AFGE 2013 Issue Papers
Table of Contents

Another Manufactured Crisis: What’s Next in the Fiscal Showdown………1
Federal Pay……………………………………………………………….…..…..4
Federal Employees’ Health Benefits Program……………………………….15
Official Time for Federal Employee Union Representatives………….........22
Arbitrary Cuts in Civil Servants………………………………………………..26
Sourcing: Complying with the Law……………………………………….......31
Capping Taxpayer-Funded Service Contractor Compensation……………43
Transportation Security Administration and TSOs…………………………..46
Domestic Partnership Benefits……………………………..………………….49
Employment Non-Discrimination Act……………………………………..…..55
Paid Parental Leave………………………………………………..…………..57
One America, Many Voices Act………………………………………….…....60
Department of Veterans Affairs…………………………………..……………62
Department of Defense……………………………...……….………………...71
Federal Prisons………………………………………………………………….90
Social Security Administration ……………………………………….…...…103
National Guard/Reserve Technicians ………………………...……….……108
D.C. Workers’ Issues …………………...……………………………..…..…117
Equal Employment Opportunity Commission. ……………………..……...120

Another Manufactured Crisis: What’s Next in the Fiscal Showdown?

Background
At the beginning of January, President Obama signed a tax deal that restored higher Clinton-era rates to those making over $450,000, and funded an extension of unemployment insurance benefits to the long-term unemployed, extended for another year the $240 monthly transit subsidy, but did not extend the 2% payroll tax holiday. The deal also delayed until March 1 the sweeping across-the-board agency cuts, known as sequestration, which will force furloughs and RIFs on federal employees.
In January, after many threats, Republicans finally agreed to lift the debt ceiling, but only until May. They are once again ignoring the real problems facing our economy, such as long-term unemployment and wage stagnation, and instead are demanding Medicare, Medicaid and Social Security benefit cuts, as well as massive cuts to federal employee pay, health insurance, retirement, and jobs. Unless they persuade Democrats in Congress and the President to agree to such cuts, Republicans are threatening to make the U.S. government default on its obligations—including obligations already incurred by the Congress.
The FY 2013 Continuing Resolution expires on March 27. The next day the pay freeze is supposed to be lifted, finally – after a two and a half year pay freeze -- providing a 0.5% pay raise to federal employees for the remainder of 2013. But the House of Representatives may vote to continue the pay freeze through the end of this year.
Federal Employee Sacrifices So Far

Federal employees have made substantial sacrifices over the past two years. Since 2011, budget savings derived from reduced compensation to the federal workforce has totaled at least $103 billion (over $50,000 per employee), as measured over the ten year budget window. This figure includes:

2-year pay freeze & 2013 raise of 0.5% delayed to April $88 billion

2.3% increase in employees’ retirement contributions for post 2012-hires (part of UI extension in February) which scores as a tax increase on middle class $15 billion

Total $103 billion

Federal workers and their families are hardworking, patriotic, middle class Americans who are struggling just like other Americans. No other group of Americans has been asked to financially contribute the way they have, and it is time to stop taking from these middle-class federal workers whose gravest sin has been to dedicate their lives to public service. Enough is enough.

There is no legal, budgetary, or operational reason to place an even greater burden of the spending cuts on federal employees, who have already given $103 billion toward deficit reduction. Meanwhile, government contractors haven’t given one red cent.
What Should Be Done Instead
AFGE and the other affiliates of the AFL-CIO strongly believe that the Congress and the White House should fix the economy first. The most serious economic challenge facing America is the continuing jobs crisis, not the deficit or the national debt. A deeply misguided focus on budget austerity already has caused a “double dip” recession in Europe. More budget austerity in the United States could keep us from ever fixing what is wrong with our economy. Our top priorities must be creating jobs by investing in infrastructure and education, raising wages, reducing inequality and increasing economic security for working people.
There should be no negotiation—period—about whether to cause a default of the U.S. government. Also, Republicans have just as much incentive as Democrats to cancel across-the-board sequestration cuts, and are in no position to demand anything in return. We are asking elected officials to stand up to Republican demands by doing the following:

Oppose cuts to federal employee pay, health insurance and retirement, as well as cuts to Social Security, Medicare and Medicaid.
Working families, including those of federal employees, need more economic security, not less. Our economic problems are not caused by overly generous federal retirement, Social Security, Medicaid or Medicare benefits. Social Security has not added one dime to the deficit.
We do have a projected budget imbalance over the long term that is driven by health care cost growth, but the solution is to make delivery of care throughout our health care system more cost effective, not to shift costs to beneficiaries. If Republicans were serious about reducing the deficit, they would not be demanding wasteful tax cuts for corporations and the richest 2% of Americans that explode the deficit.
Cancel sequestration.
As President Obama said during the campaign, across-the-board “sequestration” cuts are going to be canceled; the question going forward is what, if anything, replaces them. There is no need to meet any arbitrary deficit reduction target over the next 10 years, since the economy is still broken, unemployment is not expected to subside to pre-crisis levels in the next decade and much more needs to be done to put America back to work. Cap Contractor Salary Reimbursements.
Almost 10% of each year’s sequestration cuts, or more than $5 billion per year, and $50 billion cumulatively, can be offset simply by capping taxpayer subsidies for contractors at $200,000 per annum. In fact, the Army has officially estimated that the savings would be even greater. Contractor employees who cannot be asked to make the same sacrifices that federal employees have been making for years can still have their lavish salaries; their employers can still supplement their compensation out of corporate profits and pay them whatever they like. (See Capping Taxpayer-Funded Service Contractor Compensation for more details.)
Close loopholes for Wall Street and the richest 2% of Americans.
Any further deficit reduction should come from closing loopholes for Wall Street, drug companies and the richest 2% of Americans, not from budget cuts that threaten the 98% (such as cuts to education and vital services for low-income people). Here are a few examples of loopholes that deserve to be closed: * Close tax loopholes for outsourcing.
A loophole in the tax code allows U.S. corporations to lower their effective income tax rate by sending jobs overseas. Eliminating this tax incentive for outsourcing would raise $583 billion in tax revenue over 10 years. * Close tax loopholes for the richest 2% of Americans.
Any proposal to “close tax loopholes” or limit tax deductions should apply only to the richest 2% of Americans, as President Obama proposed in the recent “fiscal cliff” negotiations, and not to the 98%. * Close tax loopholes for Wall Street.
Tax loopholes allow many U.S. corporations to get away with paying nothing in taxes, and the United States has a lower effective corporate income tax rate than most other developed countries. Reform of the corporate tax code could and should generate hundreds of billions of dollars in tax revenue over the next 10 years. A miniscule tax on financial speculation could generate even larger amounts. * Close loopholes for drug companies.

When Congress enacted the Medicare Part D drug benefit in 2003, it prohibited Medicare from negotiating lower drug prices with drug companies. Closing this loophole could save Medicare more than $200 billion over 10 years. Applying the Medicaid rebate on single-source drugs to Medicare Part D plans would save $156 billion over 10 years.

Federal Pay
Introduction
On December 27, 2012, President Obama signed an Executive Order meant to lift the pay freeze that has been in effect since January 2010. The new Executive Order would adjust the base General Schedule rates by 0.5% on March 28, 2013, and leave locality payments at their current rates. But the Executive Order does not provide the 0.5% raise to federal blue collar wages set under the Federal Wage System. Blue collar pay can rise with the lifting of the freeze, but only if data on prevailing rates in local wage areas supports a raise. However, the lifting of the 27-month pay freeze would allow all federal salaries and wages, including General Schedule (GS), Federal Wage System (FWS), and Title 38 health care professionals at the Department of Veterans’ Affairs to rise through administrative actions for the first time in more than two years.
General Schedule base salaries should be rising by at 1.2% in January 2013, along with increases in locality adjustments. The relevant Employment Cost Index (ECI) measure for January 2013 is the 12-month period ending September 30, 2011, during which time the ECI rose by 1.7%. As the law calls for across-the-board adjustment of the General Schedule base of the ECI measure minus 0.5 percentage points, the amount should be 1.2%. This ECI adjustment is separate from locality adjustments which should supplement this amount. As such, AFGE is calling for 2.7% total pay adjustment for 2013, paid retroactively back to January 1, 2013.
General Schedule Pay and Market Comparability
Under the Federal Employees Pay Comparability Act (FEPCA), federal employees who are paid under the General Schedule are supposed to receive salaries that are roughly 95 percent of “market comparability.” This bipartisan law, enacted in 1990, established the principle that federal pay should be governed by the market, and salaries set at levels just five percent less than those in the private sector and state and local government. FEPCA required that the government produce a measure of market comparability on a regional basis, and provide annual adjustments that simultaneously close any measured gaps and make certain that no existing gap become larger. This was to be accomplished by providing federal employees with annual pay adjustments that had two components: one locality-based gap-closing adjustment, and one nationwide adjustment. The locality adjustments are based on measures of pay gaps that use Bureau of Labor Statistics (BLS) data from surveys that compare, on a job-by-job basis, salaries in the federal government and those in the private sector and state and local government. The nationwide adjustments are based on BLS’s Employment Cost Index, a broad measure of changes in private sector wages and salaries from across all industries and regions (the FEPCA formula is ECI – 0.5 percent).
Had the schedule for closing the pay gaps put forth in FEPCA been followed, comparability would have been realized more than a decade ago in 2002. But in each year since 1995, Congress and successive presidents have found reason to reduce or freeze the size of both the locality and ECI-based adjustments dictated by the law, variously citing economic emergency and deficit-cutting as rationales. The most recent data from BLS show the 2012 average pay gap as 34.6%, compared to 26.3% for 2011, an eight percentage point increase that is due to a combination of more comprehensive data and the fact that federal salaries had been frozen for two years. In spite of the repeated use of alternatives to the terms of FEPCA, there has been strong, consistent and broad bipartisan support for the goal of paying federal salaries that are comparable to those paid by private firms and state and local governments that employ people for the same kinds of jobs. AFGE will work to maintain support for the principle of pay comparability that uses job-by-job salary comparisons for all federal pay systems.
The Two-Year Freeze and Beyond
How did a two-year freeze on the wages and salaries of federal employees – and threats of a third, fourth, and even fifth year -- become our nation’s response to the collapse of the housing bubble, the financial crisis caused by this collapse, the bailout of large banks, insurance companies, and Wall Street firms; and the fact that health care costs will continue to soar in spite of the passage of health care reform? Politicians coalesced around the notion that because so many working class people were experiencing economic hardship as a result of the corrupt practices of banks and Wall Street firms, federal employees should experience hardship as well, and a two-year federal pay freeze was enacted at the close of the 111th Congress. As 2013 dawned, Congress and the President have continued jointly to focus almost exclusively on deficit and debt reduction rather than job creation. And freezing federal pay (and cutting federal retirement benefits) has remained front and center as the first and favorite way for many politicians to cut spending.
Nobel Laureate in Economics and Princeton University Professor Paul Krugman referred to the freeze as “cynical deficit reduction theater” that was “a literally cheap trick that only sounds impressive.” He also confirmed that “federal salaries are, on average, somewhat less than those of private sector workers with equivalent qualifications.” But none of these facts seemed to matter to President Obama or the members of Congress who voted for the freeze and continue to vote for and otherwise endorse extending the freeze by additional months or years. They have been, to some degree, responding to a well-orchestrated campaign by USA Today, the Heritage Foundation, the Cato Institute, and regrettably, the Congressional Budget Office; that use a combination of sophistry and outright lies to make a case that federal employees are overpaid relative to their private sector counterparts.
These anti-federal government and anti-federal employee groups, also sought to create an impression that federal salaries were too high by highlighting the number of federal employees at the highest federal salary level, even though almost all of them are accomplished physicians and scientists working at the National Institutes of Health or the Food and Drug Administration. A tiny few are the top lawyers and auditors at the Federal Deposit Insurance Corporation (which is not financed by taxpayers) and the Securities and Exchange Commission. Nevertheless, screaming headlines about federal “bureaucrats” raking in quarter-of-a-million dollar salaries have had an impact, helping to solidify the false belief that federal employee pay far surpasses the pay of ordinary taxpayers. In fact, about 600,000 federal employees earn less than $50,000 per year, and just under half of all federal employees make under $60,000 per year, according to the most recent data from the Office of Personnel Management (OPM).
The Federal Salary Council (FSC), a statutory body responsible for examining objective data that compares what private sector and state and local government employers pay for the jobs federal employees perform to what the federal government pays, has found consistently that federal employees are underpaid. The Federal Prevailing Rate Advisory Committee (FPRAC), which performs a similar function for the blue collar FWS system, finds the same result. The amounts of underpayment vary by locality and other factors, but the advantage in all places goes to the private sector.
Distorting the Truth on Federal Pay
Since the summer of 2010, USA Today has placed numerous articles on its front page that twist the facts surrounding federal pay to pretend that federal employees are overcompensated. The articles have compared gross averages in the private sector to average salaries of the current federal workforce, manufactured data on the dollar value of private sector fringe benefits and compared it to distorted data on the cost of federal benefits, and sensationalized the fact that a growing number of federal salaries have exceeded $100,000 per year. The Washington Post helped to promote the myth of overpayment by commissioning a poll that asked Americans whether they believed that federal employees were underpaid or overpaid, implicitly giving support to the notion that such issues are a matter of opinion rather than fact. The results of the poll reflected only how well the USA Today misinformation campaign had worked.
To bolster the false impression of federal employee overcompensation even more, the Heritage Foundation’s James Sherk published a deeply flawed econometric study (http://www.heritage.org/research/reports/2010/07/comparing-pay-in-the-federal-government-and-the-private-sector) with a headline-grabbing claim that the government “overtaxes all Americans” by providing federal employee pay and benefits “on the order of 30 percent to 40 percent above similarly skilled private sector workers.” Heritage claimed that federal salaries are “22 percent above private sector workers.” In an odd coincidence, Heritage’s numbers are the mirror opposite of the calculations performed by the economists and pay experts from the Bureau of Labor Statistics (BLS) and the Office of Personnel Management (OPM), whose data for the same year showed federal pay lagging behind the private sector by 22 percent.
Why did Heritage and OPM/BLS come up with opposite numbers? The simple answer is that the Heritage study has highly politicized assumptions, and is based on data that are entirely inappropriate for use in salary comparisons. The BLS and OPM results derive from objective calculations and high quality data from the BLS’s National Compensation Survey (NCS), a survey designed specifically for use by private and public employers to gauge salary rates and differences by occupation and location. Heritage used Current Population Survey (CPS) data from interviews with random individuals who were asked how much they made, how much their employer spent on their benefits, and what their occupation was. Another source of data used by purveyors of the myth of the overpaid federal employee is the Bureau of Economic Analysis (BEA), part of the Commerce Department. The BEA itself warns the public not to use its data for comparing federal and non-federal salaries, noting on its website that “federal compensation estimates include sizable payments for unfunded liabilities that distort comparisons with private-sector compensation. For 2006, for example, the value of these payments for unfunded liability were\ $28.6 billion or 10.7 percent of total federal civilian compensation” (http://www.bea.gov/faq/index.cfm?faq_id=320&start=0&cat_id=0). Further, both these data and Heritage’s are “bounded” at the top and bottom and exclude private salaries lower than $21,544 and higher than $190,119. Thus, even though salary and bonuses for those working in Wall Street securities and financial industries routinely run into the millions, the BEA dataset artificially caps salaries at under $200,000.
CBO Study of Federal vs. Private Sector Pay Compensation
The Congressional Budget Office recently published a report with an extremely misleading title. “Comparing the Compensation of Federal and Private Sector Employees” does not tell us whether federal salaries are too high or too low. It answers the highly peculiar question: If the current federal workforce were replaced with a new one with the same demographic profile as the current one, and the new one were paid average private sector rates for this group’s demographic profile, how much would it cost?
From this question came an answer that was a foregone conclusion. If taken one at a time and categorized by race, gender, education, and other “demographic traits,” of course some of them will appear “overpaid” compared to private sector averages. Why? Because the private sector wage data show large variations by “demographic trait” and for the most part, federal pay systems avoid this kind of discrimination.
The CBO study used what’s called a “human capital model;” basically a “capital asset pricing model” that applies the logic of finance to human beings. Wages, salaries, and benefits are the “price” and the worker is the “asset.” The “asset” has attributes upon which the market places a value, either negative or positive. In such a model, being white, male, highly educated are positive sources of value, while the absence of these attributes means a relatively lower value.
When CBO assessed the accuracy of the “capital asset pricing” of the conglomeration of human capital known as the federal workforce, it was clear that they would find the price too high. This is because, on average, the private sector pays men more than women, whites more than blacks, old more than young, and higher rates in big cities than in rural areas. But the federal government does not reproduce all of these differentials, because in its pay systems, demographic traits are irrelevant. Federal pay is an attribute of the job, not of the demographic traits of the individual holding the job. As a result, men and women with the same federal job are paid roughly the same amount. The demographic traits that comprise a human capital model’s independent variables are completely irrelevant to the salary and benefit package the federal government applies to any given federal job.
Had CBO used the proper method for making the comparison, the one used by the Federal Salary Council, its conclusions would have lined up with the Council’s findings, that federal employees are underpaid whether they are top professionals like doctors or lawyers, technical experts like engineers and scientists, health care providers like VA nursing assistants and dieticians, or administrative workers who handle claims for Social Security or Veterans’ benefits.
The Federal Salary Council is required by law to measure the gap between federal salaries and salaries in the private sector as well as state and local government, together referred to as the “non-federal sector.” On average, the Council’s method finds the nationwide gap between federal and non-federal pay remains about 26 percent in favor of the non-federal sector, but varies by locality. This is largely because the job comparison methodology used by the Council requires finding comparable positions before making pay comparisons, and many jobs found in the federal government are uniquely governmental. Useful pay comparability measures require data from job matches. The Federal Salary Council/BLS/OPM approach actually matches jobs and level of work.
The CBO study is flawed not only because it relies so heavily on “demographic traits”, but also because it uses broad occupational categories and industrial categories as proxies for job matches. And that error compounds the noxious comparison by race, gender, and age. Indeed, the headlines describing the findings of the CBO study emphasized pay differences by education, and the most attention was given to the claim that the federal government allegedly overpays those whose highest level of education is a high school diploma. But consider some of the numerous federal jobs that have similar educational requirements, and are in similar broad industrial categories as those in the private sector, but which do not have nearly the same level of responsibility, or day to day duties or risks.
• A federal Correctional Officer might be compared with someone who works in the broadly defined, private sector “security services industry”: But a “mall cop” does not perform the same function as an officer guarding convicted felons/dangerous inmates in our federal prisons. Same industry, same education, different job.
• A VA Nursing Assistant caring for a wounded warrior suffering a head wound from an IED might be compared with someone who works in a doctor’s office, calling patients to remind them of their appointments. Same industry, same education, different job.
• An electrician working at an Army Depot who builds and repairs sophisticated electronic weaponry might be compared with an apprentice learning how to run wires at a construction site. Same industry, same education, different job.
CBO called its own benefits comparisons “uncertain.” That was an understatement, because not only are their data shaky, as they acknowledge, but their human capital methodology is spectacularly inappropriate for assessing health and retirement benefits. The federal government provides health insurance and retirement benefits to all its employees on the same terms – regardless of education, race, pay system, occupation, or tenure. And a huge part of the alleged benefits gap the CBO calculated derives from the employer cost for the defined benefit pension. As is well known, many of America’s largest and most profitable corporations (such as Wal-Mart) do not provide defined benefit pensions at all. It was inappropriate for CBO to include data from such corporations, as they are not the standard to which the government should be compared. If CBO had restricted its comparison to federal and private sector workers performing similar jobs (e.g. aerospace engineers at NASA compared to aerospace engineers at Boeing), they would have found no gap.
The CBO study on federal pay does a great disservice to those who seek objective analysis on questions related to federal pay and benefits. Except for a brief footnote buried in the middle of the report, the study neglected the work of the Federal Salary Council, which provides an accurate measure of difference between federal and non-federal pay using BLS data and adjusting for the specific characteristics of federal jobs, including the level of work required by the jobs federal employees actually perform. The demographic traits of the federal workforce are irrelevant to the adequacy of their pay, and irrelevant to any measure of pay comparability.
The Federal Salary Council Approach
The Federal Salary Council uses BLS data gathered by trained data collectors who visit businesses and government agencies and record detailed information about the job duties assigned to workers at each salary level and at each location. The dataset used by Heritage asks individuals to identify their occupations by broad industrial categories; e.g., a lawyer would have an occupation called “legal services” as would many others with jobs in that industry. In contrast, the BLS data records, for example, a salary for a “senior attorney with at least ten years of experience in administrative law and litigation in the area of securities law.” The legal profession includes a broad range of salaries, with the majority of lawyers earning modest salaries for providing routine services such as title searches, real estate closings, preparation of simple wills, and representation in small claims court. While many attorneys employed by the government perform similarly routine functions, many more are responsible for complex litigation and regulatory oversight. The data in the National Compensation Survey capture these differences and apply them to the calculation of the gap between federal and private sector pay exactly according to their weight in the overall distribution of federal jobs.
Another difference that explains the opposite results of Heritage and the BLS and OPM is methodological. Heritage uses the “human capital” approach, comparing the pay of individuals on the basis of personal attributes such as age, industry, geographical location, gender, race, ethnicity, educational attainment, occupation and tenure. One appalling result of Heritage’s approach is that he interprets the fact that the federal government is less likely to discriminate against women and minorities in terms of pay as an instance of the government “overpaying” relative to the private sector.
In contrast to Heritage, the BLS and OPM use a method that matches federal jobs with jobs in the private sector that are similar not only in terms of occupation but also that match levels of responsibility, and levels of expertise required. The personal attributes of the job holder are not included in the calculation, only job description, duties, and responsibilities. In this careful analysis, which focuses on the jobs of the actual federal workforce, the universal and consistent finding is that federal employees are underpaid relative to their counterparts in both the private sector and state and local government.
While the human capital approach is a valid way to reveal patterns of discrimination against individuals, it is not appropriate for pay-setting. Unfortunately, it has proved to be extremely valuable for scoring cheap political points, as President Obama’s adoption of the pay freeze idea attests.
Just ten months prior to announcing the two-year freeze, President Obama’s budget explained why the comparisons being hyped in the media and conservative think tanks were misleading. The budget noted that “since 1989 federal and private sector raises have never diverged by more than one percentage point…and the adjustments have offset each other so that the average difference has been only one tenth of one percentage point” over ten years. He went on to describe the profound differences between the federal and private sector workforces, noting that “about 20 percent of federal workers have a master’s degree, professional degree, or doctorate versus only 12 percent in the private sector. A full 51 percent of federal employees have at least a college degree compared to 35 percent in the private sector.” (See the President’s FY 2011 Budget, Chapter 10 “Improving the Federal Workforce” p.99-101).
The gratuitous nature of the freeze was revealed in President Obama’s “belt tightening” justification. He did not pretend to believe the lie that federal employees are overpaid relative to those performing the same type of work in the private sector. In fact, using the macroeconomic model developed by then Obama administration economists Christine Romer and Jared Bernstein to measure the impact of the stimulus, the Center for Economic and Policy Research estimates that the federal pay freeze reduced GDP by 0.007 percent in 2011 and by 0.018 percent in 2012, “implying drops in private sector employment in these years of 7,000 and 18,000 jobs respectively.” (http://www.cepr.net/index.php/blogs/beat-the-press/president-obama-proposes-reducing-private-sector-employment-by-7000-in-2011-and-18000-in-2012.) The pay freeze had no justification other than one single day when many elected Republicans praised President Obama for joining their effort to reduce living standards of America’s working and middle class.
The Supercommittee and the Spending Cut Recommendations of Morgan Stanley Director Erskine Bowles and Former Republican Senator Alan Simpson
The misplaced emphasis on budget reduction in the midst of an extremely weak economic recovery that continues to leave tens of millions of Americans unemployed has conservatives demanding that the federal pay freeze be extended for an additional one to three years. The spectre of an extended pay freeze looms because it was part of the recommendations of both the Budget Control Act of 2011’s Supercommittee and the Simpson-Bowles Commission. In spite of the fact that neither of these bodies achieved the internal majorities necessary to submit their recommendations to the Congress for fast-track consideration, the Simpson-Bowles Commission’s list of preferred spending cuts continues to hold sway over many lawmakers. The anti-federal employee cuts included a three to five year pay freeze as well as cuts to jobs, federal retirement and health insurance benefits.
Politicizing federal pay, and allowing federal salaries to lag further and further behind those paid in the private sector and state and local government for similar jobs will have consequences, and not only for federal employees and their families. Market comparability is the underpinning of federal pay law because recruiting and retaining a high quality federal workforce to care for veterans, conduct scientific testing and research, enforce financial, clean air and water, and workplace safety regulations, protect our borders, and support our troops are all serious undertakings that the government should not attempt to buy on the cheap.
The Federal Wage System: Blue Collar Federal Pay
In October 2010, the Federal Prevailing Rate Advisory Committee (FPRAC) voted to end the practice of treating blue collar and white collar federal employees differently with regard to the drawing of local labor market boundaries. The effect of the FPRAC-supported regulation would be to limit each non-Rest of U.S. General Schedule (GS) locality to one Federal Wage System(FWS) local wage area. The new policy awaits approval by the OPM Director who must submit it for public review as a proposed regulation before final adoption. The administration has cited the pay freeze as an explanation for the long delay in approval of the regulation; the lifting of the freeze will eliminate this justification, and we look forward to its publication.
Unifying FWS and GS Locality Boundaries Brings the FWS into the 21st Century
One important argument in favor of unifying FWS local wage areas and GS localities is that it modernizes the prevailing rate system’s recognition of what constitutes a local labor market. Chapter 53 of Title 5 directs OPM to maintain “a continuing program of maintenance and improvement designed to keep the prevailing rate system fully abreast of changing conditions, practices, and techniques both in and out of the Government of the United States.” When the prevailing rate system’s current local wage area boundary-drawing criteria were established 50 years ago, the white collar pay system did not yet vary salaries on the basis of local labor markets. The boundaries were drawn around federal facilities that employed large numbers of blue collar federal employees. Many of those federal blue collar jobs and facilities no longer exist, but the separate facility-based wage areas do still exist. These old wage areas also reflect a time before the expansion of metropolitan areas and the establishment of new highways and public transit systems.
In addition, the enactment of FEPCA in 1990 led to the establishment of modern criteria for defining the local labor markets, putting an emphasis on commuting data from the decennial census. These data are widely used by employers in both the public and private sectors to define local labor markets. In contrast, the FWS continues to draw boundaries on the basis of custom, tradition, and often out-of-date information on concentrations of blue collar workers in the private and federal sectors. It is time for FPRAC to recognize that the commuting patterns recognized by the GS system are the most relevant factors for local labor market definitions.
Congress Already Treats FWS and GS Equally for Purposes of Annual Pay Adjustments
Prior to the freeze, the Congress had voted in each of the last eight years to treat the federal government’s blue and white collar employees the same with regard to annual locality pay adjustments. Recognizing that all FWS employees within a given GS locality deserve to be treated as if they worked in the same local labor market, the Congress has directed federal agencies to provide the same annual percentage pay adjustment to all blue collar workers within a given GS locality. Congress has recognized that this is an important element of the internal equity that it wants federal pay systems to maintain. Indeed, almost all federal agencies with non-GS pay systems that grant locality differentials have voluntarily adopted the GS locality boundary definitions for non-GS employees, including the Transportation Security Administration’s PASS system, the repealed National Security Personnel System (NSPS), and numerous others. The administration’s silence on blue collar pay in its Executive Order lifting the freeze is not a deviation from support for parity between FWS and other pay systems; rather, the law governing federal blue collar pay does not give the president alternative pay adjustment authority as it does for other pay systems.
Maintaining Different Local Labor Market Boundaries for Blue and White Collar Workers is Inequitable
Treating blue collar workers as if they are in one local labor market for purposes of annual pay adjustments and as if they are in a different local labor market for purposes of setting underlying base pay is inconsistent and inequitable. It violates basic standards of fairness. The policy makes an invidious distinction among federal employees in pay-setting. Blue collar workers are treated differently from white collar workers for reasons entirely unrelated to the work that they do. It is not and should not be acceptable to treat workers of different races or genders or ages who work in the same location as if they were in different local labor markets; likewise, it should not be acceptable for any employer, and especially not the federal government, to make this distinction on the basis of blue collar vs. white collar work.
Disparate Treatment Creates Internal Conflict at the Workplace
Continuation of the current practice of treating different federal employees in the same federal workplace as if they work in different localities creates massive inequities and disunity. For example, the Tobyhanna Army Depot is located in the New York City GS locality and the Scranton FWS locality. The resulting pay inequities are extremely troubling and indefensible. At Tobyhanna, WG-11 Electronics Mechanics and Production Machinery Mechanics are responsible for highly complex electronics weapons manufacture, repair, modification, configuration, installation, and testing. They are responsible for equipment and machinery that is worth hundreds of millions of dollars and directly affects the progress of war and the well-being of warfighters. The skilled tradesmen and women who perform these jobs work directly with GS personnel, side-by-side, day after day. The blue collar annual pay ranges from $44,928 to $52,416. In the same building at the same time, GS-9 Process Improvements Specialists earn between $53,500 and $69,545 and GS-7 Secretaries earn between $43,738 and $56,863 with a career ladder that makes them eligible for GS-8 salaries of between $48,439 and $62,966. No one is questioning the appropriateness of the Federal Salary Council’s designation of Tobyhanna within the New York City commuting area; it is a well-established observable fact, as described by census data. What is questioned is pretending that the blue collar workers at Tobyhanna work in a different location than the white collar workers there.
Unifying FWS and GS Locality Boundaries Is Not New, Just Overdue
In 2008, the Federal Prevailing Rate Advisory Committee (FPRAC) undertook a comprehensive examination of the criteria for defining FWS wage areas. At that time, numerous updates were adopted, including the requirement that wage area boundaries would not split Metropolitan Statistical Areas (MSAs) as defined by the Office of Management and Budget (OMB). The unification of MSAs was justified on the basis of a recognition that the FWS wage areas reflected outdated notions about how far workers in the skilled trades would commute to jobs. Census data that are used to define MSAs proved that commuting patterns in large metropolitan areas that include urban cores, suburbs, and “exurbs,” are similar for workers in all occupations. The next step was to unify the FWS and GS locality boundaries, since the latter are determined by a combination of MSA definitions, commuting patterns, and concentrations of federal employment. However, the Bush administration would not allow the unification of FWS and GS boundaries to go forward, and that is why this element of the modernization of FWS boundary criteria remains to be addressed.
Conclusion
The federal pay system played no role in the creation of the economic crisis that required massive government spending to resolve. Federal employees did not cause the housing bubble either to inflate or to burst. Federal employees did not engage in speculative investments in derivatives of mortgage securities. Federal employees did not mislead investors, did not outsource jobs to China or Mexico, and did not destroy the financial system. Freezing federal pay has been a cynical ploy to appease those who oppose the missions of almost every executive branch agency and program. Federal employees deserve better than the role of pawn in the war against government.

