn’t be prevented from using civilian employees just because they are civilian employees. Here there are some provisions in the Senate bill we do endorse. We do endorse the Senate approach of capping the contractors, depending ... because that would at least reduce the incentive of DOD substituting contractors for federal employees. At the same time, we know that a lot of managers understand that the efficiency initiative is resulting in some perverse performance decisions; the contracting out of work that could be done more efficiently in-house, or should be performed in-house because of the efficiency initiative.

Can you tell us how the proposed cuts, and money-saving moves already under way, are affecting managers and employees within DOD?

Threlkeld: We suspect there will be a lot of frustration within the department, a lot of resistance on the part of managers, to the efficiency initiative. Another concern we have about the efficiency initiative is the arbitrary nature of these cuts. The department, so far, has tried to muddle through performing the same functions as before, but with fewer federal employees. We have encouraged our locals to go to their [workplaces] and to find out which [parts of their work] will be downsized as a result of these personnel cuts. It's a terrible [situation]. The Department of Defense allows for exceptions in certain circumstances, but based on our knowledge about how that 'exception process' works and how the petitioners are [treated], we don't think it’s a realistic process.

Are there any hopeful signs in terms of legislation that might translate the almost inevitable attempts at cutting costs into some real savings? And how should feds outside of DOD view what's happening there?

Threlkeld: The House defense authorization bill also has some excellent provisions, provisions where they are trying to move things in a ‘total force management’ direction, so that cuts better take into consideration the whole range—civilians, military personnel and contractors—and make performance decisions based on the merits, as opposed to placing arbitrary constraints focused on the civilian workforce. The real problem [with all such legislation] is compliance. The law is already there. The difficulty is getting the department to comply with the law. As far as other agencies are concerned, things that affect the entire federal workforce often start at DOD, and are actually copied or end up at other agencies.

While you have mentioned some good provisions in the House and Senate bills, it's fair to say that AFGE’s reaction is disappointment with the administration in cuts underway at DOD so far, and things don’t look great ahead, correct?

Threlkeld: I don’t think there’s any question that AFGE is disappointed in how the efficiency initiative has been translated from paper to practice [so far]. We have engaged in discussion and worked with DOD and administration officials at all levels in our attempt to make the process more accountable to taxpayers and less inequitable to federal employees. I am not going to minimize our disappointment with the situation so far.

Why is your attempt to get out the story on the efficiency initiative—and on upcoming attempts to cut deeper into the civilian workforce at DOD—timely right now?

Threlkeld: We’ve been talking about the efficiency initiative for quite some time, really. Defense Secretary Gates made an announcement back in August 2010, where he applied the efficiency initiative—the goal of the FY 10 [cost] cap—to the Office of the Secretary of Defense, and to [other] Defense agencies. Then in January of this year, he took the cap to each of the services—the Army, Navy, Air Force, and Marine Corps. Here, there was a lot of talk about 15 percent cuts on service contracts. Ultimately, these cuts were applied only to a very few subcategories of service contracts. So, the amount of money saved from the civilian workforce [as these cuts were applied] far exceeds the amount of money saved from contractors, even though contractors cost more and they are far more numerous. We have been talking about this issue for a long while.

If you wanted to put a headline on this story in the general media today, what would you want the headline to be?

Threlkeld: “The efficiency initiative is actually fraudulent”—that’s it. And capping the civilian workforce at FY 10 levels without imposing comparable constraints on contractors is going to lead to more contracting, which inevitably will cost more—and perhaps result in services that should be performed by federal employees, because of their importance and sensitivity, instead of being contracted out.

AFGE had hoped there would be cuts in the number of contractors, correct? And what happened is that the cuts that are being made look like they'll be-expensive and wasteful?

Threlkeld: With the cuts in defense spending that are being discussed at all levels, I don't think there is any question that, overall, the whole workforce is going to have to make sacrifices. We’re not saying that DOD civilian employees shouldn’t have to make sacrifices. But it shouldn’t end up being just our [civilian employee] sacrifices. And contractors are just not being asked to make sacrifices. Remember, they cost more, and there are more of them. If you look at the statistics, they are just huge—they’ve doubled, from about $80 billion to about $160 billion, while civilian personnel costs have increased much more moderately. We’re saying to make DOD costs more manageable, we need to focus more on [cutting] contractor workforce costs. That’s just common sense. The problem is that we know about the federal employees—how many there are, how much they make, what they do. But we don’t have comparable information about contractors. It’s very easy, therefore, for the department and others to fall into a mindset, that 'in order to show we are reducing our costs, we are going to reduce our civilian employee costs.' A lot of it is, again, that they simply cannot identify and control the comparable contractor costs.

What can the average fed—union member or otherwise—do to improve the situation here?

Threlkeld: Federal employees—and other citizens—should encourage their lawmakers to require DOD to abide by the law and manage the workforce by [rationally assessing] workloads and budgets, and where there’s work to do, there should be no constraints on using civilian employees to do it. That's our judgment. We should be aware of instances in which the workforce must be reduced, and rather than get rid of the work, or just quickly contract it out, that situation should be reported. It is a violation of numerous laws now—at all agencies—to contract out any work that is best performed by federal employees in a cost comparison. This is a benefit to taxpayers, too. People need to be very sensitive to any ‘direct conversions’—sensitive to what happens when you contract out work. One of our biggest concerns with this administration is that they have failed even to issue guidance that would require agencies to comply with the law properly. In many instances, we find managers who are still not even familiar with the law.

Doesn't that failure show a lack of political will in an administration that is supposed to be friendly to labor?

Threlkeld: Yes, I agree. It just is not a priority for the [administration], apparently.


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