Federal Employees Health Benefits Program The Federal Employees Health Benefits Program (FEHBP), which covers more than eight million federal employees, retirees, and their dependents, is the nation’s largest employer-sponsored health insurance program. FEHBP was affected by the Patient Protection and Affordable Care Act, otherwise known as Obamacare. FEHBP is also a target of those who would force federal employees to forfeit their earned benefits to finance deficit reduction. The President’s failed deficit commission, led by Morgan Stanley Director Erskine Bowles and former Republican Senator Alan Simpson recommended dismantling FEHBP and turning it into a voucher program. During the 112th Congress, the House of Representatives passed Budget Committee Chairman Paul Ryan’s (R-WI) plan to apply the Bowles-Simpson FEHBP voucherization idea to Medicare. AFGE strongly opposes dismantling either FEHBP or Medicare by replacing the current premium-sharing financing formula with vouchers. Federal Employees Need an Advisory Council for the FEHBP Program
Federal employees and retirees pay at least 25% and as much as 55% of the premiums for health insurance under the Federal Employee Health Benefits Program (FEHBP). Yet in spite of this heavy financial obligation and the fact that FEHBP is the sole source of health insurance for many of its eight million participants, there is no formal mechanism for enrollees to have any input into any aspect of the program. FEHBP enrollees rely upon the Office of Personnel Management (OPM) to negotiate contracts, set policy, and to decide what, if any, benefits beyond those specified in statute will be included or excluded. And they are forced to rely upon OPM to provide information, almost always after the fact, of what it has decided to do with this program. There is no formal mechanism for sharing of information prior to decision making. There is no formal mechanism for having federal employees’ questions about FEHBP answered by OPM staff. In short, after paying, in the aggregate, 30% of the program’s cost, there is no formal mechanism or opportunity for federal employees to have any involvement in its administration.
Federal employees have opportunity for input into administrative decisions involving the General Schedule pay system with the Federal Salary Council (FSC), a Presidentially-appointed advisory council required by law. The FSC includes outside experts in pay as well as representatives of the largest federal unions. Federal employees have an opportunity for input into administrative decisions involving the Federal Wage System with the Federal Prevailing Rate Advisory Committee (FPRAC), an advisory council whose director is appointed by the Director of OPM and whose members include both management and labor representatives. And federal employees have the Employee Thrift Advisory Council (ETAC) which gives federal and postal employees and retirees and members of the uniformed services, all of whom participate in the Thrift Savings Plan (TSP) a chance to have input into administrative decisions involving the program. All of these bodies are established in statute, and all function well as avenues for dialogue and exchange of information, concerns, and advice. FEHBP would benefit greatly from the establishment of a similar statutorily required employee advisory council. AFGE will be seeking a sponsor for legislation to establish such an advisory committee. Coverage of Applied Behavioral Therapy for Autism in FEHBP After years of pressure from AFGE and organizations representing the families of those with autism spectrum disorders, OPM finally agreed to allow FEHBP plans to cover the most widely used and most effective treatment for autism, Applied Behavior Analysis (ABA). Thirty-seven states require health insurance plans operating in their state to cover autism treatments and interventions. OPM’s action still falls far short of this standard, because it only permits and does not require FEHBP plans to cover treatments such as ABA. Nevertheless, starting in January 2013, 67 of FEHBP’s 230 participating plans offered ABA. In 19 states, coverage will be offered in some regions. All state-specific plans in Arkansas, Minnesota, and New Mexico will provide the coverage. Neither of the largest FEHBP plans, Blue Cross/Blue Shield Standard Option or Basic Option, will cover ABA in 2013. These nationwide plans cover 63% of all FEHBP participants, and the regional plans that cover ABA do not begin to include the remaining 37%. Thus, if OPM is at all serious about providing coverage for the most effective and widely used intervention for autism, it must require plans to cover ABA. AFGE will continue to press OPM to require this coverage in every FEHBP plan. Spending Less on Prescription Drugs to Lower Overall FEHBP Costs Representative Steven Lynch (D-MA) is expected to reintroduce his legislation from the 112th Congress, the FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act. The bill is meant to lower FEHBP’s prescription drug costs by putting restrictions on the activities of “pharmacy benefit managers” or PBMs, the entities that negotiate with drug manufacturers and supply prescription drug benefits to health insurance plans of all types. The legislation prohibits PBMs from switching a person’s prescription without prior approval from the prescribing doctor (currently PBMs do so if switching to a different drug is more profitable for them). It would also require a PBM to return to insurance plans almost all rebates and incentive payments they receive from manufacturers, and creates disclosure requirements for information about such rebates and incentive payments. The Obama administration has taken a less ambitious path. It seeks to save $1.6 billion over ten years by gaining authority for OPM to contract directly with one PBM that would serve all FEHBP plans, on the theory that the combined buying power of FEHBP’s eight million lives can be leveraged for significant prescription drug discounts. It is not clear whether this strategy would lead to the adoption of a formulary (i.e. a list of covered drugs) that may leave out a particular drug or brand of drug that a patient wants or needs. It is also not clear that OPM would be successful in choosing a PBM that would provide the best prices. There is an almost inevitable trade-off between the restrictiveness of the formulary and the overall cost of the prescription drug benefit. Further, some FEHBP plans such as Blue Cross/Blue Shield can argue that they have more buying power than OPM, as they cover more than eight million when their non-federal customers are counted. At this stage, OPM must still obtain from Congress the legal authority to negotiate directly with a PBM, and the agency is studying how to move forward. AFGE is supportive of OPM’s initial efforts, and will monitor the effort to ensure that it succeeds in lowering costs without problematic restrictions on the formulary. Obamacare and FEHBP The enactment of Obamacare in 2010 has not yet solved all of our nation’s problems associated with health care cost and insurance coverage, as 50 million Americans remain uninsured and we still spend almost twice as much per capita as other advanced industrialized countries with nationalized health care. This is true despite the fact that almost half of all American health care spending is funded by the US government through Medicare and Medicaid which are not drivers of cost. The country’s problems with prices and coverage derive from the other “half” of health care spending, the portion controlled by private insurers and pharmaceutical companies and where policies and rates are set by the private sector rather than government regulation. The phase-in of benefits from Obamacare began in 2011 with extension of coverage to dependents up to age 26, no copayments for preventive care, and smoking cessation benefits, again without charging any copayments. Several other provisions of Obamacare affect federal employees and retirees who participate in FEHBP. Three will have a direct cost impact. The most promising is the rule on medical loss ratio limitations. Insurers have to spend at least 80 percent of premiums on medical care or functions that improve the quality of care. For those covered by large group policies, insurers must spend an even higher amount -- 85 percent. Insurers who fail to meet this standard must provide policyholders with a rebate instead of pocketing the extra premiums as profit. Those covered by Medicare and an FEHBP plan pay nothing for one annual well patient visit to a doctor, and can request a personalized illness prevention plan at no cost. Medicare beneficiaries are also able to get immunizations and screenings for cancer and diabetes without any copayments. Those who participate in Medicare Part D are eligible for a 50 percent discount on brand-name drugs and a seven percent discount on generic drugs if the plan has a coverage gap (also known as a “donut hole”). These discounts will increase each year until the donut hole is completely eliminated by 2020. Beginning in 2018, the income-based government subsidies for individuals to purchase health insurance from state-run “exchanges” will become available. Unfortunately, tens of thousands of federal employees will qualify for these subsidies because their incomes are so low. The numbers of federal employees eligible for subsidized purchase through the exchange will be larger than originally anticipated because of the two-and-a-half year pay freeze. The subsidies will be calculated partially to limit the share of family income paid out in premiums, and partially on the basis of family size. 2014 will also see the introduction of rules to prevent insurance companies from discriminating against those with a pre-existing or existing health problem. In addition, insurance companies will be prohibited from placing lifetime limits on the amount they will pay for benefits for a patient (the law raises the limit and eventually eliminates it). Restrictions on insurance companies’ ability to cancel coverage when an enrollee falls ill also come into effect in 2014. However, Obamacare also includes a time bomb provision, set to go off in 2018, that is likely to be very damaging to federal employees. The most punitive will be the 40 percent excise tax on “high cost” or “Cadillac” plans that will make FEHBP far less affordable for many federal employees and retirees than it already is. Most disturbing is the fact that this tax will fall on many FEHBP plans whose high costs are not at all a reflection of a rich benefit package. In fact, the highest cost plans in FEHBP are not those with the most comprehensive benefits. The highest cost plans are those that exploit FEHBP’s structural weaknesses by encouraging those with the highest health risks to congregate, and thus their costs reflect the risk group rather than the actuarial value of the benefits offered. Additionally, many FEHBP plans become high cost because of their political power and the Office of Personnel Management’s long history of exempting them from cost accounting standards, and acceding to their demands for large annual premium increases. FEHBP contracts are fixed price re-determinable type contracts with retrospective price redetermination. This means that even as the insurance companies receive only a fixed amount per contract year per “covered life”, they are allowed to track their costs internally until the end of the year. The following year, they can claim these costs and recoup any amount they say exceeded their projections from the previous year. They are guaranteed a minimum, fixed profit each year regardless of their performance or the amount of claims they pay. The cost “estimates” on which they base their premium demands are a combination of what they report as the prior year experience plus projections for the coming year plus their minimum guaranteed profit. Clearly, there is no ability for federal employees to alter the “high cost” of these plans. It is in the FEHBP’s insurance companies’ interests to keep costs and profits high, and benefits low. And to subject the result of this inefficient system, one that propels FEHBP premiums ever-upward without regard to affordability or without any meaningful expansion of benefits to a “Cadillac” tax just adds insult to injury. The excise tax is a heavily regressive tax on federal workers, especially those whose incomes are too high to be eligible for the exchange subsidies but are too low to afford employee premiums in excess of $3,000 per year. While the 40 percent tax is levied on the insurance company and is paid on incremental costs over $10,200 for individuals and $27,500 for families, there are already FEHBP HMOs whose rates already meet the 2018 thresholds.
The 2011 Deficit Commission’s Proposal to Dismantle FEHBP
The recommendations of the co-chairs of the President’s National Commission on Fiscal Responsibility called for “transforming the Federal Employees Health Benefits Program (FEHBP) into a defined contribution premium support plan that offers federal employees a fixed subsidy that grows by no more than GDP plus 1 percent each year.” Although the commission failed to achieve the supermajority vote necessary to send its recommendations to Congress for fast track consideration, the recommendations remain alive in current attempts to reduce the deficit on the backs of federal employees.
The voucher plan would change FEHBP by having the government provide a fixed amount of cash each year that employees could use to buy insurance on their own, instead of paying a percentage of average premiums charged by the insurance companies, as is currently the case. Under the existing statutory system, if premiums go up by 10 percent, the government’s contribution goes up by around 10 percent. The FEHBP financing formula requires the government to pay 72 percent of the weighted average premium, but no more than 75 percent of any given plan’s premium. Under the Commission proposal, the government’s “defined contribution” or voucher would go up by an amount totally unrelated to the rise in premiums. For example, between 2011 and 2013, FEHBP premiums went up by an average of 3.5 percent (3.4% for 2013), and so did the government’s contribution. If the voucher proposal would have been in effect, the government’s “contribution” or voucher would have gone up by GDP + 1%. The annual growth rate of GDP in 2011 is estimated to have been 2% (through the third quarter, the most recently available data). Adding an additional percentage point to that and the voucher would have risen by 3%, not enough to cover the average rise in premiums.
This proposal originated in a Heritage Foundation “backgrounder,” published in 2001 which criticizes FEHBP’s “artificial restrictions on plan options, including less expensive plans” and recommends getting rid of all legally “mandated benefits,” removing the 75 percent cap on the government’s contribution to a plan, and allowing rollovers of any unspent funds. To make matters worse, Heritage recommended allowing plans selling to federal employees to charge different premiums to different individuals, based upon age or health risk. Differential premiums combined with the voucher approach would spell disaster for federal employees, no matter what their age or health status.
Why did co-chairmen Bowles and Simpson propose this drastic change? The proposal was presented as a “pilot program” in health care vouchering. The co-chairs planned to use federal employees as guinea pigs to see what happens if you de-link the government’s financing of health care from actual health care costs. If they liked what happened to federal employees under the voucher plan, they said they would advocate extending the same approach for Medicare. Following the description of turning FEHBP into a voucher, they say many on the commission wanted to “offer seniors a fixed subsidy, adjusted by geographic area and by individual health risk to purchase health coverage from competing insurers.” They went on to say that “if this type of premium support model successfully holds down costs without hindering quality of care in FEHBP,” they would apply it to Medicare.
House Budget Committee Chairman Paul Ryan (R-WI) and the House Republicans who voted for his budget did not wait for the FEHBP pilot, and voted to voucherize Medicare. Of course, the voucher plan only holds down costs for the government, shifting the burden to federal workers or the elderly. Clearly the objective is to reduce government spending and impoverish workers.
Conclusion
In the midst of a two-and-a-half year pay freeze, federal employees’ health insurance contributions have grown by more than thirteen percent. The cost to employees of participating in FEHBP continues to rise by more than either the general rate of inflation or the rate of growth of their ability to pay (i.e. cola growth for retirees or pay adjustment rates). While the consumer protections included in Obamacare have allowed all Americans to enjoy some of the positive elements of the FEHBP, federal employees’ main benefit has been the extension of coverage to dependents up to age 26. AFGE supports OPM’s initial efforts to lower FEHBP’s prescription drug prices, but will closely monitor any impact on the formulary. Finally, AFGE will seek to protect federal employees from the new taxes Obamacare will impose starting in 2018, because it would punish enrollees for the failure of OPM to negotiate premiums that are a fair reflection of the benefits contained in FEHBP’s plans.
The establishment of an FEHBP Advisory Council, similar to the FSC, FPRAC, or ETAC, would allow representatives of federal employees the opportunity to voice their many concerns about the adequacy of the program to OPM, the federal agency with the responsibility of administering the program fairly.

Official Time for Federal Employee Union Representatives

Introduction
As part of a systematic attack on working and middle class Americans, some Members of Congress have advocated cutting the salaries and benefits of federal employees. Federal workers are the individuals who keep the government functioning through times of political crisis or deadlock. They are the people who get the Social Security checks out on time, ensure a safe food supply, go after those who pollute our water and air, and care for our wounded veterans, but they and other federal employees have been unfairly painted as the cause of our country’s economic troubles.
Standing in the way of those who would drastically cut back on the pay, health insurance and retirement benefits of these federal employees are the democratically-elected unions that represent these patriotic public servants. Those who would dismantle vital government programs know that they must silence federal workers’ voices in order to achieve their goals. It is not fiscal conservatism that motivates this attempt to prevent effective union representation by attacking the use of official time by employees. Use of reasonable amounts of official time has been supported by government officials of both political parties for some 50 years.

Current Legislative Situation

In January, Representative Phil Gingrey (R-GA) introduced H.R. 107, which would eliminate official time for all elected federal employee union representatives throughout the government. In the last Congress, he filed floor amendments to the Continuing Resolution and the Defense Authorization bill but chose not to offer them. In fact, the only time he formally offered his anti-official time amendment, to the FAA Authorization bill on March 31, 2011, it was soundly rejected by the House of Representatives by a vote of 195-227. Over forty Republicans voted against the Gingrey amendment to the FAA bill. In addition, Rep. Gingrey was granted a hearing June 1st before the House Oversight and Government Reform Subcommittee on the Federal Workforce, but the committee did not bring up the bill for consideration in any markups during 2011 or 2012.

Policy Background

By law, federal employee unions are required to provide representation for all employees in units that have elected union representation, even for those who choose not to pay dues. Federal employee unions are also forbidden from collecting any fairshare payments or fees from non-members for the services which the union must provide.

In exchange for the legal obligation to provide the same services to those who pay as well as those who choose not to pay, the Civil Service Reform Act of 1978 allowed federal employee unions to bargain with agencies over official time. Under this law, federal employees who serve as union representatives are permitted to use official time to engage in negotiations and perform representational activities while on duty status.

Legally permitted representational activities are limited to:

* Creating fair promotion procedures that require that selections be based on merit, so as to allow employees to advance their careers * Establishing flexible work hours that enhance agencies’ service to the public while allowing employees some control over their schedules * Setting procedures that protect employees from on-the-job hazards, such as those arising from working with dangerous chemicals and munitions * Enforcing protections from unlawful discrimination in employment. * Developing systems to allow workers to perform their duties from alternative sites, thus increasing the effectiveness and efficiency of government, and relieving traffic congestion in metropolitan areas * Participating in improvement of work processes * Providing workers with a voice in determining their working conditions

The law provides that the amount of time that may be used is limited to that which the labor organization and employing agency agree is reasonable, necessary, and in the public interest. As pointed out in a Congressional Research Service report, “(a)ny activities performed by an employee relating to the internal business of the labor organization must be performed while in a non-duty status.”

Activities which may not be conducted on official time include:

* solicitation of membership * internal union meetings * elections of officers * any partisan political activities
To ensure its continued reasonable and judicious use, all federal agencies track basic information on official time, and submit it annually to the Office of Personnel Management (OPM), which then compiles a government-wide report on the amount of official time used by agencies. From FY 2006 through FY 2010, the use of official time government-wide ranged from an average of 2.58 to 2.69 hours per bargaining unit employee per year. Between FY 2009 and FY 2010, official time remained constant at 2.58 hours.
Official Time Makes the Government More Efficient and More Effective
Through official time, union representatives are able to work together with federal managers to use their time, talent, and resources to make our government even better. Gains in quality, productivity, and efficiency--year after year, in department after department--simply would not have been possible without the reasonable and sound use of official time.

Private industry has known for years that a healthy and effective relationship between labor and management improves customer service and is often the key to survival in a competitive market. The same is true in the federal government. No effort to improve governmental performance--whether it's called reinvention, restructuring, or reorganizing--will thrive in the long haul if labor and management maintain an adversarial relationship. In an era of downsizing and tight budgets, it is essential for management and labor to develop a stable and productive working relationship.

Union representatives and managers have used official time to transform the labormanagement relationship from an adversarial stand-off into a robust alliance. And that just makes sense. If workers and managers are really communicating, workplace problems that would otherwise escalate into costly litigation can be dealt with promptly and more informally.

Official time under labor-management partnerships or forums is used to bring closure to workplace disputes between the agency and an employee or group of employees. Those disputes would otherwise be funneled to more expensive, more formal procedures – the agency’s own administrative grievance procedures, EEOC complaints, appeals to the Merit Systems Protection Board, and federal court litigation.

Healthier LaborManagement Relations in the Federal Government Also Produce Cost Savings in Reduced Administrative Expenses

Union representatives use official time for joint labor-management activities that address operational mission-enabling issues in the agencies. Official time allows activities such as designing and delivering joint training of employees on work-related subjects; and introduction of new programs and work methods that are initiated by the agency or by the union. As examples, such changes may be technical training of health care providers in the Department of Veterans Affairs; or, introduction of data-driven food inspection in the Food Safety and Inspection Service.

Union officials use official time for routine and unusual problem-solving of emergent and chronic workplace issues. For example, union representatives use official time when they participate in agency health and safety programs operated under the Occupational Safety and Health Administration (OSHA). Such programs emphasize the importance of effective safety and health management systems in the prevention and control of workplace injuries and illnesses.

Official time is also used by union representatives participating in programs such as LEAN and Six Sigma, labor-management collaborative efforts which focus on improving quality of products as well as procedural efficiencies. Recently, union representatives have participated on official time by working with the Department of Defense to complete a department-wide performance management and recognition system and accelerate and improve hiring practices within the department.

Conclusion

Official time under the Federal Service Labor-Management Relations Statute is a longstanding, necessary tool that gives agencies and their employees the means to expeditiously and effectively utilize employee input into mission-related challenges of the agency, as well as to bring closure to conflicts that arise in all workplaces. It has enjoyed bipartisan support for decades. Overseen by the agencies themselves on a day-to-day basis and by OPM in an aggregated way, official time is used as provided by law, and only for the purposes specified in statute.

AFGE strongly opposes any legislative effort to erode or eliminate the ability of elected union representatives to use official time to represent both dues and nondues paying members of collective bargaining units in federal departments and agencies.

Arbitrary Cuts in Civil Servants
Overview

Congressional Republicans introduced many bills in the previous Congress specifically to impose arbitrary reductions in the number of civil servants. Only one of those bills was marked up, and it was not considered on the floor. However, an arbitrary downsizing amendment inspired by one of those bills was approved by the Senate and enacted pursuant to the FY13 National Defense Authorization Act. We should expect more proposals for arbitrary cuts to be considered by the Congress in 2013. Moreover, as a result of political brinksmanship over the debt ceiling, the dereliction of the regular appropriations process, and the irrational dictates of sequestration, we should expect agencies to try to impose arbitrary cuts in spending on civil servants.

Congress’ Arbitrary Downsizing Schemes

Many supporters of downsizing bills claim to draw inspiration from a recommendation made by the co-chairs of the Bowles-Simpson Deficit Commission that the civil service be arbitrarily reduced by 200,000 federal employees, or 10%, by 2015. Of course, the commission co-chairs also recommended reducing the number of contractors outside the Department of Defense (DoD) by 250,000 and doubling the reductions in contractors made by DoD as part of its “Efficiency Initiative”. However, only one of the civil service downsizing bills introduced in the 112th Congress would have also imposed arbitrary reductions in the number of service contractors, and this one exceptional bill would have done so only because of the unexpected inclusion of a last-minute amendment offered at mark up.

All of the civil service downsizing bills in the previous Congress were completely arbitrary. No workload analysis was conducted to determine why the number of federal civil servants should have been reduced by the amounts required. Similarly, none of the bills made the tough decisions of identifying services that agencies should downsize or eliminate after significant numbers of civil servants have been eliminated. Instead, the bills’ supporters assumed, with an almost infantile simplicity, that nothing else would change.

Supporters of these bills couldn’t even explain why arbitrary reductions in civil servants were necessary. The civil service workforce should be managed by budgets and workloads: if there is work to be done and money to pay for that work, then managers should not be prevented from using civil servants. Supporters of these arbitrary downsizing bills have, as noted earlier, chosen not to reduce workload (i.e., identify services that should be downsized or eliminated). However, the austere budget environment will likely result in severe budget cuts in all federal agencies over the next decade, which will inevitably lead to reductions in the number of civil servants.

Before We Cut, Let’s Remember That Civil Servants Are Fewer and Cheaper Than Contractors

The federal government’s overall workforce likely consists mostly of more expensive contractors. For example, the size of the DoD service contractor workforce is unknown, but we do know it is immense. As the leaders of the House Armed Services Committee declared last year, the Department now spends a greater portion of its budget purchasing services than it does purchasing weapons systems, hardware, and other products. In fact, the Department spends more on contracted services than it does on pay for military and civilian personnel combined.

Not only are there probably more contractors than civil servants, but contractors cost significantly more than civil servants. The Project on Government Oversight (POGO), which compared the cost of federal employees and contractors in a seminal 2011 study—Bad Business: Billions of Taxpayer Dollars Wasted on Hiring Contractors—determined that “on average, contractors charge the government almost twice as much as the annual compensation of comparable federal employees. Of the 35 types of jobs that POGO looked at in its new report—the first report to compare contractor billing rates to the salaries and benefits of federal workers—it was cheaper to hire federal workers in all but just 2 cases.”

Contractors wield extraordinary influence, which explains how the federal government’s overreliance on expensive contractors has grown so drastically over the last twenty years, the adverse impact on taxpayers notwithstanding. It also explains the popularity with certain lawmakers of arbitrary downsizing legislation—because it would promote even more privatization.

H.R. 3029: Less Than Meets the Eye

As noted earlier, one arbitrary downsizing bill would have also ostensibly required cuts in service contracting. At the House Committee on Oversight and Government Reform’s mark up of the 112th Congress’ of H.R. 3029, a bill that would have reduced the size of the civil service by 10%, an amendment was unexpectedly accepted that would have required that spending on service contracts be reduced by a comparable amount.

However, this amendment was widely seen as unenforceable—perhaps that is why it was accepted. The costs of civil servants can be identified and controlled in the budget process. We know how many civil servants there are, how much they cost, what they do, and how well they perform. However, because of the absence of an inventory of service contracts that is integrated into the budget process, the costs of service contractors cannot be similarly identified and controlled.

As Senate Armed Services Committee Chairman Carl Levin (D-MI) observed in 2010: “In the past, we’ve found that proposed cuts to contract services are nearly impossible to enforce because expenditures for service contracting are invisible in the department’s budget. For this reason, Section 806 of the National Defense Authorization Act for Fiscal Year 2008 required that budget justification documents clearly and separately identify the amounts requested in each budget account for procurement of services. The department has not yet complied with that requirement.” And as leaders of the House Armed Services Committee noted in 2012, “A credible inventory that is fully integrated into the budget submission is necessary to identify and control contract costs, particularly in this time of fiscal constraints…Continued failure to comply would lead, in our view to a failure of fiduciary duty and resource stewardship.”1

The Administration has failed to compile the contractor inventories, let alone integrate them into the budget process. As noted above, DoD is not in compliance, and the non-DoD agencies are even further behind. There is bipartisan and bicameral agreement that spending on contractors cannot be identified and controlled. Yet, this has no discernible impact on advocates for arbitrarily cutting the civil servants, even though they know such cuts would inevitably lead to more privatization.

Arbitrary Cuts for DoD Civilian Employees

The Senate’s version of the FY13 NDAA included arbitrary 5% cuts in funding for the DoD civilian and service contract workforce through 2017, based on anticipated reductions in spending on military personnel. An effort led by Senator Ben Cardin (D-MD) to strike the provision on the floor failed, and the arbitrary cuts were included in the resulting conference report. This provision was based on a bill (S. 2065) introduced earlier in the previous Congress that would have arbitrarily reduced the civil service by 5% and then used the savings to partially offset future mandatory cuts in defense spending.

Reductions in the civil service should be based on workload analysis, i.e., identifying the functions that should no longer be performed by the Department and then dismissing the relevant personnel. Arbitrary cuts are contrary to law and common sense. DoD has three distinct workforces—military, civilian, and contractor—each with a unique mission. Just because one workforce is being cut by a certain amount doesn’t necessarily mean that the other workforces should also be cut by the same amount, as the Administration had pointed out repeatedly.

For example, the White House had earlier criticized the arbitrary cut because it “require(d) savings in the civilian and service contractor workforces in excess of $5 billion over planned savings through FY 2017. The Administration believes the size of the civilian workforce should be determined based on workload and funding, not on arbitrary comparisons to the military. To comply with this legislation, the Department would need to significantly divest workload and impose workforce caps.”

It is inevitable that DoD’s three workforces will be reduced. In fact, according to the House Armed Services Committee, in 2012, military personnel are being reduced by 31,000 and civilian personnel are being reduced by 11,000. Yet, contractor personnel are being increased by 18,000. However, it is imperative that cuts in civilian personnel be imposed intelligently and courageously. Telling DoD to do the same with less, without regard to mission and performance, is neither intelligent nor courageous. In 2011, the House and the Senate significantly bolstered longstanding laws that forbade arbitrary constraints and cuts to the civilian workforce. In 2012, just one year later, that measured and thoughtful approach was abandoned in favor of mindless civil servant-bashing.

In order to get this provision through committee markup and off the Senate floor, proponents claimed that language excepting certain functions would reduce the impact of the cuts on the civilian workforce to 18,000 positions. However, in conference, behind closed doors, in classic bait-and-switch fashion, the language governing those exceptions was changed from mandatory to discretionary, so that the hit can be the full 5%--or approximately 36,000 positions.

It is said that contractors are taking the same cut as civilian personnel. Wrong. As Chairman pointed out in 2011 report language, “Over the last decade, DoD spending for service contract services has more than doubled, from $72.0 billion in fiscal year 2000 to more than $150.0 billion (not including spending for overseas contingency operations), while the size of the Department’s civilian workforce has remained essentially unchanged.” Given that most of this explosive growth in service contracting was intended to be short-term, there is no question that DoD’s contractors should bear a higher percentage of cuts. And, as noted earlier, DoD, as well as the other agencies, lack inventories of service contracts that are integrated into the budget process, so there is no capability to impose and actually impose such arbitrary cuts.

Agencies’ Arbitrary Downsizing Efforts

Budgetary uncertainty—i.e., political brinksmanship over the debt ceiling, the dereliction of the regular appropriations process, and, worst of all, the irrational dictates of sequestration—is likely to cause agencies to impose arbitrary cuts in spending on civil servants.

Under the Budget Control Act, agencies will be forced to impose significant and arbitrary across-the-board reductions in spending, a process known as sequestration. As a result of a last minute budget revision to that law enacted late last year, $85 billion in cuts in all federal agencies will have to be made if Congress does not agree to change the law by March 1.

So far, the guidance issued by the Office of Management and Budget and DoD to comply with sequestration is one-sided in sparing contractors from having to make the same sacrifices as will be made as federal employees. Moreover, this guidance fails to deter against direct conversions, i.e., when agencies give work performed by civil servants to service contractors without first conducting the statutorily required cost comparison process, even as it makes those direct conversions more likely.

Hiring freezes, firing of temporary and term employees, incentives for federal personnel to retire, and extensive furloughs of in-house staff, options endorsed by the Administration in guidance, constitute big hits on the civil service. These are actual cuts. In contrast, service contractors emerge relatively unscathed, subjected only to vague and unspecified contingent cuts. Agencies are merely directed to review “contracts to determine where cost savings may be achieved in a manner that is consistent with the applicable terms and conditions, remaining mindful of the manner in which individual contracts advance the core mission of the agency…”

On what grounds can such disparate treatment be justified? To balance the hiring freeze, why aren’t OMB and DoD directing agencies to freeze new service contracts, exercises of contract options, and approvals of contract modifications? To balance firing temporary and term employees, why aren’t OMB and DoD directing agencies to terminate contracts where penalties associated with contract cancellations are lower than the costs of continuing to pay balances? How in terms of basic principles of fairness and workforce management can this guidance pass any reasonable laugh test? Clearly, such guidance should be revised or supplemented to ensure that cheaper and more flexible federal employees are not just making their own sacrifices but also the sacrifices that the Administration cannot be bothered to ask contractors to make.

For almost four years, AFGE has asked the Administration to issue guidance to ensure compliance with longstanding prohibitions against direct conversions. Although various OMB officials have acknowledged that such guidance would be consistent with the law and Administration policy and is necessary to protect taxpayers and federal employees from arbitrary outsourcing, that guidance has still not been issued.

The Administration’s one-sided sequestration guidance dramatically increases the likelihood of direct conversions: firing federal temporary and term employees, incentivizing federal retirement, and freezing federal hiring. But what will happen to the workload that is now or would have been performed by those federal employees? It’s safe to say that very little of it is going away. And if not, won’t this work simply be arbitrarily and illegally shifted to contractors? The Administration has legal and moral obligations to deter, detect, and reverse direct conversions. It is imperative that the Administration issue sequestration guidance that emphasizes compliance with prohibitions against direct conversions.

Sourcing: Complying with the Law
Summary:

1. EXTEND THE GOVERNMENT-WIDE SUSPENSION AGAINST STARTING UP ANY NEW OMB CIRCULAR A-76 STUDIES: Extend the suspension on the use of the OMB Circular A-76 privatization process until much-needed reforms have been implemented and functions performed by contractors, including commercial functions, are finally being targeted for insourcing. The Office of Management and Budget (OMB), by its own admission, has made no reforms to an A-76 process it acknowledges to be flawed. Schemes to repeal the A-76 suspensions were almost entirely unsuccessful in 2012, but contractors and their Congressional cronies will no doubt be back again in 2013.

2. ENFORCE PROHIBITIONS AGAINST DIRECT CONVERSIONS: Consistent with the law, no work last performed by federal employees should be contracted out without first conducting a full and fair public-private competition. The Department of Defense (DoD), the largest department in the federal government, acknowledging that the risk of direct conversions increases significantly during downsizing, issued guidance to ensure compliance with the law. OMB has committed to producing comparable guidance for the non-DoD agencies, but when will it ever be issued?

3. INSIST THAT INHERENTLY GOVERNMENTAL / CLOSELY ASSOCIATED WITH INHERENTLY GOVERNMENTAL / CRITICAL WORK BE PERFORMED BY FEDERAL EMPLOYEES: Ensure that functions that are “inherently governmental,” “closely associated with inherently governmental functions,” or “critical” are performed by federal employees—and insource such work if it has been wrongly contracted out. After substantial delay, OMB issued its proposed definition of inherently governmental, which resulted in little change from the unsatisfactory status quo. Contractors have sought to narrow the definition of “closely associated with inherently governmental functions” in DoD. Nevertheless, significant numbers of contractors are performing work that is so sensitive and important that it should always be performed by federal employees, either because agencies aren’t reviewing contracts or are unable to replace contractors with federal employees because of arbitrary bureaucratic obstacles.

4. THROUGH INSOURCING, REQUIRE AGENCIES TO GIVE FEDERAL EMPLOYEES OPPORTUNITIES TO PERFORM NEW AND OUTSOURCED WORK: Consistent with the law, agencies should insource functions that were contracted out without competition or are being poorly performed. Significant savings are possible from insourcing. An independent group determined that contractors are generally twice as costly as federal employees. DoD claims significant savings through insourcing. However, that effort was shut down when DoD imposed a cap on the size of its civilian workforce, but not its contractor workforce. And OMB is late, almost four years late, in issuing guidance that would allow agencies to regularly and systematically insource functions for cost reasons.

5. COMPILE SERVICE CONTRACT INVENTORIES: Consistent with the law, agencies should compile inventories of their service contracts so that we know, among other things, how much contractors cost, how many employees are performing each contract, and how well they are performing. It is imperative that agencies be able to identify and control contractor costs to the same extent that they can federal employee costs if downsizing is not to disproportionately and adversely impact the smaller and less costly civil service. After overcoming OMB opposition, DoD has made progress, and, reportedly, is two years away from integrating its contractor inventory into its budget process. However, GAO reports that non-DoD agencies are far behind, principally because OMB allows agencies not to collect from contractors important cost information required by law. Over-optimistically, OMB says agencies are four years away from compliance.

6. DRASTICALLY REDUCE THE CAP FOR TAXPAYER REIMBURSEMENT OF CONTRACTORS: OMB insists on extending a two-year freeze on the pay of federal employees who, among other things, nurse our veterans and patrol our borders. With respect to contractors, however, OMB can only call for capping at $200,000 the taxpayer-subsidized compensation of each contractor’s five most lavishly rewarded employees, while allowing thousands of contractors to charge taxpayers for $763,000 per employee, costing taxpayers tens of billions of dollars. Despite opposition from contractors and their cronies in the executive and the legislative branches, the Senate has attempted to drastically reduce the cap for both DoD contractors ($230,000) and non-DoD contractors ($400,000). The cap on DoD contractors was discarded by conferees to the FY13 National Defense Authorization Act.

1. EXTEND THE GOVERNMENT-WIDE SUSPENSION AGAINST STARTING UP ANY NEW OMB CIRCULAR A-76 STUDIES

The prohibition first included in the FY09 Financial Services Appropriations Bill that would prevent new A-76 reviews from being launched by any federal agency remains in effect—and, for several very sound reasons, according to the Government Accountability Office (GAO) and the DoD Inspector General (IG).

The OMB Circular A-76 process can’t show savings: Even after years and years of costly and disruptive privatization studies across the federal government, GAO reported in 2008 that supporters of the OMB Circular A-76 could not demonstrate any savings:

“We have previously reported that other federal agencies—the Department of Defense (DoD) and the Department of Agriculture’s (USDA) Forest Service, in particular—did not develop comprehensive estimates for the costs associated with competitive sourcing. This report identifies similar issues at the Department of Labor (DoL). Without a better system to assess performance and comprehensively track all the costs associated with competitive sourcing, DoL cannot reliably assess whether competitive sourcing truly provides the best deal for the taxpayer…”1

The OMB Circular A-76 process is also severely flawed: According to GAO and the DoD IG, the A-76 privatization process a. Failed to keep track of costs and savings,
DoD IG: “DoD had not effectively implemented a system to track and assess the cost of the performance of functions under the competitive sourcing program…The overall costs and the estimated savings of the competitive sourcing program may be either overstated or understated. In addition, legislators and Government officials were not receiving reliable information to determine the costs and benefits of the competitive sourcing program and whether it is achieving the desired objectives and outcomes…2 GAO: “[The Department of Labor’s (DoL)] savings reports…exclude many of the costs associated with competitive sourcing and are unreliable…(O)ur analysis shows that these costs can be substantial and that excluding them overstates savings achieved by competitive sourcing…DoL competition savings reports are unreliable and do not provide an accurate measure of competitive sourcing savings…Finally, the cost baseline used by DoL to estimate savings was inaccurate and misrepresented savings in some cases, such as when preexisting, budgeted personnel vacancies increased the savings attributed to completed competitions...3

b. Resulted in the actual costs of conducting the privatization studies exceeding the guesstimated savings, and

GAO: “For fiscal years 2004 through 2006, we found that the Forest Service lacked sufficiently complete and reliable cost data to…accurately report competitive sourcing savings to Congress…(W)e found that the Forest Service did not consider certain substantial costs in its savings calculations, and thus Congress may not have an accurate measure of the savings produced by the Forest Service’s competitive sourcing competitions…Some of the costs the Forest Service did not include in the calculations substantially reduce or even exceed the savings reported to Congress.”4

c. Included fundamental biases against the in-house workforce.

DoD IG: “…In this OMB Circular A-76 public/private competition—even though (DoD) fully complied with OMB and DoD guidance on the use of the overhead factor—the use of the 12 percent (in-house) overhead factor affected the results of the cost comparison and (DoD) managers were not empowered to make a sound and justifiable business decision…In the competitive sourcing process, all significant in-house costs are researched, identified, and supported except for overhead. There is absolutely no data to support 12 percent as a realistic cost rate. As a result, multimillion-dollar decisions are based, in part, on a factor not supported by data…Unless DoD develops a supportable rate or an alternative method to calculate a fair and reasonable rate, the results of future competitions will be questionable…”5

Until the implementation of the reforms listed below, AFGE strongly believes that this temporary suspension on new A-76 reviews should be continued:

a. The establishment of a reliable system to track costs and savings from the A-76 process that has been implemented, tested, and determined to be accurate and reliable, over the long-term as well as the short-term.

b. Consistent with the law, the establishment of contractor inventories so that agencies can track specific contracts as well as contracts generally.

c. Consistent with the law, the development and implementation of plans to actively insource new and outsourced work, particularly functions that are closely associated with inherently governmental functions, that were contracted out without competition, and are being poorly performed.

d. Consistent with the law, the enforcement of government-wide prohibitions against direct conversions.

e. The development and implementation of a formal internal reengineering process that could be used instead of the costly and controversial A-76 process.

f. Revision of the rules governing the A-76 process to make it more consistent with agencies’ missions, more accountable to taxpayers, and more fair to federal employees.

i. Increase the minimum cost differential to finally take into account the often significant costs of conducting A-76 studies, including preliminary planning costs, consultants costs, costs of federal employees diverted from their actual jobs to work on privatization studies, transition costs, post-competition review costs, and proportional costs for agencies’ privatization bureaucracies (both in-house and out-house).6

ii. Double the minimum cost differential for studies that last longer than 24 months—from the beginning of preliminary planning until the award decision.7

iii. Eliminate the arbitrary 12% overhead charge on in-house bids.8

BOTTOM LINE: The existing suspensions on the use of the OMB Circular A-76 privatization process should remain in place until the circular has been fixed; direct conversions have actually been stopped; reliable systems for tracking and controlling service contractor costs have been implemented, including completion of contractor inventories; and insourcing can occur as easily as outsourcing always has been.

2. ENFORCE PROHIBITIONS AGAINST DIRECT CONVERSIONS
Despite the extensive use of the OMB Circular A-76 privatization process (and the resulting proof of the superiority of in-house workforces—federal employees won 80% of the time during the Bush Administration, despite a process that independent observers insisted is biased against them), much work is still contracted out without any public-private competition, i.e., without any proof that giving work to contractors is better for taxpayers or better serves those Americans who depend on the federal government for important services.

The Congress, on a bipartisan basis, has, repeatedly, prohibited agencies from perpetrating “direct conversions”—the term used to describe instances in which agencies give work performed by federal employees to contractors without first conducting full cost comparisons. This prohibition has applied regardless of the number of positions involved.

In December 2011, DoD, the largest department in the federal government, issued guidance to its managers to guard against direct conversions. This guidance was not issued to protect federal employees, but because of concern “that the Department not become overly reliant on contracted services.” As downsizing goes forward, DoD’s guidance warns that “we must be particularly vigilant to prevent the inappropriate conversion of work to contract.” The DoD guidance protects bargaining unit work from illegal privatization because it covers positions, not jobs. Therefore, according to DoD, positions need not be occupied and current federal employees need not be adversely affected in order for management to defy the prohibition.
Given the budgetary situation, other agencies are experiencing significant downsizing, regardless of what happens with sequestration. Nevertheless, OMB has still been unable to issue guidance “to prevent the inappropriate conversion of work to contract” in non-DoD agencies. OMB acknowledges that guidance is a good idea, that agencies may be perpetrating direct conversions in the absence of that guidance, and that such guidance is easily written.
The Army’s Service Contract Approval Form (SCAF) would constitute an excellent framework for government-wide guidance. With a comprehensive but concise series of checklists, the SCAF promotes compliance with sourcing laws—from prohibitions against direct conversions to insourcing to contractor inventories to inherently governmental and closely associated with inherently governmental functions.
BOTTOM LINE: Either OMB should issue guidance to enforce statutory prohibitions against direct conversions, or it should be required to do so by the Congress. Direct conversions are not just illegal, they undermine the interests of taxpayers and all Americans who depend on agencies for reliable and efficient service. And the danger of direct conversions increases dramatically during downsizing, particularly when cuts in funding or workforce are imposed arbitrarily, e.g., sequestration. DoD has already issued such guidance, and the Army has followed up with a comprehensive checklist—both of which should be adapted by OMB for the non-DoD agencies. 3. INSIST THAT INHERENTLY GOVERNMENTAL / CLOSELY ASSOCIATED WITH INHERENTLY GOVERNMENTAL / CRITICAL WORK BE PERFORMED BY FEDERAL EMPLOYEES

The FY09 National Defense Authorization Act required OMB to develop a single government-wide definition of “inherently governmental” because of concern that inherently governmental, closely associated with inherently governmental, and critical functions are illegally or inappropriately being performed by contractors. In contracting out such work, according to GAO, agency officials don’t even bother to subject those contractors to extra surveillance, let alone look for opportunities to bring it back in-house.9

Unfortunately, OMB dropped the ball. After much delay, OMB finally released its proposal in September 2011. Most people were underwhelmed—except contractors, who were delighted that OMB’s proposal largely reinforced the unsatisfactory status quo. Instead of following the direction of Congress and providing guidance for agencies to ensure that only federal employees perform important government work, OMB released a vague and meandering tome on the necessary character and duties of the acquisition workforce in administering contracts. While the guidance does give a nod to the service contract inventory and review requirement as well as the insourcing statute, it considers insourcing as a last resort in the case of inherently governmental functions.
The guidance disingenuously requires agencies to consider the impact of decisions to establish personnel or budgetary ceilings and “take appropriate action if there is a shortfall,” even though many personnel ceilings are imposed by OMB itself through the budget approval process. A major failing of the OMB guidance is that it allows critical functions that should be performed by federal employees to continue to be performed by contractors if agencies are limited by personnel ceilings. In fact, DoD, which has self-imposed a cap on the size of its civilian workforce is prevented from correcting illegal outsourcing of inherently governmental functions. Both the Army and the Air Force reported to GAO that they can’t insource even inherently governmental functions because of arbitrary personnel constraints, while the Navy does not even review its contracts to determine if they include inherently governmental functions.i And non-DoD agencies told GAO that they couldn’t grow their in-house workforces no matter how much work they illegally or inappropriately outsourced.ii

If not ultimately included in the Federal Acquisition Regulation, the guidance is not likely to be followed by acquisition personnel. Of course, the real problem with respect to work which should be performed by federal employees because it is inherently governmental, “closely associated”, or critical is enforcement. OMB’s guidance, as inadequate and uninspiring as it is, has been issued, but when will OMB establish a date certain by which all inherently governmental work currently performed by contractors must be insourced? And when will OMB establish a date certain by which all contracts that include closely associated with inherently governmental and critical functions must be reviewed for divestment, correction, or insourcing? Why issue the guidance if OMB will not insist that it actually be enforced?
BOTTOM LINE: OMB’s guidance constitutes little improvement on the existing definition of functions too important or sensitive to outsource. However, the real problem is the lack of enforcement. To ensure public control over public functions, agencies must inventory all of their service contracts, review those contracts to determine whether they include either inherently governmental functions illegally or closely associated with inherently governmental or critical functions inappropriately, and then insource where required by law or performance—without regard to personnel ceilings on in-house workforces.

4. THROUGH INSOURCING, REQUIRE AGENCIES TO GIVE FEDERAL EMPLOYEES OPPORTUNITIES TO PERFORM NEW AND OUTSOURCED WORK

All agencies are now required to develop insourcing policies for new work and outsourced work, in particular outsourced work that is inherently governmental and wrongly contracted out, work contracted out without competition and presumably more expensive than it should be, and work contracted out that is poorly performed. Nevertheless, insourcing, particularly in non-DoD agencies, is proceeding slowly. In fact, OMB has failed to issue guidance that would allow agencies to use insourcing to save money for the taxpayers by bringing in-house functions solely for cost reasons.

Given the results of the 2011 study by the Project on Government Oversight (POGO), which compared the costs of federal employees and contractors, taxpayers may well wonder why the Obama Administration would want to shield from scrutiny the army of contractors who are responsible for so much documented waste, fraud, and abuse. According to POGO’s study—Bad Business: Billions of Taxpayer Dollars Wasted on Hiring Contractors—“on average, contractors charge the government almost twice as much as the annual compensation of comparable federal employees. Of the 35 types of jobs that POGO looked at in its new report—the first report to compare contractor billing rates to the salaries and benefits of federal workers—it was cheaper to hire federal workers in all but just 2 cases.”
We know that insourcing works—albeit for the brief time it was faithfully undertaken by DoD. According to GAO, DoD officials reported that the Department saved $900 million through insourcing in fiscal year 2010. As the Department patiently explained to GAO: “Insourcing has been, and continues to be, a very effective tool for the Department to rebalance the workforce, realign inherently governmental and other critical work to government performance (from contract support), and in many instances to generate resource efficiencies." iii

However, it was not until Senator Claire McCaskill’s (D-MO) March Contracting Oversight Subcommittee hearing that it became clear just how successful insourcing had been. The Army, which had conducted the most robust insourcing effort in DoD, reported savings from between 16 and 30 percent. More significantly, “During the much smaller period from Fiscal Year 2008 to 2010 when the Department instituted an active insourcing program in conjunction with its service contract pre-award approval process and contractor inventory review process, contract service obligations not identified to Overseas Contingency Operations funding decreased from $51 billion in Fiscal Year 2008 to $36 billion in Fiscal Year 2010.” The increase in civilian personnel costs from insourcing was slight in comparison with the steep reduction in service contract costs.

However, insourcing has been essentially shut down by DoD because of the imposition of a cap which prevents the civilian workforce from being larger than it was in 2010. Now, insourcing can only occur if proposals are signed off on by senior officials after going through a daunting and cumbersome approval process. DoD imposed no comparable size constraint on the contractor workforce and required no additional authorization before entering into new contracts or expending on existing contracts.

Little insourcing for cost reasons is occurring in non-DoD agencies. OMB committed to AFGE and Senator McCaskill that it would issue guidance to promote cost-based insourcing by last July. Given that OMB has said that this guidance is merely the first installment, and more likely to be thoughts and ruminations, rather than a full-blown costing methodology, there is no reason why it should not be issued sooner rather than later. The administrative and statutory frameworks governing the outsourcing process took years to be developed. Not every contingency nor every challenge associated with insourcing can be anticipated. Let OMB establish broad guidelines for cost-based insourcing, so that agencies can begin to systematically look for possibilities to insource, as the authors of the law intended, and then improve upon and expand upon that initial guidance as agencies gain valuable experience.

From AFGE’s discussions with agencies, it is clear that managers are waiting for OMB’s endorsement before they insource. Although agencies understand that the savings from insourcing are significant, so are the controversies from taking on contractors. It’s been more than three and one-half years since the insourcing law for agencies other than DoD was enacted. Surely, that’s a long enough interval before the issuance of an initial guidance. Moreover, OMB should make it clear that this guidance explicitly allows agencies to take on additional staff to perform insourced work and that contractors not be rewarded in any cost comparison process for providing health care and retirement benefits less generous than that of the federal government.

BOTTOM LINE: Insourcing saves money and ensures public control over important and sensitive functions. That is no longer subject to dispute. DoD needs to re-start its insourcing program. It makes no sense for DoD to limit the size of the civilian workforce if that means paying contractors more to perform functions that civilians could perform more efficiently. OMB needs to finally start cost-based insourcing in the non-DoD agencies by issuing guidance. In an austere budget environment, no agency can afford to leave billions of dollars in the pockets of contractors that, thanks to insourcing, might be better directed towards urgent programs or deficit reduction.

5. COMPILE CONTRACTOR INVENTORIES

Because the federal government’s service contract workforce is larger and more expensive than its civil service workforce, any effort to achieve savings in how agencies provide services necessarily requires subjecting service contractors to severe scrutiny. In order to allow for such scrutiny, a law was enacted in 2009 that required non-DoD agencies to develop inventories of service contracts, which copied a 2007 law that required DoD to establish an inventory of service contracts.
Senate Armed Services Committee Chairman Carl Levin (D-MI) was the first to identify compliance with the inventory requirement and integration into the budget process as necessary if downsizing is to be done intelligently: “In the past, we’ve found that proposed cuts to contract services are nearly impossible to enforce because expenditures for service contracting are invisible in the department’s budget.” As House Armed Services Committee Chairman Buck McKeon (R-CA) and Ranking Member Adam Smith (D-WA) noted, sagely, “A credible inventory that is fully integrated into the budget submission is necessary to identify and control contract costs, particularly in this time of fiscal constraints.”

After years and years of delays caused by contractors and their cronies in the executive branch, DoD is moving forward with its inventory. Throughout most of 2012, OMB blocked progress by insisting that the inventory imposed onerous paperwork burdens on DoD’s service contractors. Thanks to Congressional pressure and DoD’s determination, the Department finally prevailed, issuing guidance in November that emphatically required contractors to routinely provide information needed to complete the inventory for their contracts. DoD now estimates that it will finally be compliant with the inventory in two years.

In DoD, the “manpower” experts have an investment in the completion of the inventory because they are responsible for developing and coordinating policy for the Department’s entire workforce of military, civilian, and contractor personnel. In the non-DoD agencies, there is no influential constituency pressuring from within to complete the inventories, even though it is understood that they would more than pay for themselves by identifying excessively costly contracts.

During downsizing, it is especially important that all agencies be able to identify and control their service contract costs. Failure to do so will incentivize agencies to impose disproportionate cuts on in-house workforces, particularly during downsizing, because their costs can actually be identified and controlled.

Nevertheless, non-DoD agencies regard the contractor inventories as box-checking exercises, rather than tools that can help them to budget and manage more efficiently. Most agencies rarely review contracts aggressively to identify those that cost too much or include illegal or inappropriate functions. OMB has allowed agencies to submit non-standardized information and not required them to collect vital cost data from contractors. Officially, OMB reports that agencies are four years away from compliance, but that estimate minimizes how much work non-DoD agencies need to perform.

BOTTOM LINE: Congress should continue to pressure DoD to finish its inventory of service contracts and then integrate it into the budget process so that service contracting costs can be identified and controlled as easily as civilian personnel costs already are. Congress should require that OMB ensure that agencies collect all required information from contractors and use their inventories in order to reduce the costs of service contracting so that in-house workforces aren’t forced to make disproportionate sacrifices during downsizing.

6. DRASTICALLY REDUCE THE CAP FOR TAXPAYER REIMBURSEMENT OF CONTRACTORS

OMB insists on extending a two-year freeze on the pay of federal employees who, among other things, nurse our veterans and patrol our borders. With respect to the costliest contractor employees, however, OMB gave them a 10% raise during 2012, raising the annual limit on taxpayer subsidies to $763,029. In fact, since 1998, the compensation cap on government contracts has more than doubled; and over the past dozen years, the increase in allowable government compensation to contractors has outpaced inflation by 53 percent.
Estimates obtained from senior DoD personnel indicate that capping allowable reimbursement of compensation to $200,000 per employee in all agencies would result in savings of at least $5 billion a year,iv almost 10 percent of the entire $55 billion reduction in 2013 required by the Budget Control Act. A senior Army official testified the savings would be even higher.v

Contrary to what some contractors claim, excessive compensation levels are not required to find and retain a talented workforce. David Wineland, an employee of the Commerce Department’s National Institute of Standards and Technology, recently won the Nobel Prize for physics for his work to improve atomic clocks, a technology that underlies everything from smart phones to GPS mapping. Many other Nobel Laureates work at government labs earning well below $200,000 a year. And contractors are not prohibited from paying their employees whatever they like out of their companies’ profits.

Thanks to Senator Barbara Boxer (D-CA), the cap on contractor compensation has been imposed at $763,029 annually for all DoD contractors, except for those in certain specialized professions. That figure can increase, however, every time OMB updates the formula. The situation is even worse in the non-DoD agencies where only the top five most lavishly compensated contractor employees at each firm are capped at $763,029 per annum, with other contractor employees eligible to receive even more generous compensation from the taxpayers.

The Senate has proposed significant reforms. Senator Joe Manchin (D-WV) included a provision in the Senate’s FY13 National Defense Authorization Act that would cap annual contractor compensation at $230,000 for all DoD contractors except for certain specialized professions. Chairman Richard Durbin (D-IL) included in the Senate’s version of the FY13 Financial Services Appropriations Bill a cap of $400,000 for all non-DoD contractors with the exception for certain specialized professions. Comparable House legislation included no reforms, and House leadership prevented lawmakers from offering floor amendments that would have included similar annual limits on contractor compensation. Worse, OMB and DoD strongly opposed both the Manchin and Durbin reforms. The Manchin provision was discarded in favor of a report requirement.

BOTTOM LINE: Congress should limit all service contractor employees—with only the narrowest and most thoroughly justified exceptions—to no more than $230,000 annually in taxpayer-subsidized compensation. _____________________________________

1 Government Accountability Office, Department of Labor: Better Cost Assessments and Departmentwide Performance Tracking Are Needed to Manage Competitive Sourcing Program (GAO-09-14).

2 Department of Defense Inspector General, DoD Reporting System for the Competitive Sourcing Program (D-2006-028).

3 Government Accountability Office, Department of Labor: Better Cost Assessments and Departmentwide Performance Tracking Are Needed to Manage Competitive Sourcing Program (GAO-09-14).

4 Government Accountability Office, Forest Service: Better Planning, Guidance, and Data are Needed to Improve Management (GAO-08-195).

5 Department of Defense Inspector General, Public/Private Competition for the Defense Finance and Accounting Service Military Retired and Annuitant Pay Functions (D-2003-056).

6 It is accepted in the A-76 circular that it makes little sense to shift work back and forth without at least a guesstimate that savings will be more than negligible. “The conversion differential precludes conversions based on marginal estimated savings…” Unfortunately, the conversion differential--the lesser of 10% of agency labor costs or $10 M, which is added to the non-incumbent provider—captures only “non-quantifiable costs related to a conversion, such as disruption and decreased productivity”. See OMB Circular A-76, Attachment B.

7 The biggest selling point for the revised A-76 circular was that standard privatization studies were supposed to last no longer than a year. Of course, OMB insists that a standard competition has not started until it has been formally announced, even though preliminary planning, the work conducted on an A-76 study before formal announcement, can last several years. Even excluding preliminary planning A-76 studies now routinely take longer 12 months. In fact, OMB reports that the average A-76 study takes 13.6 months to complete. COMPETITIVE SOURCING: Report on Competitive Sourcing Results Fiscal Year 2007, May 2008, p. 9. Worse, the length is gradually increasing over time. In other words, the more the A-76 process is being used, the longer it is taking. The A-76 circular is based on standard competitions lasting no longer than a year except in unusual circumstances. Clearly, the conversion differential should be increased to take into account the growing length of A-76 studies.

8 All in-house bids are slapped with an overhead charge, which works out to 12% of personnel costs. This significant impediment to in-house bids should be eliminated. As the Department of Defense Inspector General reported about the now infamous A-76 privatization review at the Defense Finance and Accounting Service, “We do not agree that the standard factor for overhead costs is a fair estimate for calculating overhead. We believe that DoD must develop a supportable rate or alternative methodologies that permit activities to compute reasonable overhead cost estimates.” “Public-Private Competition for the Defense Finance and Accounting Service Military Retired and Annuitant Pay Functions”, Report D-2003-056 (March 2003). Neither reform has been undertaken. Consequently, most if not all in-house bids are unfairly biased against federal employees.

9 Government Accountability Office, DEPARTMENT OF HOMELAND SECURITY: Risk Assessment and Enhanced Oversight Needed to Manage Reliance on Contractors, GAO-08-142T. Government Accountability Office, DEFENSE ACQUISITIONS: Further Actions Needed to Address Weaknesses in DoD Management of Professional and Management Support Contracts, GAO-10-39.

________________________________________________________________

I Government Accountability Office, DEFENSE ACQUISITIONS: Further Actions Needed to Improve Accountability for DoD’s Inventory of Contracted Services, GAO-12-357.

ii Government Accountability Office, Civilian Agencies Service Contract Inventories, GAO-11-538R.

iii Government Accountability Office, Defense Workforce: DOD Needs to Better Oversee In-sourcing Data and Align In-sourcing Efforts with Strategic Workforce Plans, GAO-12-319.

iv 98 Fed. Contracts Rep. 320, September 10, 2012.

vJay Aronowitz, Deputy Assistant Secretary of the Army (Force Management, Manpower and Resources) submitted the following response to a Senate request: If a $400K/Full Time Equivalent (FTE) Rate Cap was applied to the Fiscal Year (FY) 2011 Army Inventory of Contract Services, labor costs reported in the Contractor Manpower Reporting Application (CMRA) for FY 2011 would be reduced by $6B (approximately 15% of the $41B in invoices reported in FY 2011 for contract services). Post-Hearing Questions for the Record Submitted to Jay Aronowitz, Deputy Assistant Secretary, Force Management, Manpower and Resources U.S. Department of Army from Senator McCaskill, “Contractors: How Much Are They Costing the Government?” March 29, 2012, p. 3.

Capping Taxpayer-Funded Service Contractor Compensation

Federal Employee Sacrifices So Far

Federal employees have made substantial sacrifices over the past two years. Since 2011, budget savings derived from reduced compensation to the federal workforce has totaled at least $103 billion (over $50,000 per employee), as measured over the ten year budget window. This figure includes:

2-year pay freeze & 2013 raise of 0.5% delayed to April $88 billion

2.3% increase in employees’ retirement contributions for post 2012-hires (part of UI extension in February) which scores as a tax increase on middle class $15 billion

Total $103 billion

Enough is enough. It’s time for Congress to reduce federal spending by finally requiring service contractors to make sacrifices.

Defense contractors can charge taxpayers annually up to $763,029 for the compensation of a single employee. However, in non-DoD agencies, only the five most highly compensated employees at each contractor are held to this cap. Other contractor employees can be - and are - frequently reimbursed by taxpayers for more than $763,000. Since 1998, the compensation cap on government contracts has more than doubled. Over the past dozen years, the increase in allowable government compensation to contractors has outpaced inflation by 53%. In 2012, contractors received a 10% raise. Under the generous formula set in statute, which is based on exorbitant compensation for private sector business executives, contractors will likely receive a comparable raise in 2013.

Although acknowledging that there are no credible examples of agencies that would be unable to secure necessary services with a more taxpayer-friendly cap, the Office of Management and Budget as well as leading Congressional Republicans and Democrats have aggressively fought bipartisan efforts by Senators Barbara Boxer (D-CA), Charles Grassley (R-IA), Joe Manchin (D-WV), Richard Durbin (D-IL), as well as Representative Paul Tonko (D-NY), to end this expensive and wasteful corporate welfare.

Senators Boxer and Grassley introduced legislation (S. 2198) in the 112th Congress that would have capped compensation for contractors at $400,000 annually. Both Senators led an earlier effort that ultimately led to the current cap on defense contractors in the FY12 National Defense Authorization Act (NDAA).

Senator Manchin included a provision in the Senate version of the FY13 NDAA that would have capped annual taxpayer subsidies for defense contractors at $230,000. However, that provision was gutted in conference, requiring only that a study be conducted.

Senator Durbin included a provision in his mark up of the FY13 Financial Services Appropriations Bill that would have capped contracted compensation at $400,000 per annum. However, for unrelated reasons, the measure was not enacted.

Representative Tonko introduced his own bill (H.R. 2980) in the previous Congress to cap contractor compensation at $200,000 annually. He also attempted to offer amendments to lower the cap for defense contractors on the floor to both the FY13 NDAA as well as the FY13 Defense Appropriations Bill, only for the House Republican leadership to mysteriously refuse to make such amendments in order so that the Tonko amendments could be voted on.

The Commander-in-Chief of the United States earns $400,000 a year. The Secretary of Defense earns $200,000 to manage a military workforce of 1.4 million and a civilian workforce of 771,000 personnel. Congressional lawmakers receive $174,000 a year to authorize and appropriate for the Department. And starting pay is under $20,000 a year for an enlisted soldier who is prepared to put her life on the line for her country. If contractor bosses want to provide themselves and their employees with exorbitant compensation, let them pay for it with their own money.

Lavish compensation is not required to find and retain a talented workforce. David Wineland, an employee of the Commerce Department’s National Institute of Standards and Technology (NIST), recently won the Nobel Prize for physics for his work to improve atomic clocks, a technology that underlies everything from smart phones to GPS mapping. Many other Nobel Laureates work at government labs earning well below $200,000 a year. Rather than charge taxpayers excessive amounts for contractor compensation, agencies would be much better served insourcing the work and having it employed by reliable and affordable federal employees.

Informed estimates indicate that capping allowable reimbursement of compensation at $200,000 per employee would result in savings of at least $5 billion a year, almost 10 percent of the entire $55 billion reduction in 2013 required by the Budget Control Act. A senior Army official testified the savings would be even higher.

At the same time, rank-and-file federal employees have had their pay frozen for more than two years—with only the prospect of a 0.5% pay increase this year. At a time when federal employees are making such immense sacrifices and the federal government’s budget is so constrained, it defies belief that Congress chose not to ask the richest contractors to finally make modest sacrifices.

In fact, some lawmakers go out of their way to punish federal employees for their modest salaries while allowing contractors to raid the Treasury for their own compensation. In the 112th Congress, Representative Mike Fitzpatrick (R-PA) authored a bill (H.R. 6726) to eliminate the pay increase for Members of Congress and the 0.5% pay increase for federal employees in 2013 which passed the House of Representatives shortly after Christmas. At press time, a bill (H.R. 273) introduced by Representative Ron DeSantis (R-FL) was expected to be considered soon by the House specifically to kill the belated pay raise for federal employees.

Ultimately, what is happening is very easy to understand. One modestly paid federal workforce of nurses, food inspectors, and correctional officers is scheduled to receive in late March 2013 a mere 0.5% pay increase after a two-year freeze. Another federal workforce where many employees routinely make hundreds of thousands of dollars per year received a 10% raise last year and will likely receive a comparable raise again next year. Both workforces are paid for by American taxpayers. What’s the difference? Some House Republicans want to eliminate the 0.5% pay increase for the workforce made up of working and middle class federal employees, but do nothing about the double-digit raises being given to an exclusive group of employees in America’s top 1% of income.

Transportation Security Administration (TSA) and
Transportation Security Officers (TSOs)

A Historic Year for TSO Rights
In 2012 Transportation Security Officers took significant legislative, bargaining and administrative steps to full workplace rights. Less than one year after winning the largest organizing effort in the past 70 years of U.S. labor history, AFGE’s TSO members ratified the first contract with TSA. In June AFGE’s Office of General Counsel achieved an important arbitration decision in which a panel of renowned labor experts held that the results of arbitration under the agreement between AFGE and TSA would be final and binding. During 2012, President Obama signed into law two bills applying statutory protections to TSOs: the Whistleblower Protection Enhancement Act, a law extending statutory federal worker whistleblower protections to TSOs and providing for Merit Systems Protection Board (MSPB) review of prohibited personnel practice violations; and a bill applying the Uniformed Services Employment and Reemployment Rights Act to TSA. Each of these victories was the result of years of activism by tens of thousands of TSOs, AFGE members and other union brothers and sisters in the halls of Congress and courts of law and with two Presidential administrations. The work of AFGE and our TSA members is not completed until the nation’s 45,000 TSOs have the same rights, protections and opportunities as all other workers in the Department of Homeland Security (DHS). In the words of Frederick Douglas, “People might not get all that they work for in the world, but they must certainly work for all that they get.”
Title 5 Rights
AFGE’s victory in negotiating with TSA to a historic first contract under the 2011 Administrative directive granting limited collective bargaining, representation and appeal rights to TSOs nonetheless retained an unsustainable, separate and unequal personnel system for 45,000 federal employees. Despite the 2011 Directive, TSOs are limited in areas subject to collective bargaining, access to the MSPB to appeal adverse actions, application of long-accepted worker protection laws such as the Family Medical Leave Act, the Fair Labor Standards Act, and Office of Personnel Management (OPM) pay and leave guidelines. Application of Title 5 rights and protections to workers has done nothing to preclude the ability of other agencies at DHS to carry out their important duties of protecting the U.S. public and those agencies are not subject to the consistently low scores TSOs give TSA on employee morale and worker satisfaction surveys.
TSOs provide the last and best line of defense against those who seek to harm the flying public despite the difficulties caused by the flawed, parallel TSA personnel system. AFGE will work for legislation that repeals the Aviation and Transportation Security Act footnote setting TSOs apart from other workers at TSA and demands that TSA’s tenure as an outlier federal agency come to an end. TSA must follow the same laws, regulations, and guidance regarding its workforce as other agencies in DHS. Absent such action by Congress, AFGE calls upon President Obama to use his executive authority to apply Title 5 rights and protections to TSOs.
Attempts to Privatize the Screening Function by Some in Congress
Following the tragic events of 9/11, Congress and the public demanded that jobs of screening passengers and baggage be performed by federal employees. A group of lawmakers successfully exempted the screening function at a few airports from being federalized and the Screening Partnership Program (SPP) was born. But some lawmakers and their business allies did not stop their opposition to federalization. They have been expanding the program from the original five airports to 16. The problem is, the SPP violates existing federal law prohibiting converting federal jobs to contractors without allowing federal employees to compete for the work. The program was a consolation prize to private contractors after their past poor performance in aviation screening led to the federalization of those jobs in the first place.
TSA Administrator John Pistole suspended the SPP in January 2011 after concluding that private screeners were more expensive and did not provide equivalent security when compared to federalized TSOs. Representing the financial interests of security contractors such as Covenant and Trinity instead of the security interests of the flying public, former House Transportation Committee Chairman John Mica (R-FL) insisted on holding up the important Federal Aviation Administration Modernization Act until a provision he supported to make the privatization of TSO jobs easier was included. In addition to limiting the TSA Administrator’s authority to disapprove SPP applications, the provisions even allowed foreign companies to apply to perform screening at U.S. airports.
However, what Rep. Mica and security contractors failed to account for was the dedication of TSOs to retain their jobs as employees of TSA working as part of the federal team to protect the flying public. On January 8, 2013, the Sacramento County Council reversed its decision to apply for private screeners under the SPP program. Members of the Sacramento County Council responded to facts provided by a recent Government Accountability Office report that concluded TSA has insufficient evidence to support that private screeners are more effective or cheaper than federal TSOs, and expressed concerns that TSOs might lose their jobs if a private contractor was in charge at the airport. AFGE will continue to provide local officials with the facts about SPP to prevent expansion of this program. As in other personnel matters, TSA should follow the same laws and regulations that apply to other federal agencies. AFGE will work with members of Congress to introduce legislation that will apply the same contracting-out rules to TSA and the SPP as followed by the rest of the federal government.
Health and Safety Issues
AFGE brought up the radiation issue with TSA in early 2010 and urged all TSA officers to file with TSA a CA-2 workers’ compensation claim to document their exposure to ionizing radiation after AFGE received numerous reports from employees alarmed by what appeared to be a large number of TSOs being diagnosed with cancer and thyroid conditions in Boston and other locations. TSA maintained that the X-ray machines were safe and repeatedly denied AFGE’s requests for dosimeters and our offer to purchase them for officers. AFGE took the issue to Capitol Hill, and in July 2010, testified before Congress calling for a radiation safety and monitoring program at the agency. TSA announced that it would retest every one of its 247 full-body X-ray scanners at 38 airports after maintenance records on some of the devices showed that X-ray machines emit ionizing radiation 10 times higher than previously reported.
In an article from the premier science publication, Scientific American, two quotes from respected scientists say it all: "I wouldn't dream of not having [dosimeters] already," said Dr. Nagy Elsayyad, of the University of Miami School of Medicine. "By any definition they are radiation workers," said David Brenner, director of the Center for Radiological Research at Columbia. AFGE will continue to press Congress for legislation that would require TSA to allow TSOs to wear dosimeters and be responsible for the collection, testing and reporting of the results.
Conclusion
AFGE and its TSA members made great strides toward full workplace rights and protections in 2012. However, much remains to be accomplished so that TSOs are treated with equality. AFGE will take the case for TSO rights to both President Obama and Congress during 2013.

Domestic Partnership Benefits

Introduction
It is fully expected that the fight for equality will continue with the reintroduction of The Domestic Partnership Benefits and Obligations Act during the 113th Congress. The bill was introduced during the 112th Congress by now-retired Senator Joseph Lieberman (I-CT) and Representative Tammy Baldwin (D-WI), the newly-elected Senator from Wisconsin. Although the House bill (H.R. 3485) did not move far in that body, the Senate companion bill (S. 1910) was reported out by the Homeland Security and Government Affairs Committee and placed on the calendar for a vote by the full Senate that was precluded by the adjournment of the 112th Congress. The Domestic Partnership Benefits and Obligations Act provides the same-gender domestic partners of federal employees the same benefits available to spouses of married federal employees. AFGE strongly urges the House and Senate to continue the fight for equality on behalf of all federal workers.

The Domestic Partnership Benefits and Obligations Act is about equity. It is not, as its opponents try to argue, about providing any form of special preference or extra benefit for federal employees who have formalized their exclusive relationships with a same-gender domestic partner as compared with those who marry a person of a different gender. The equalization of benefits would extend to health insurance under the Federal Employees Health Benefits Program (FEHBP), retirement benefits, rights under the Family and Medical Leave Act (FMLA), life insurance under the Federal Employees Group Life Insurance (FEGLI) plan, workers’ compensation, death and disability benefits, and reimbursement benefits for relocation, travel, and related expenses. Further, the biological and adopted children of the domestic partner would be treated just like step-children of married federal employees under the benefits listed. Finally, under the legislation, same-gender domestic partners would be subject to the same anti-nepotism and financial rules and obligations as those that apply to married federal employees.

Background

To become eligible for the equitable treatment provided for in the legislation, federal employees would be required to file legal affidavits of eligibility with the Office of Personnel Management (OPM) to certify that they share a home, and financial responsibilities. The employee must affirm the intention to remain in the domestic partnership indefinitely, and must notify OPM within thirty days if the partnership is dissolved. The provisions of the legislation would apply only to same-sex domestic partnerships.

The practice of treating married employees and those in committed same-sex partnerships equitably with regard to health insurance and retirement benefits is well-established in the private sector and in many state and local governments. More than half of the Fortune 500 firms extend equal benefits to spouses and same-sex domestic partnerships. They do so not only because it is fair and appropriate, but also because the market has made such policies an imperative in the competition to attract and retain excellent employees. The federal government should do no less. It should strive to attain the highest level of fairness for its employees, and it has a duty to all taxpayers to adopt employment policies that facilitate the hiring and retention of a workforce of the highest possible quality.

The impending retirement of the baby boom generation of federal employees has occasioned an enormous amount of hang-wringing among administration officials and career agency managers. Private contractors have been eager to win for themselves as much as possible of the work that has been performed by retiring federal employees, and they are free to offer domestic partner benefits. A central question at the heart of all this anxiety is whether the federal government will be able to recruit the next generation, or whether the most desirable candidates for federal jobs will be lost to the private sector.

Putting aside for a moment the still-enormous pay gap between the federal and non-federal sectors and the fact that FEHBP is poorly run and as a result costs both taxpayers and federal employees more than it should, there is the issue of equitable treatment of GLBT (gay, lesbian, bisexual and transgender) people. When the Human Rights Campaign released its 2006 study of the employment practices of Fortune 500 companies with respect to domestic partners, its president, Joe Solmonese, summarized the findings as follows: “Companies do it (provide equitable benefits to domestic partners) because it’s good for business. American corporations understand that a welcoming environment attracts the best talent.”

Refusal to provide equitable treatment with regard to the provision of employee benefits is a violation of the merit system principle that promises equal pay for substantially equal work. The economic value of family coverage for health insurance, survivor benefits for retirement, disability, workers’ compensation, and life insurance; and full family coverage of relocation costs are substantial to a worker and would have extremely modest costs for the government. The equal pay principle has historically been understood to include all financial compensation, not just salary. Non-cash federal benefits make up almost a third of a typical federal employee’s compensation. In many metropolitan areas, the salary gap between federal and non-federal jobs has actually grown in recent years so that it now stands at 34 percent on average nationwide. To exacerbate the challenge this poses to efforts by federal agencies to hire the next generation of federal employees by continuing to discriminate between married employees, and those in domestic partnerships is as irrational as it is unfair.

Imagine the perspective of a high-performing federal employee in a job that the federal government admits it has trouble recruiting for, who happens to have a domestic partner and two children. Perhaps the worker is a Certified Registered Nurse Anesthetist in the VA, or a Defense Department Information Technology Specialist with a high security classification, or an experienced DHS contract administrator with the proven ability to identify fraud on the part of contractors, or a skilled electrician who works on repair of highly complex weapons, or a Corrections Officer who puts his life on the line every day to keep us and his fellow officers safe from dangerous inmates in federal prisons. Consider that he or she might have a co-worker with identical job responsibilities and performance who happens to have a spouse and a couple of kids.

Because the Domestic Partnership Benefits legislation has not yet been enacted, the two workers will receive vastly different compensation in return for their work for the federal government. One would enjoy subsidized family coverage from FEHBP, worth approximately $11,049 per year, and that subsidy is not taxed. The employee with the domestic partner and children, in contrast, is eligible for only single coverage from FEHBP. As of 2013, the difference between what the government pays for FEHBP for family versus single coverage is $6,087 per year. To obtain similar insurance for his family, the employee in the domestic partnership would have to pay at least the same $6,087 per year in the open market, and the money spent on the premium would be tax deductible, but not tax free.

A married federal employee with two children who dies early leaves his or her survivors a death benefit of half of the employee’s salary plus $29,722, as well as survivors benefits through FERS if the employee worked at least 10 years. In identical circumstances, the survivors of a federal employee with a domestic partner and two children are left with nothing. But if the employee were married with children and had the exact same age, earnings, and severity of day to keep us and his fellow officers safe from dangerous inmates in federal prisons. Consider that he or she might have a co-worker with identical job responsibilities and performance who happens to have a spouse and a couple of children.

The difference between the retirement annuities of employees with and without survivor designations vary widely on the basis of length of service, age at retirement, high-three salary, and retirement system. The two major federal retirement systems, the Civil Service Retirement System (CSRS), and the Federal Employees Retirement System (FERS) both allow married federal employees to ensure that their survivors continue to receive benefits after they die. The employee is required to take a reduction in the amount of his or her annuity in order to “buy” this survivor protection, but in most cases, taking the survivor option costs the employee about half of the value of benefits received by the survivor.

FERS provides two options for survivor annuities, either one half or one fourth of the value of the annuity. CSRS is a bit more complicated, allowing 55 percent of anything from the full annuity to 55 percent of one dollar of annuity. CSRS and FERS also allow survivor annuities to be paid to more than one former spouse at a time, as well as a widow or widower. (It is therefore difficult to argue that current law is based upon a religious concept of marriage or a view that marriages are more stable than domestic partnerships). The important point is that the financial value of survivor annuity benefits is substantial, and is, for the vast majority of federal employees who earn a full retirement annuity after a career of federal service, the single largest component of compensation after salary and their own annuity. This inequity in the treatment of a federal employee’s survivors is the most severe and the most indefensible. After all, even the most ardent opponent of equality might feel shame at depriving an elderly surviving domestic partner the survivor benefits available to an elderly surviving husband or wife.

How Can Anyone Square These Facts With The Merit System Principle Of Equal Pay For Substantially Equal Work?

The answer is that one cannot justify discriminating against federal employees who are in domestic partnerships versus federal employees who are in conventional marriages. All else equal, sexual orientation should not form the basis of discrimination in compensation. But unless and until the Domestic Partnership Benefits Act becomes law, discrimination in compensation will continue to occur in the federal government.

Of course, passage of this legislation is not just a matter of fairness. It is also a matter of what is necessary for the federal government to succeed in recruiting the next generation of government employees, and to retain them once they form monogamous relationships and start families. There will be no reason to stay with the government when other employers, whose mission can be just as compelling as the government’s, offer higher salaries and more comprehensive benefits.
Employees who do stay and are affected by the inequity will understandably feel the pain of this discrimination, and it will inevitably affect their morale and commitment to their agency’s mission. They will know that they are receiving far less compensation for their work than their married coworkers, and have every reason to feel resentment at the inequity.

Cost cannot serve as a valid rationale for failure to pass this legislation, as the Congressional Budget Office (CBO) has calculated that enactment would add less than one half of one percent to the existing costs of these programs. That estimate excludes the cost of turnover, recruitment, and training when experienced federal employees leave federal service because of this inequity. The cost should be viewed as if it were simply the case that larger numbers of federal employees began to marry. Surely the Congress would not respond to this by abolishing the benefits currently extended to spouses and families. As such, no one should argue that the happy occasion of the formation and maintenance of families is unaffordable or insupportable for the United States government.

Administrative and Executive Action

In June 2009, President Obama issued a memorandum on “Federal Benefits and Non-Discrimination” that was followed by the Office of Personnel Management (OPM) issue of Regulations to Extend Partnership Benefits” on September 15, 2009. The Presidential memo and the OPM regulations allow the federal government to provide nonstatutory benefits to domestic partners of federal employees. Also in 2009 the Office of Special Counsel reinstated its longstanding policy of accepting complaints of sexual orientation discrimination in federal employment for investigation.

New OPM Rules Are a Good Step in the Right Direction

On June 12, 2012, rules went into effect to implement President Obama’s 2009 and 2010 orders extending certain benefits to same sex domestic partners of federal workers and their families. The new rules made partners who meet qualifications eligible for certain annuities and evacuation pay and noncompetitive appointments when federal workers are on overseas assignments. In addition, the children of same sex domestic partners would be eligible for child-care subsidies. These new rules are a significant step to address the uncertainty that results for families of same sex domestic partners and the federal workforce.

Conclusion

The Domestic Partnership Benefits Act is fair and equitable for employees, is affordable for the taxpayers, and will greatly enhance recruiting and retention in the federal government. It should be passed and signed into law with all due speed.

Employment Non-Discrimination Act (ENDA)
Background
The pursuit of justice has not always been easy or popular, but AFGE stands true to a basic tenet of fairness: an employee or job applicant should be judged by his or her ability to perform the job. In this light, AFGE strongly opposes employment discrimination on the basis of sexual orientation. Right now, it is not a statutory civil rights violation to fire a hard-working, dedicated federal employee simply because that worker is not heterosexual – and that is wrong. Although this protection has been applied administratively to federal employees for three decades, as recently as the George W. Bush administration the Special Counsel systematically denied federal workers a process to remedy discrimination based on sexual orientation demonstrating the need for statutory protections The Employee Non-Discrimination Act (ENDA) extends federal employment discrimination protections currently provided on race, religion, sex national origin, age and disability to sexual orientation for both public and private workers. Although ENDA was introduced in the Senate as S. 811 by Senator Jeff Merkley (D-OR) and in the House as H.R. 1397 by recently retired Rep. Barney Frank (D-MA), neither bill advanced out of their respective committees. AFGE supports ENDA as well as legislation extending benefits to domestic partners of federal employees.
ENDA Provides Basic Legal Protections * Extends federal employment discrimination protections currently based on race, sex, religion, national origin, age and disability to sexual orientation. ENDA extends fair employment practices and does not convey special rights. * Prohibits public and private employers, employment agencies and labor unions from using an individual’s sexual orientation as the basis for employment decisions. * Provides for the same process as permitted under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act but has limited remedies. Remedies that are available for cases of statistically disparate impact (affirmative action, quotas or the prohibitions of policy or practice) are permissible under ENDA.
What ENDA Does Not Do: * Does not cover most religious organizations and employers with 15 or fewer employees. * Does not apply to the uniformed members of the armed forces and does not affect current law on lesbians and gays in the military. * Does not require an employer to provide benefits for the same-sex partner of an employee. * Does not allow the Equal Employment Opportunity Commission (EEOC) to collect statistics on sexual orientation.
Conclusion
AFGE strongly urges the reintroduction and passage of ENDA in the House and Senate.

Paid Parental Leave
Introduction

Despite the protections of the Family and Medical Leave Act (FMLA), federal workers are among those who must choose between a paycheck and meeting their family obligations because they currently have no paid parental leave. Paid parental leave champion Rep. Carolyn Maloney (D-NY) reintroduced the Federal Employee Paid Parental Leave Act in the House during the 112th Congress. The bill would provide federal employees four of the twelve weeks of paid family medical leave upon the birth, adoption or fostering of a child.

Virtually all research on child development and family stability supports the notion that parent-infant bonding during the earliest months of life is crucial. Children who form strong emotional bonds or “attachment” with their parents are most likely to do well in school, have positive relationships with others, and enjoy good health during their lifetimes. These are outcomes that should be the goal for all children, including those of federal employees. Spending time with a newborn or a newly adopted child should not be viewed as a personal choice, or a luxury that only the rich should be able to afford. The only reason a new parent would ever go back to work immediately after the birth or adoption of a child—even with the protections of the FMLA—is because she or he could not do without his or her paycheck. And far too many workers in both the federal government and outside must make this terrible choice.

Congressional opponents of paid parental leave for federal employees have raised arguments largely based on cost, or notions that attempt “ranking” parental status and are unrealistic about the ability of federal workers to accrue leave. No one can accurately project the cost of extending this benefit to new parents, but we can speculate on the categories of cost of failing to do so. Productivity is lost when a parent has had to come back to work too soon to have found proper daycare for a newborn or newly adopted child or when federal employees come to work when they are ill because they used up all of their sick leave during the adoption process. A lack of paid parental leave also negatively impacts the government when a good worker, trained at taxpayer expense, decides to leave federal service for another employer who does offer paid leave.

The Federal Employee Paid Parental Leave Act

Some opposition is based on irrelevant distinctions between adoptive parents, birth parents, mothers and fathers. The FMLA settled the question of whether anyone besides a woman who has just given birth deserves time off from work to care for a child. Attempts to create an employer-financed short-term disability insurance for federal employees as a means of providing paid maternity leave for birth mothers only solves part of the problem. Such a short-term disability insurance program would not provide a solution for new fathers or new adoptive parents and is therefore discriminatory as a solution to the problem of providing paid leave to new parents. The Federal Employee Paid Parental Leave Act takes it as a given that all parents deserve equal treatment. Federal employees are only able to accumulate a maximum of 30 days of annual leave, not an adequate amount of time for providing care to a newborn or a newly adopted child. By most conservative estimates it would take a federal worker who takes two weeks of annual leave and 3 days of sick leave per year close to 5 years to accrue enough sick and annual leave to receive pay during the 12 weeks of parental leave allowed under FMLA. Even if a federal worker never got sick and never went on vacation it would take over 2 years to accumulate enough leave to pay for 12 weeks of parental leave. The alternatives suggested by federal employee paid parental leave opponents are far too simplistic and unrealistic to adequately address the problem.

Federal workers who take unpaid parental leave too often fall behind on their bills and face financial ruin. Federal workers in their child-bearing or adopting years, earn less, on average, than other federal employees. They are at a moment in their careers when they can least afford to take any time off without pay, and least likely to have accumulated significant savings. One AFGE member wrote she has been a federal employee since 2002, and has had 3 children during that time. She wrote:

I found it very difficult to keep leave since I am using it for doctor’s appointments, maternity leave and other instances of sickness that may occur with me or my children. Since 2002 I have borrowed 6 weeks of leave for maternity leave—which took me over 2 years to pay back. During the period of time when I returned to work and had to pay my sick leave back, neither me nor my kids could afford to get sick because I did not have any leave to use. During my duration of Leave Without Pay I had to resort to public assistance to make ends meet. It was very hard to ask for help during my maternity leave. I had to explain to them that I make more than some of the social workers taking my application but I am currently on leave without pay and need assistance until my 8 weeks maternity period is over.

Although there is no law providing paid parental leave for federal workers that would prevent the situation described by the AFGE member, the federal government currently reimburses federal contractors and grantees for the cost of providing paid parental leave to their workers. Surely if such practice is affordable and reasonable for contractors and grantees, federal employees should be eligible for similar treatment.

Conclusion

The time has come for the federal government to follow the standard set by private employers on paid parental leave. Despite the failed but pervasive arguments of those who seek to blame federal worker wages and benefits for the current budget crisis, AFGE knows that the federal government can only attract and keep the workforce necessary to carry out its mission by providing benefits on par with other large employers. Unlike the previous two sessions, there was no reintroduction of the bill in the Senate during the 112th Congress. AFGE will again work with a coalition of work-family advocates to support a reintroduction of the Federal Employee Paid Parental Leave bill in the House, and to identify and support a member of the Senate who will introduce and take leadership of the bill in that body. The federal government should set a clear example to the majority of private employers who refuse extend this crucial benefit to their employees unless their competitors or the law requires it of them. The benefits to children and families of four weeks of paid parental leave are enormous and long-lasting. AFGE strongly urges passage of the Federal Employee Paid Parental Leave Act during the 113th Congress.

“One America, Many Voices” Act
Introduction
According to the U.S. Census Bureau, over 47 million people currently living in the U.S. speak a language other than English. More than 11 million people in the U.S. are linguistically isolated, meaning that they lack a command of the English language and have no one to help them with language issues on a regular basis. A growing number of federal employees provide services to the linguistically isolated by using multilingual skills in their official duties to explain application processes, determine benefit eligibility and provide public safety. Increasingly, the multilingual skills of federal employees are an absolute necessity to serve the public and accomplish the mission of federal agencies. Yet there is no standard across federal agencies to provide compensation for federal workers who make substantial use of their multilingual skills in the workplace.
The “One America, Many Voices” Act
During the 111th Congress, Representative Mike Honda (D-CA) introduced the "One America, Many Voices" Act (H.R. 4832) to ensure that all federal workers who use their multilingual skills in the workplace on a regular basis are fairly compensated. The bill would have amended 5 U.S.C. § 5545 by adding multilingual skills to the list of factors for which a differential might be paid. Current law provides for a pay differential to federal workers for night, standby, irregular, and hazardous duty work. The amendment authorizes the head of an agency to pay a 5% differential to any employee who makes substantial use of a foreign language in his or her official duties.
The necessity for a multilingual pay differential has been recognized by federal law enforcement agencies. Agencies such as Customs and Border Protection and the Border Patrol recognize multilingual skills through either a pay differential or bonuses. Employees who can communicate effectively with the populations federal agencies are mandated to serve greatly assist the agencies in carrying out their respective missions.
In addition to adequately recognizing the skills of current federal workers, a multilingual pay differential would also help to entice young workers with multilingual skills into federal civil service. Although the private sector often pays a substantial dividend for the ability to speak fluently more than one language, many young workers with a commitment to their communities would be more likely to consider federal employment as a career option if they were to receive adequate compensation for their much sought-after language skills.
A number of federal agency offices are located in areas with a large and growing population of citizens with limited English speaking ability, such as California, New Mexico, Texas, New York, and Hawaii. Between 1990 and 2000, the non-English speaking population doubled in Nevada, Georgia, North Carolina, Utah, Arkansas and Oregon. Multilingual skills will become increasingly necessary to foster client communication for effective delivery of services and for the successful function of federal agencies. The "One America, Many Voices" Act provides both a mechanism to pay current federal workers using their bilingual skills on the job, and works as an incentive to aid in the future recruitment of bilingual applicants.
Conclusion
Although Rep. Honda did not reintroduce the bill during the 112th Congress, AFGE will work with him and others for reintroduction of the "One America, Many Voices" Act in the House and Senate during the 113th Congress. The class of freshmen lawmakers has brought an increase in the number of members of both Chambers who were raised in homes where a language other than English was spoken. This increased diversity should yield support for the bill. The benefits of a more efficient government and better services to the public will far outweigh the modest cost of paying this differential.

Department of Veterans Affairs

Introduction

In 2013, AFGE and the National VA Council (AFGE) will work to combat forces in the Department of Veterans Affairs (VA) that hinder its dedicated workforce (many of whom are veterans themselves) from providing veterans with the exemplary services they have earned. These forces include severe short staffing of health care providers, arbitrary performance standards for disability claims processors, lack of equal bargaining rights for medical professionals, and retaliation against front line personnel who voice concerns at the Congressional witness table or in the workplace. AFGE will seek increased oversight of VA spending practices that too often divert dollars away from direct patient care, and we will continue our campaign to curb illegal outsourcing of work performed by primarily by veterans in the VA workforce.

Equal Bargaining Rights For Title 38 Health Care Professionals

Since 2003, the Veterans Health Administration (VHA) has prohibited collective bargaining over most workplace issues impacting “pure Title 38” clinicians working as physicians, dentists, registered nurses (RN), physician assistants (PA), podiatrists, optometrists, chiropractors, and expanded duty dental auxiliaries. As a result, these clinicians have starkly different bargaining rights than clinicians working in the same positions at military and federal prison facilities, and their VHA colleagues under Hybrid Title 38 and Title 5 personnel systems with full bargaining rights.

Two important developments in 2010 confirm the importance of enacting reform of Title 38 bargaining rights law. First, the VA issued new agency policy on Title 38 bargaining rights, most significantly, a clarification that VA clinicians have the right to bargain over the VA’s failure to follow its own regulations and policies. Second, VA initiated a bargaining rights pilot project pursuant to legislation merging a Navy facility with a VA facility in North Chicago; clinicians transferring from Navy Title 5 jobs to VA Title 38 jobs were given full Title 5 bargaining rights to clinicians on a pilot basis.

Two years later, none of the dire warnings about patient safety made by opponents of full bargaining rights have borne true. No patients in VA medical centers have been harmed. In fact, full bargaining rights at the new North Chicago joint facility have enabled management and labor to efficiently and amicably resolve a number of significant transition issues. Nationally, the new VA bargaining rights policy encourages greater labor-management cooperation. (It should be noted that the VA entered into an agreement with AFGE and other VA unions in 1999 to clarify the rights of these clinicians to bargain routine workplace issues. This agreement vastly reduced the number of labor management disputes and fostered valuable collaboration regarding innovations in health care delivery. Sadly, the Bush Administration invalidated the agreement in 2003.)

Therefore, in 2013, AFGE and the National VA Council will seek to reintroduce legislation to eliminate arbitrary limitations on Title 38 bargaining rights. The ability of this workforce to have an equal voice in the workplace should no longer depend on national politics or the whims of local human resources personnel. Veterans will be the greatest beneficiaries of this long overdue legislation that will hold the VA accountable for failure to follow its own rules and regulations.

Congressional Action Needed:

* Enact legislation to amend 38 USC §7422 to restore equal rights to bargain to “pure Title 38” health care professionals.

Veterans Benefits Administration: Transformation Provides Urgent Reminder of Need for Workable Performance Standards and Adequate Training

AFGE and the National VA Council commend the Veterans Benefits Administration’s (VBA) efforts to overhaul the disability claims process with its “Transformation Plan” and to “go paperless” through its Veterans Benefits Management System (VBMS). AFGE has had input into some of these initiatives but excluded by others where the perspective of the employees doing the job on the front lines is equally important. To ensure the success of VBA’s Transformation Plan, AFGE and the National VA Council urge Congress and VBA to address two major, longstanding deficiencies: training and performance standards.

Our VBA members continue to report problems with the quality of training for the increasingly complex jobs of developing and deciding claims for disability, pensions and other benefits. New employees are rushed into production without adequate on-the-job mentoring. VBA continues to overemphasize online training in lieu of classroom training that deprives new and experienced employees of sufficient time and guidance to fully comprehend new complex concepts. In addition, many of the managers who provide training and mentoring at the VBA regional offices (ROs) lack the experience or expertise to train and mentor front line employees.

VBA’s newest training experiment, shutting down all production in “underperforming” ROs for thirty days to provide full time employee training, should be carefully monitored as it is rolled out in California and other locations to ensure the use of an effective curriculum and skilled instructors. In addition, Congress should investigate the method that VBA currently uses to allocate staff among ROs, and whether VBA should adopt a model similar to VHA’s “VERA” (Veterans Equitable Resource Allocation (VERA) model.)

VBA’s performance standards for production of claims continue to be set based on pressure to “make the numbers” rather than on evidence-based measures that actually reflect the time needed to process a claim accurately the first time. VBA Transformation has exacerbated this problem; front line employees are subject to higher production quotas based on management’s incorrect assumption that Transformation has already reaped significant efficiencies. AFGE and the National VA Council urge Congress to enforce the requirement in 2008 legislation (Public Law 110-389) to develop a work credit system to properly measure the amount of time involved in performing different steps of the claims process, much like the time motion studies regularly used in the private sector.

Congressional Action Needed:

* Ensure an adequate role for front line personnel and their representatives in pending Transformation efforts. * Ensure adequate classroom training and mentoring for employees at all experience levels. * Expedite implementation of work credit provisions in P.L. 110-389. * Conduct oversight of VBA’s model for allocating staff and resources between regional offices

Equal Protections for Veterans in the VHA Workplace

AFGE and the National VA Council will seek legislation to provide equal rights to veterans hired by the Veterans Health Administration (VHA) under the Title 38 or Hybrid Title 38 personnel systems. More specifically, legislation is needed to overturn a 2003 Federal Circuit Court decision that held that these VHA employees are not covered by the Veterans Employment Opportunities Act (VEOA), and therefore lack the right to appeal to the Merit Systems Protection Board and Labor Department when their veterans’ preference is violated. It is hard to believe that the men and women who are healing veterans at VA medical centers, including the growing number of active duty personnel service in the medical corps who are transitioning to VHA jobs such as physician, psychologist, registered nurse, pharmacist and physician assistant, lack the same employment rights as other veterans seeking or working in Title 5 positions. It makes no sense for a VA health care employee who has served his or her country to have fewer employment opportunities than a veteran delivering health care at military hospitals or other federal facilities. The need for this legislative change has become even greater as VHA converts more Title 5 employees to the Hybrid Title 38 personnel system pursuant to the expanded authority provided to the VA Secretary by the Caregivers and Veterans Omnibus Health Services Act (Public Law 111-163) (Caregiver Act).

Congressional Action Needed:

* Extend coverage of the Veterans Employment Opportunities Act, including appeal rights, to all hybrid and pure Title 38 employees as well as other federal employees lacking equal VEOA rights.

More Accountability for VHA Spending Lawmakers and veterans’ groups count on AFGE members to be the “eyes and ears on the ground” to monitor VA spending practices. Our members’ reports indicate that the VA continues to use medical care appropriations to expand its already top heavy management workforce and pay excessive management bonuses, at the expense of direct services to veterans.

The same managers claim budget shortfalls and anticipated funding cuts in order to impose hiring freezes and personnel caps, close hospital beds, use contract care, and deny reimbursement for continuing medical education. Such claims are even less credible in the era of VHA advance appropriations, achieved through the efforts of AFGE and the National VA Council working with veterans service organizations (VSO) to secure funding reform legislation in 2009 (Public Law 111-81) .

Congressional Action Needed:

* AFGE and the National VA Congress urge lawmakers to Increase oversight of medical center budgets, including use of funds covered by the advance appropriations process, growing reliance on costly contract care, wasteful construction projects and the continuing shift in the VHA workforce away from personnel providing direct patient care toward middle and upper management and human resource staff.

VHA Staffing: A Growing Crisis in Patient Care Quality and Access

VHA regularly implements new patient care initiatives without corresponding increases in staff or workspace. As a result, the goals of these important initiatives are frustrated, and already short staffed facilities are even less able to provide quality, timely care. Short staff has taken an especially heavy toll on the effectiveness of VHA’s “PACT” initiative (Patient Aligned Care Teams). While this team approach has the potential to improve quality and access of veterans’ care the services to be delivered through PACT are not being supported by sufficient staff or resources. Rather, PACT has placed significant new responsibilities on VA physicians and nurses who are already carrying enormous patient caseloads. Many PACT teams are being staffed by removing clinicians form other units that are badly understaffed, requiring one clinician to support several teams and requiring employees to perform functions for PACT that are outside their scope of practice because their team is not fully staffed. PACT staffing shortages are contributing to the problem of “patient wait list gaming” by managers trying to meet their own performance measures.

Staff-patient ratios and other sound staffing policies are sorely lacking at VHA. In the 113th Congress, AFGE and the National VA Council will seek cosponsors for legislation to provide nurse staffing ratios in VA medical facilities and protection against retaliation for nurses who report short staffing. The Nurse Staffing Standards for Patient Safety and Quality of Care Act of 2011 was the only nurse staffing bill covering VA nurses and included strong safeguards against retaliation.

VHA’s own staffing policy, a new staffing methodology directive issued in 2011 does not provide fixed ratios. Our members report that this modest initiative to improve staffing has been undermined by lack of training, confusion, and an inadequate role for labor.

VHA’s newest “quick fix” to short staffing is actually a recycled, failed idea from the 1970s: using unlicensed personnel to provide medication and injections to patients who may have significant health issues. These unlicensed personnel may lack the skills to safely treat or monitor patients. In addition, supervision of these employees poses a risk to the licensed personnel who will be required to supervise them.

Short staffing also increases the risk of violence in the health care workplace, especially emergency rooms and psychiatric units. While VHA already has some mechanisms in place to address workplace violence, more oversight is needed to ensure that front line employees and their patients are safe. Congress should consider best practices in place in other health care systems to protect patients and employees and ensure that employees who report safety concerns are protected from retaliation.

Congressional Action Needed:

* Reintroduce the Nurse Staffing Standards for Patient Safety and Quality of Care Act. * Monitor implementation of VHA’s staffing methodology * Conduct oversight of the Primary Care and Specialty PACT Teams. * Conduct oversight of VHA’s workplace violence safeguards. * Monitor use of unlicensed personnel and its impact on patient safety and recruitment and retention of medical professionals.

Enforcing and Strengthening VHA Recruitment and Retention Legislation

AFGE and the National VA Council urge lawmakers to exert pressure on the VA to comply with healthcare and benefit personnel laws that are still not fully implemented, including provisions still not in place nine years after enactment! These delays and acts of noncompliance impact workplace morale, reduce veterans’ access to services, result in excessive use of costly contract care and weaken the VA’s ability to recruit and retain clinicians in the face of a rapidly aging VA workforce.

The “pure Title 38” professionals with limited “7422” bargaining rights have particular difficulty challenging poor personnel policies and violations of law and regulation that impact working conditions. New limits on mandatory nurse overtime in the Caregiver Act are regularly violated by managers who improperly assert the “emergency” exception. VHA should only require nurses to work overtime in exceptional circumstances, similar to the laws of many states, rather than regularly mandate overtime because of poor staffing plans.

VHA regularly abuses its “24/7” regulation that requires physicians to work extended shifts as needed. While VA physicians should expect occasional requirements to work beyond their regular shifts, neither they nor their patients should be endangered by having to follow a full day shift with evening, weekend and on call shifts week after week.

Oversight of the physician and dentist pay provisions in P.L 108-445 is long overdue. Our members report widespread problems with the panels used to set market pay and managers’ failure to issue performance standards timely or use proper criteria to determine performance pay awards. Also, VA lags behind many other health care employers who assist with continuing medical education (CME) costs to maintain clinician licenses, certifications and competence to provide quality care. VA doctors and dentists are entitled to modest reimbursement of CME costs by statute; other VA clinicians receive CME reimbursement at the discretion of management. The VA doctor/dentist benefit amount has not been updated since 1991. Other VA clinicians are currently receiving little or no help with CME costs because managers claim funds are not available.

Congressional Action Needed:

* Conduct oversight of VHA compliance with nurse overtime statutory protections. * Conduct oversight of the physician and dentist pay system and other physician and dentist workplace issues, including the “24/7” scheduling rule, other scheduling problems, and patient caseloads, that are hurting VHA’s ability to recruit and retain providers. * Enact legislation to require the Department to issue nationally uniform guidelines for performance pay criteria, and to clarify that all performance pay criteria must only be based on individual achievement, not facility-wide performance or factors beyond the provider’s control. * Enact legislation to increase the statutory CME benefit for physicians and dentists and provide similar benefits to other VHA clinicians to keep VHA competitive with other health care employers. * Investigate costs of the executive nurse and pharmacist bonus provisions in the Caregiver Act and less transparent pay rules for management physicians and dentists.

Retaliation Against Whistleblowers and Union Activists

VA employees who engage in union activity or voice concerns about unmet veterans’ needs have long faced the risk of retaliation in the form of terminations and demotions, performance improvement plans and investigations among other forms of harassment. VA appears to be taking these practices to the next level, based on recent developments that could threaten Congress’ ability to solicit testimony from front line employees. A VA psychologist who testified for AFGE about lack of access to mental health services before the Senate VA Committee in 2011 is still facing retaliation in the form of a lowered performance rating and removal of duties. Admonishments from Committee Chair and an Inspector General report confirming the psychologist’s assertions have not persuaded the VA to change course. Another AFGE witness who testified about nursing issues before the same committee was subsequently terminated.

The VA continues to utilize another retaliation tool provided by the previous administration in its final days: A human resources policy that provides that local union officials may be barred from serving on professional standards boards and disciplinary appeals boards, or deemed ineligible for performance awards and denied promotions.

Congressional Action Needed:

* Investigate VA human resources policy on official time (based on HRML 05-08-12) and other forms of VA retaliation against union officials; * Reverse retaliatory actions against VA employees who have testified before Congress and ensure that VA can no longer use retaliation to intimidate Congressional witnesses; * Investigate other acts of retaliation against employees who have voiced concerns about VA practices impacting veterans.
VA Outsourcing Hurts Employment Opportunities for Tomorrow’s Veterans: Time to Insource!
The country’s economic woes continue to take an especially heavy toll on veterans’ employment opportunities. The VOW to Hire Heroes Act, signed into law by President Obama last November, assists with the transition from military service to civilian employment, including an expedited process for securing federal employment with veterans’ preference.
This important legislation must not be undermined by the VA’s widespread use of illegal and harmful contracting out, in VHA, VBA, National Cemetery Administration (NCA) and information technology (IT) jobs. The VA should not ignore its proud tradition of placing service-connected disabled veterans in entry level jobs as housekeepers, groundskeepers, hospital laundry and food service workers and cemetery caretakers. Veterans also comprise a large share of the VBA claims processing workforce and regularly transition to VA health care professional positions after saving lives on the battlefield.
“Direct conversion” – the outsourcing of federal work without proper privatization studies – is rampant at the VA, as already noted. Despite AFGE’s urging, VA has not taken steps to curb these illegal, harmful practices. Here too, veterans lose on both ends: the loss of excellent employment opportunities and lower quality VA services performed by contractors concerned more about their bottom line than about the mission of the VA.

AFGE and the National VA Council urge VA, consistent with longstanding law, to finally establish reliable and comprehensive inventories of all their current service contracts to determine which should be cancelled and which should be insourced, i.e. brought back in to the agency, and then expeditiously insource that work. We believe that all moderately skilled VA jobs should be insourced and reserved for veterans, especially those recovering from a disability. Some of the other VA functions that should be insourced, because they are more appropriately performed by the agency rather than a for profit contractor, include: the “comp and pen” disability exams used to determine service connection for VA benefits and health coverage, certain contract care arrangements and the collection of third party health insurance payments.
As already noted, VHA relies excessively on contract care, instead of implementing personnel practices that would improve recruitment and retention of health care personnel. At both the national and local levels, VHA continues to abuse its statutory “sharing” authority to arrange for non-VA care, which is only supposed to be exercised in limited circumstances, i.e. when VA care is not geographically accessible or cannot provide care for a specialized medical need. We have been especially concerned about new programs that rely on large health care contractors to set up their own provider networks, replacing the role of individual VA medical centers to arrange contract care through their knowledge of the community. Too often, contractors make unsubstantiated promises of cost efficiency and there continues to be a great lack of transparency in the bidding process.
Congressional Action Needed:

* Require the VA to issue direct conversion guidance. * Expedite the development of VA’s insourcing plan. * Conduct oversight of bidding process and claims of quality improvement and cost savings by contractors who provide health care services or arrange for contract care for veterans.

Veterans’ Preference Overhaul: 21st Century Overhaul Needed

AFGE and the National VA Council will continue to work with veterans’ groups this year on strengthening the complex set of rules governing veterans’ preference in federal employment, through both legislation and agency action. As already noted, one of the most glaring gaps in veterans’ preference rules is the lack of appeal rights for veterans applying for Title 38 VA health care jobs. A statutory fix is also needed to extend veterans’ preference rules to promotions and reassignments, a gap that especially impacts veterans in the Reserves and National Guard who take multiple leaves from their federal jobs. In addition, a change in Labor Department regulations is needed to update the list of jobs restricted to disabled veterans. To ensure compliance with veterans’ hiring requirements, OPM needs to collect more comprehensive data on agency efforts to recruit and retain veterans. Training of federal hiring officials who apply these rules and rate veterans’ skills acquired through military service should also be improved.

Congressional Action Needed: * Extend coverage of the Veterans Employment Opportunities Act, including appeal rights, to all hybrid and pure Title 38 employees. * Extend veterans’ preference laws to reassignments and promotions. * Update and expand the list of restricted positions for disabled veterans. * Improve OPM data collection on agency veteran hiring and increase training for federal hiring officials.

Fair Treatment of Veterans Canteen Service Employees

The Veterans Canteen Service (VCS) was established by Congress in 1946. VCS has retail, food and vending operations in VA medical facilities and some benefits offices. VCS operates with non-appropriated funds and its 3000 employees are appointed under a separate section of Title 38 from other Title 38 health care employees. As a result, VCS employees have no appeal rights through the negotiated grievance process or Merit Systems Protection Board if faced with termination and other adverse actions. Nor can they ever acquire permanent employment rights. In contrast, Title 5 employees acquire permanent status after one year, and most Title 38 employees acquire permanent status after two years. In addition, the canteen workforce – which is comprised of a disproportionate number of women and minorities -- is often paid less than other VA employees performing the same duties, especially in food service.

Congressional Action Needed:

* Enact legislation to provide terminated Veterans Canteen Service employees with full appeal rights.

Department of Defense (DoD): Keeping Our Nation Safe and Secure
Summary:

1. EXTEND THE GOVERNMENT-WIDE AND DOD-SPECIFIC SUSPENSIONS AGAINST STARTING UP ANY NEW OMB CIRCULAR A-76 STUDIES: Congress should extend the suspensions on the use of the OMB Circular A-76 privatization process in all agencies and in the Department of Defense (DoD) specifically until much-needed reforms have been implemented and functions performed by contractors, including commercial functions, are being systematically targeted for insourcing, using reliable and comprehensive inventories of service contracts. The Office of Management and Budget (OMB), by its own admission, has made no reforms to an A-76 process it acknowledges to be flawed. DoD has also urged Congress not to repeal the moratorium on the A-76 process. Pursuant to a bipartisan agreement in the FY10 National Defense Authorization Act (NDAA), the A-76 process cannot be used in DoD until the department finally finishes its inventory of service contracts. Certification of this much-delayed accomplishment is not expected until 2014. Schemes to repeal the government-wide and DoD-specific A-76 suspensions were unsuccessful in 2012, but contractors and their Congressional cronies will no doubt be back again in 2013.

2. LIFT THE ARBITRARY CAP ON THE SIZE OF THE CIVILIAN WORKFORCE: Consistent with the law, DoD should manage its civilian workforce by budgets and workloads. Instead, pursuant to the “Efficiency Initiative”, DoD has capped the size of its civilian workforce at FY10 levels. No workload analysis preceded the implementation of these reductions. Since the work performed by these civilian employees in many cases still needs to be carried out, it is feared that DoD will instead use service contractors because their use is not subject to the same constraints. It has been tacitly acknowledged that the Department is making performance decisions that are inconsistent with the law and contrary to taxpayer interests because of the cap on the civilian workforce. The Congress had tried to offset the impact of the civilian personnel cap by imposing a comparable cap on service contract spending. However, the latter cap was never enforced and was then repealed in the FY13 NDAA. As a result, there is a constraint on the size of the civilian workforce but no comparable constraint on service contractors. Inevitably, managers will use service contractors instead of civilian personnel, regardless of cost or legality.

3. CAREFULLY CONSIDER THE CONSEQUENCES BEFORE UNDERTAKING NEW ROUNDS OF BRAC: The Administration proposed significant force structure reductions as part of the FY13 DoD budget, including a corresponding reduction in the military’s facilities infrastructure through use of the Base Realignment and Closure (BRAC) process. Congress refused to approve a domestic BRAC for DoD in the FY13 NDAA. While it is unknown at this time whether or not DoD will request a BRAC for FY14, Congress should not approve BRAC until at least two criteria have been met: DoD and Congress complete a comprehensive review and closure of overseas bases that are no longer necessary in a changing global environment; and Congress increases revenue and thus avoids the far larger defense spending cuts from sequestration, so that the full extent of the budget threat and corresponding military drawdowns are known.

Moreover, any future BRAC should produce both short and long-term savings. Congress should avoid passing a BRAC resolution that repeats the mistakes of previous BRAC rounds where the calculated savings were scheduled to appear far into the future, while DoD spent enormous sums up front, increasing the national debt, disrupting the lives of our nation’s hardworking civilians and military, and in some cases destroying the livelihood of communities in the name of savings that never truly materialize. The Pentagon must resist the temptation to pre-determine BRAC sites through selectively and arbitrarily reducing civilian personnel through reorganizations, Reductions in Force and budget starvation so that the military value of an installation is diminished in advance of a review by an impartial panel. Further with a future BRAC on the horizon, the retirement benefits of civilian personnel must be protected to prevent creation of a double hardship for those who may be forced to retire early due to unforeseen and unavoidable job losses caused by a BRAC action or budget generated downsizing.

4. ENFORCE PROHIBITIONS AGAINST DIRECT CONVERSIONS: Consistent with the law, no work last performed by DoD civilian employees may be contracted out without ensuring conversions to contract would actually be in the best interests of taxpayers. Absent such formal determinations, any conversions are flatly illegal. To its credit, DoD has acknowledged that the risk of direct conversions increases significantly during downsizing and issued guidance to ensure compliance with the law. In fact, Personnel and Readiness has been helpful in enforcing that guidance. However, under pressure to get work performed but with far fewer civilian employees as a result of the “Efficiency Initiative”, some managers are illegally substituting contractor and military personnel for civilian personnel.

5. THROUGH INSOURCING, REQUIRE AGENCIES TO GIVE FEDERAL EMPLOYEES OPPORTUNITIES TO PERFORM NEW AND OUTSOURCED WORK: Consistent with the law, agencies should insource work that was contracted out without competition or is being poorly performed. Significant savings have been generated from insourcing, according to DoD. An independent group has determined that contractors are generally twice as costly as federal employees. Nevertheless, the arbitrary reductions imposed only on the civilian workforce, resulting in special approval processes that are as cumbersome as they are forbidding, have made it very difficult to insource.

6. PRESERVE AND PROTECT DOD’S INDUSTRIAL FACILITIES: Congress and the Administration must ensure preservation of our organic industrial base—our nation’s government-owned and government-operated depots, arsenals and ammunition plants—as DoD shifts military strategy and embarks on a major drawdown of force structure. The Administration’s stated commitment to preserving the defense industrial base must extend to the organic industrial base. It is vital that the House and Senate reaffirm Title 10 statutory provisions that assure the viability of an organic logistics and fabrication capability necessary to ensure military readiness.
AFGE agrees with long-held public policy that it is essential to the national security of the United States that DoD maintain an organic capability within the department, including skilled personnel, technical competencies, equipment, and facilities, to perform depot-level maintenance and repair of military equipment, as well as production/fabrication of same at our arsenals and ammunition plants, in order to ensure that the Armed Forces of the United States are able to meet training, operational, mobilization, and emergency requirements without impediment. The organic capability to perform depot-level maintenance, repair and production/fabrication of military equipment and ammunition must satisfy known and anticipated core maintenance and repair scenarios as well as retain key manufacture capabilities across the full range of peacetime and wartime scenarios.
The statutes that require this core capability and others, such as designation of a 50% floor for depot maintenance work by civilian employees of DoD, and protection of the organic industrial manufacturing base through the Arsenal Act, have kept our nation secure and our core defense skills protected and should continue to be supported and strengthened.
Changes in the FY13 NDAA to return depot maintenance law to long-standing statute reaffirms the commitment to a strong organic capability and a balance between public and private sector depot maintenance. On the other hand, it opens the door to new interpretation by DoD that must be diligently watched to ensure that Congress continue to protect those provisions that designate the workload that must be performed by civilian government employees to ensure the readiness of our military forces, particularly ensuring that core workload is actually established in the organic depots in a timely manner. Review and engagement with the required core reports will be key to preserving the long-term viability of the organic depot systems. Arsenals must work with the Congress to ensure that minimum capability to support the warfighter and preserve key capabilities are assigned to the facilities at efficient levels to maintain readiness.

Introduction
AFGE is honored to represent more than 250,000 federal employees in the Department of Defense (DoD)—hard-working public servants whose skill and dedication were instrumental in winning the Cold War and making the military capabilities of the United States of America second to none.
AFGE’s DoD members perform an extraordinary variety of critical tasks for the warfighters in theater as well as for taxpayers back home—from maintaining planes, ships, and tanks at constant states of readiness in depots and arsenals to administering contracts for goods and services and trying to prevent contractors from raiding the Treasury.
Significant reductions in defense spending—either in the rate of growth or in the base budget—are inevitable. However, under the Federal Budget Control Act, the failure of Congress to come to a long-term budget agreement by March 2013 will trigger a process known as sequestration under which hundreds of billions of dollars will automatically be cut from agencies’ budgets over the next ten years. According to Secretary Panetta, in the event of sequestration, “(T)he total cut will rise to about $1 trillion…The impacts of these cuts would be devastating for the Department.” In January 2013 correspondence with Congress, the Joints Chiefs of Staff reported that sequestration’s across-the-board cuts would leave the U.S. forces “compromised”, and that the military is on the brink of becoming a hollowed-out force.
Congressional Republicans are particularly concerned about the severe sequestration cuts to DoD’s budget. AFGE shares that concern. Indeed, that is one of many reasons why AFGE opposed the Federal Budget Control Act, and one of many reasons why AFGE supports efforts to revise this law in order to protect all agencies, including DoD, from arbitrary and Draconian cuts, in favor of tax increases for the wealthy and a more measured reduction in spending, an approach which would not impede our nation’s embryonic economic recovery. Unfortunately, some Congressional Republicans have proposed to offset some of the sequestration cuts to DoD’s budget by arbitrarily slashing the size of the federal civil service or by making unacceptable cuts to Social Security, Medicare, and Medicaid.
The bottom line for civilian employees with respect to defense spending cuts is that some jobs will be eliminated because the work is going away due to the drawdown in Iraq and Afghanistan and some jobs will be eliminated because we are no longer willing to pay to have the work done. However, in many cases, the work is not going away—and, therefore, the relevant civilian employees should not go away either.
DoD has implemented reductions in an arbitrary and thoughtless way, pursuant to the “Efficiency Initiative”, which eliminated civilian positions without any workload analysis and incited managers to illegally convert work performed by civilian employees to contractors. The civilian workforce must be reduced down to its FY10 levels, while spending on service contracts has continued to increase. Special approval is necessary before new work could be performed by civilian employees or work performed by contractors could be insourced. However, no special approval is required before new contracts could be undertaken or expanded on. At the expense of taxpayers and warfighters, work that could be performed more efficiently by civilian personnel or should be performed by civilian personnel because of its importance or sensitivity is either assigned to contractors or left with contractors.
AFGE does not maintain that civilian personnel should be immune from sacrifices as defense spending is reduced. However, AFGE does believe that any reductions should take into account that civilian employers are fewer in number and less costly than contractors. Indeed, the dramatic increase in defense spending over the last ten years reflects shocking increases in spending on service contractors but very modest increases in spending on civilian and military personnel. Nevertheless, the Department’s “Efficiency Initiative” is imposing vastly disproportionate sacrifices on civilian personnel. 1. EXTEND THE GOVERNMENT-WIDE SUSPENSION AGAINST STARTING UP ANY NEW OMB CIRCULAR A-76 STUDIES

Since FY09, the Financial Services Appropriations Bill has retained a provision that would prevent new A-76 reviews from being launched by any federal agency. A temporary suspension of new A-76 reviews was imposed specifically on DoD in the FY10 NDAA until the department finally complies with a longstanding requirement that it establish a contractor inventory and integrate the results into the budget process. OMB acknowledges that the process is flawed and in need of reform.

DoD strongly opposed a rogue House effort to repeal the prohibition on the A-76 process:

“The Department of Defense does NOT support the amendment that would lift the current moratorium, under section 325 of the FY10 NDAA, on public-private competitions under OMB Circular A-76 within DoD. Sec 325 requires that the Secretary of Defense make certain certifications related to improvements in the inventory of contracts for services, the review process associated with that inventory, and the integration of that data into the Department's budget justification materials.
“As delineated in our Nov 2011 plan to the Congress, the Department has made long-term commitments to be able to meet these certification requirements. Our priorities with regard to contracted services include continuous and measurable improvements to the inventory of contracts for services; a deliberate and comprehensive review process to ensure appropriate alignment of workload and prevent overreliance on contracted services; increased granularity in budget justification materials; and implementation of control mechanisms to preclude over execution of budget amounts. These have been highlighted by the Congress as critical to improve our resource stewardship. While we appreciate the value of the A-76 public-private competition process as a tool to help shape the Department's workforce, until we can fully understand the extent and scope of contracted services reliance as a component of the Total Force, further conversion of internally performed work to contract performance is not in the Department's best interests.
“The Department has made marked improvements in its Inventory of Contract of Services over the past year, and began comprehensive reviews of those inventories. However, there is still significant progress must be made prior to a certification from the Secretary of Defense. This includes additional steps to improve reporting of actual labor hours and associated costs as required by title 10, to fully understand our reliance on contracted services, and to better account for those contracted services in the Department's budget submission.”
The A-76 process is fundamentally flawed for several reasons.

The OMB Circular A-76 process can’t show savings: Even after years and years of costly and disruptive privatization studies across the federal government, GAO reported in 2008 that supporters of the OMB Circular A-76 could not demonstrate any savings:

“We have previously reported that other federal agencies—the Department of Defense (DoD) and the Department of Agriculture’s (USDA) Forest Service, in particular—did not develop comprehensive estimates for the costs associated with competitive sourcing. This report identifies similar issues at the Department of Labor (DoL). Without a better system to assess performance and comprehensively track all the costs associated with competitive sourcing, DoL cannot reliably assess whether competitive sourcing truly provides the best deal for the taxpayer…”1

Use of the OMB Circular A-76 was prohibited because the process is severely flawed: According to GAO and the DoD Inspector General (IG), the A-76 privatization process a. failed to keep track of costs and savings,

DoD IG: “DoD had not effectively implemented a system to track and assess the cost of the performance of functions under the competitive sourcing program…The overall costs and the estimated savings of the competitive sourcing program may be either overstated or understated. In addition, legislators and Government officials were not receiving reliable information to determine the costs and benefits of the competitive sourcing program and whether it is achieving the desired objectives and outcomes…”2 GAO: “[The Department of Labor’s (DoL)] savings reports…exclude many of the costs associated with competitive sourcing and are unreliable…(O)ur analysis shows that these costs can be substantial and that excluding them overstates savings achieved by competitive sourcing…DoL competition savings reports are unreliable and do not provide an accurate measure of competitive sourcing savings…Finally, the cost baseline used by DoL to estimate savings was inaccurate and misrepresented savings in some cases, such as when preexisting, budgeted personnel vacancies increased the savings attributed to completed competitions...3

b. resulted in the actual costs of conducting the privatization studies exceeding the guesstimated savings, and

GAO: “For fiscal years 2004 through 2006, we found that the Forest Service lacked sufficiently complete and reliable cost data to…accurately report competitive sourcing savings to Congress…(W)e found that the Forest Service did not consider certain substantial costs in its savings calculations, and thus Congress may not have an accurate measure of the savings produced by the Forest Service’s competitive sourcing competitions…Some of the costs the Forest Service did not include in the calculations substantially reduce or even exceed the savings reported to Congress.”4

c. included fundamental biases against the in-house workforce.

DoD IG: “…In this OMB Circular A-76 public/private competition—even though (DoD) fully complied with OMB and DoD guidance on the use of the overhead factor—the use of the 12 percent (in-house) overhead factor affected the results of the cost comparison and (DoD) managers were not empowered to make a sound and justifiable business decision…In the competitive sourcing process, all significant in-house costs are researched, identified, and supported except for overhead. There is absolutely no data to support 12 percent as a realistic cost rate. As a result, multimillion-dollar decisions are based, in part, on a factor not supported by data…Unless DoD develops a supportable rate or an alternative method to calculate a fair and reasonable rate, the results of future competitions will be questionable…”5

Until the implementation of the reforms listed below, AFGE believes that the suspensions on new A-76 reviews should be continued:

a. The establishment of a reliable system to track costs and savings from the A-76 process that has been implemented, tested, and determined to be accurate and reliable, over the long-term as well as the short-term.

b. Consistent with the law, the establishment of contractor inventories so that agencies can track specific contracts as well as contracts generally.

c. Consistent with the law, the development and implementation of plans to actively insource new and outsourced work, particularly functions that are closely associated with inherently governmental functions, that were contracted out without competition, and are being poorly performed.

d. Consistent with the law, the enforcement of government-wide prohibitions against direct conversions.

e. The development and implementation of a formal internal reengineering process that could be used instead of the costly and controversial A-76 process.

f. Revision of the rules governing the A-76 process to make it more consistent with agencies’ missions, more accountable to taxpayers, and more fair to federal employees.

1. Increase the minimum cost differential to finally take into account the often significant costs of conducting A-76 studies, including preliminary planning costs, consultants costs, costs of federal employees diverted from their actual jobs to work on privatization studies, transition costs, post-competition review costs, and proportional costs for agencies’ privatization bureaucracies (both in-house and out-house).6

2. Double the minimum cost differential for studies that last longer than 24 months—from the beginning of preliminary planning until the award decision.7

3. Eliminate the arbitrary 12% overhead charge on in-house bid.8

Fortunately, almost all efforts to repeal the suspensions against the OMB Circular A-76 privatization process ultimately failed. With respect to DoD specifically, FY12 NDAA conferees, on a bipartisan basis, decided that “the appropriate use of public-private competition is predicated on a sound planning process and the availability of accurate information, including the information that would be supplied by a compliant inventory.” DoD has said that an inventory will not be complete until 2014 because the department got off to such a late start. However, because of unnecessary delays caused by OMB’s refusal to give DoD an exemption for the department’s inventory effort from the Paperwork Reduction Act, compliance will likely be delayed by several months, perhaps even another year. AFGE has, repeatedly, told OMB that it is eager to discuss how the severe problems in the A-76 process might be fixed.

2. END THE “EFFICIENCY INITIATIVE’S” ONE-SIDED AND ARBITRARY CONTRAINTS ON THE SIZE OF THE CIVILIAN WORKFORCE

With the actual implementation of the “Efficiency Initiative”, DoD has reverted to its traditional approach of managing its overall workforce at the expense of the civilian workforce. The imposition of an arbitrary FY10 cap on the civilian workforce is contrary to the law and completely inconsistent with the imperative to manage civilian employees by budgets and workloads.

If there is work to be done and money to pay for that work to be done, DoD managers should not be prevented from using civilian employees simply because they are civilian employees. Instead, performance decisions should be made on the basis of the usual criteria of law, policy, risk, and cost. DoD claims that exceptions are allowed to the cap, mitigating against its intrinsically arbitrary and illegal nature. However, the process by which exceptions are sought and reviewed is as cumbersome as it is forbidding.

As DoD officials have acknowledged, this cap is forcing managers to use contractors instead of civilians because spending on contractors is uncapped. Declared one Army official in Congressional testimony from March 2012: “Cost-effective workforce management decisions ought to be based on allowing for the hiring of civilians to perform missions, rather than contractors, if the civilians will be cheaper. The lifting of the civilian workforce cap would restore this flexibility...”

Although not directing DoD to lift its wasteful civilian personnel cap, Congress did acknowledge that it was unfair and unproductive to cap just one of the Department’s three workforces. In the FY12 NDAA, Congress included a cap on service contracting costs, which removed the Department’s incentive to substitute contractors for civilians, with this justification: “(We) conclude that an across-the-board freeze on DoD spending for contract services comparable to the freeze that the Secretary of Defense has imposed on the civilian workforce is warranted to ensure that the Department maintains an appropriate balance between its civilian and contractor workforces and achieves expected savings from planned reductions to both workforces”.

In May, the Pentagon announced that it was extending the cap on civilian personnel through FY18. The Senate FY13 NDAA had included a one-year extension of the cap on service contract spending. However, because of contractor complaints, the extension of the cap was dropped in conference—leaving taxpayers with this disingenuous report language: “The conferees note that the level of authorized spending for contract services is addressed elsewhere in this conference report.” Of course, if that authorized level of spending on contract services had been a sufficient constraint, Congress wouldn’t have bothered to impose a specific cap. However, the prospect of that specific cap actually being enforced spurred contractor-friendly lawmakers to make it disappear with barely a trace.

If Congress wants sourcing decisions to be based on the merits, then either the cap on the size of the civilian workforce must be lifted or spending on service contracts must be subjected to the same constraint.

3. CAREFULLY CONSIDER THE CONSEQUENCES BEFORE UNDERTAKING NEW ROUNDS OF BRAC

AFGE-represented DoD facilities must prepare for the possibility of a future Base Realignment and Closure (BRAC) round, minimizing the risk for closure of specific facilities and enhancing the chance for survival in the event of a closure or realignment recommendation from DoD or additional scrutiny called by a Commission. It is important to align AFGE Locals with their communities and other interested parties so that the public understands the importance of the military facilities and government employees to their regions.

The political environment is not favorable for government employees, particularly for those working in DoD facilities. After a decade of war, DoD facilities face inevitable downsizing as we remove troops from Iraq and Afghanistan; the President has called for a 76% reduction in spending on overseas contingencies over a seven year period. To further complicate matters, Congress passed the Budget Control Act, mandating $487 billion in additional reductions in defense spending over a 10 year period with $259 billion in reductions coming in the first five years. Additionally, failure to reach agreement on a greater long term budget agreement has put DoD at risk for another half trillion dollar series of across the board spending cuts over the next ten years through sequestration. The Secretary of Defense has characterized sequestration as devastating to the US military force structure, personnel and infrastructure.

As part of the FY13 DoD budget request, the President requested that Congress authorize the use of the BRAC process with a goal of identifying savings that can be reinvested in higher priorities as soon as possible. Though Congress thwarted the President’s initiative in FY13, there is little doubt that the House and Senate will eventually approve a Pentagon requested BRAC in the relative near term.

AFGE Locals at DoD facilities should begin now to protect their jobs by strengthening the military value and the political position of their military bases. Regardless of protestations to the contrary, BRAC is political at every stage of the process, beginning with the development of the initial list of bases for closure proposed by the military services and ending with the vote of the BRAC Commission. On the other hand, there are factual, data driven components that are considered with significant weight when determining military value. The specific elements that will be considered in the military value of facilities will be unknown for some time; however, history has shown certain areas are always factors such as cost, efficiency and military necessity based on mission and unique capabilities. Other intangibles, such as quality of life, are always considered. AFGE members should unite to address these factors in a systematic manner.

There are several steps that union members can take to strategically prepare for BRAC to protect jobs and military bases from closure or major realignment. NVPs and other regional and national leaders should assist locals in identifying ways to showcase individual military facilities. Competition should be limited to non-AFGE represented bases to the greatest extent possible as DoD looks at military value from a cross-service perspective.

a. Energize and Organize Elected Officials: Your elected officials at every level of government will be important to saving your base from closure. All of the “easy” bases to close have been shuttered. No base is completely safe and many are extremely vulnerable. Elected officials can influence the Pentagon decision-makers and eventually BRAC Commissioners, but they need to be armed with facts rather than just good intentions – although they must have good intentions.

First, if you do not know your Member of Congress and your Senators in Washington, introduce yourselves and your military facility to him or her and the staff. If they are not naturally friendly towards unions, use your local elected officials to help you gain an entrance to their offices. Have your Member of Congress or Senators seek information on your projected workload, have them ask questions about the calculation of your rates if you handle industrial work; keep them involved with the military on behalf of your base. Encourage your elected officials to become involved with the Pentagon in support of your facility – this is especially important for those bases represented by Members who do not serve on one of the Defense Committees.

Get to know your local elected officials at the community, regional and state levels. Just as you will your Washington officials, make them aware of any potential threat to your facility as a result of a force structure change, reduction in personnel, weapons system cancellation or reduction, functional merger or other sentinel event. Have your local officials pass resolutions of support for your military facilities and the civilian and military personnel who work on base and transmit these resolutions to Washington. These elected officials should participate in any community hosted meetings with senior DoD personnel.

b. Partner with Your Local Chamber of Commerce and Prominent Civic Organizations: Military facilities have a huge multiplier effect in terms of the economy of any community. Depending on the type of facility, the ratio could be estimated as high as approximately 4:1. Federal facilities produce a strong middle class for most host communities and are greatly appreciated, as are the people who work at the base.

Local Chambers of Commerce generally recognize the strong economic impact of a military facility and the economic engine provided, creating many jobs in the private sector. Many Chambers have Military Liaisons totally focused on the military bases, while others have designated officials who regularly communicate with base leadership. AFGE Locals, if they have not already, should initiate a relationship with their local Chamber of Commerce to establish a unified grass-roots campaign to protect the local facility from downsizing and BRAC. Inform the Chamber of any impending personnel reductions, workload losses, and adverse events that impact civilian and/or military employees at the base. Work with the Chamber of Commerce to develop promotional material that can be used to brief senior DoD officials on the benefits of your facility. Encourage the Chamber to host higher command and Pentagon briefings on the surrounding area and your facility and participate in those meetings. Identify senior or highly decorated military members in your local area and have them begin networking on behalf of your facility. The same is true for retired senior civilian leadership. Seek support from local educational outlets, particularly universities and community colleges. They are particularly helpful in providing economic data on the benefit of the base to the local economy. Identify issues and allies from past BRAC rounds.

Encourage positive media attention regarding your facility, the work completed by the civilian workforce and the value of the base to the community. Newspaper articles are often included in the daily summary distributed throughout the Pentagon so having your local paper write positive stories has a constructive purpose. Public interest pieces work almost as well as hard news stories to produce a good reputation. Television news stories are also important for capturing the attention of your local politicians and the members of your community in terms of building popular support.

Get the community involved now in promoting the benefits to the military of your facility – they can help you fight BRAC actions aimed at your base.

c. Work with Management: First and foremost, military leadership tries to protect those bases that they view as good, solid bases with a content, reliable workforce and look for ways to close those that they feel are problematic. A reputation for poor labor-management relations is one of the fastest ways to have your facility targeted for closure. Both management and labor must work together to overcome difficulties for the sake of the workforce and the community.

Local facility management will be directed to supply information to higher command on specific elements related to military value, usually in formats that can be related to efficiency, cost, capability and unique capacity. Insight into the questions being asked and the answers submitted provide great assistance in preparing a facility to fight a base closure recommendation. Often questions are subject to some level of interpretation, requiring judgment in the answers. It is important to know the mindset of the local military leadership and positively influence it as we as answers to questions as much as possible. Strong, open communication is crucial since much of this information is conveyed to Commanding Officer and staff in a confidential format. Discretion is a virtue.

Therefore, now is the time for AFG Locals to build management relationships with both senior career and military leadership.

d. Maximize Strengths and Minimize Weaknesses: Encourage quality work and efficiency on the part of union members. Their jobs may depend on the reputation of their work. As much as it is up to you, increase your competitive edge and reduce your rates in working capital funds if that applies to your Local. Know your competitors both in industry and the military and do a better job than they do. Develop your best arguments for saving your facility. Educate AFGE district personnel of the importance of your facility and the threat of BRAC. Do you part as individuals to save your base.

AFGE Locals can and must take positive action now to minimize the impact and size of BRAC actions by strategically addressing specific elements where senior DoD officials have the ability to make choices between facilities and/or programmatic decisions. The actions with the greatest probability of success in reducing the number of civilian personnel job losses at DoD are those that are taken in advance of any adverse decision. From a historical perspective, military facilities enjoying the greatest across-the-board unity between all elements of the community and political spectrum are the ones who have been the most likely to survive a BRAC threat. Political activism and early involvement by base employees have been critical elements of success. AFGE Locals can and should take steps now to reinforce their facilities and save jobs.

4. ENFORCE PROHIBITIONS AGAINST DIRECT CONVERSIONS

Despite the extensive use of the Office of Management and Budget (OMB) Circular A-76 privatization process (and the resulting proof of the superiority of in-house workforces—federal employees won 80% of the time during the Bush Administration, despite a process that independent observers insisted is biased against them), work is still contracted out without any public-private competition, i.e., without any proof that giving work to contractors is better for taxpayers or better serves those Americans who depend on the federal government for important services.

The Congress, on a bipartisan basis, has, repeatedly, prohibited agencies from perpetrating “direct conversions”—the term used to describe instances in which agencies give work performed by federal employees to contractors without first conducting full cost comparisons. This prohibition has applied regardless of the number of positions involved. There are arguable but not definitively proven exceptions for work associated with utilities and housing, which can be privatized under their own statutes.

In December 2011, DoD issued guidance to its managers to guard against direct conversions. This guidance was not issued to protect federal employees, but because of concern “that the Department not become overly reliant on contracted services.” As downsizing goes forward, DoD’s guidance warns that “we must be particularly vigilant to prevent the inappropriate conversion of work to contract.” (Although the GAO, in a highly controversial decision, invented an exception to the direct conversion prohibition for non-appropriated fund (NAF) employees, this exception is not recognized by DoD’s guidance. In fact, the House Armed Services Committee directed the Department to clarify its guidance to ensure that it does apply to NAF employees.)

However, many managers don’t know these prohibitions exist and those who do know believe that there are exceptions which in fact don’t exist. In other instances, management knows but it doesn’t care. It is imperative that AFGE, through its Locals, Caucuses, and Councils spread the news. For the first time in the history of the Republic, there is a statutory ban on direct conversions in DoD and the department has issued guidance to carry out that prohibition. In most instances, any time work last performed by civilian employees is given to a contractor without going through a formal cost comparison process it is a direct conversion.

Although not always successful, AFGE has fixed direct conversions through three options:

a. Administratively: working with the department, particularly the Office of Personnel and Readiness, which is responsible for enforcing the direct conversion guidance; b. Legislatively: working with lawmakers who represent the affected installations as well as those who serve on committees of jurisdiction over the department; and c. Judicially: filing bid protests with the GAO.

In some instances, management may attempt to convert our work to performance by military personnel, a workforce sometimes referred to as “Borrowed Military Manpower”. Because of their superior compensation packages, military personnel are usually considered to be twice as expensive as civilian employees. Nevertheless, the “Efficiency Initiative”, with its cap on the civilian workforce, encourages managers to substitute military personnel (as well as contractors) for civilian personnel, regardless of cost or adverse impact on readiness.

5. THROUGH INSOURCING, REQUIRE AGENCIES TO GIVE FEDERAL EMPLOYEES OPPORTUNITIES TO PERFORM NEW AND OUTSOURCED WORK

After sixteen years of indiscriminate privatization, DoD attempted to rebalance its workforce through targeted insourcing during parts of 2009 and 2010, both of functions which are inappropriate for contractor performance and functions which can be performed more efficiently in-house. DoD reported that in FY10 insourcing generated significant savings, $900 million, and brought in-house work performed by thousands of contractors that was actually too important or sensitive to privatize. Ultimately, 17,000 civilian personnel were added to handle insourced work. Insourcing continued in FY11, although final data is not yet available. Insourcing is just common sense. Given the results of the 2011 study by the Project on Government Oversight (POGO), which compared the costs of federal employees and contractors, taxpayers may well wonder why any Pentagon official or lawmaker would want to shield from scrutiny the defense contractors who are responsible for so much documented waste, fraud, and abuse. According to POGO’s study—Bad Business: Billions of Taxpayer Dollars Wasted on Hiring Contractors—“on average, contractors charge the government almost twice as much as the annual compensation of comparable federal employees. Of the 35 types of jobs that POGO looked at in its seminal report—the first report to compare contractor billing rates to the salaries and benefits of federal workers—it was cheaper to hire federal workers in all but just two cases.” DoD’s brief but successful insourcing effort was severely compromised with the imposition of an onerous cap on the size of the civilian workforce, beginning in August 2010, which makes it extremely difficult to bring work back in-house no matter how much money can be saved or even if the work is inherently governmental. Deliberately misconstruing remarks by former Secretary Robert Gates—who had earlier made his own view about the high costs of service contractors very clear when he told The Washington Post that civilian personnel are 25% cheaper—contractors and their ever-obliging cheerleaders in what passes for the trade press declared insourcing a failure.

Thanks in large part to Senator Claire McCaskill (D-MO), we now know that insourcing generated immense savings for DoD and that there ultimately is no way for the Department, which has held civilian personnel costs steady while allowing service contract costs to more than double over the last ten years, to adjust its spending to unshakable budgetary and geopolitical realities without the extensive use of insourcing.

A GAO report from February 2013, which put his remark in the proper context, showed that Gates was actually complaining about contracting out, not contracting in: “In August 2010, the Secretary of Defense stated that he was not satisfied with the department's progress in reducing over-reliance on contractors. Representatives of OUSD (P&R) and the Office of the Under Secretary of Defense (Comptroller) told us that although DOD avoided $900 million in costs for contracted support services in fiscal year 2010 due to the budget decision to reduce funds associated with in-sourcing, total spending across all categories of service contracts increased in fiscal year 2010 by about $4.1 billion.” In other words, the significant savings from DoD’s modest insourcing effort could not offset the Department’s ever-increasing reliance on service contractors.
As the Department patiently explained to GAO: “Insourcing has been, and continues to be, a very effective tool for the Department to rebalance the workforce, realign inherently governmental and other critical work to government performance (from contract support), and in many instances to generate resource efficiencies."

However, it was not until Senator McCaskill’s March 29, 2013, Contracting Oversight Subcommittee hearing that it became clear just how successful insourcing had been. The Army, which had conducted the most robust insourcing effort, reported savings from between 16 and 30 percent. More significantly, “During the much smaller period from FY08 to 10 when the Department instituted an active insourcing program in conjunction with its service contract pre-award approval process and contractor inventory review process, contract service obligations not identified to Overseas Contingency Operations funding decreased from $51 billion in Fiscal Year 2008 to $36 billion in Fiscal Year 2010.” The increase in civilian personnel costs from insourcing was slight in comparison with the steep reduction in service contract costs.
Unfortunately, the Department reverted in FY11 to its historical pattern during budgetary retrenchments of managing the civilian workforce by arbitrary constraints—ruthlessly cutting the in-house staff back down to FY10 levels, which, in a cruel irony, effectively punishes components which successfully insourced—while imposing no comparable constraints on service contract spending. Additional insourcing became extremely difficult—not because savings cannot be generated, not because funding is unavailable, but because an arbitrary limitation has been imposed on the number of civilian workers the Department can employ through FY18. In the Army for example, any additional insourcing requires the Secretary’s personal approval. No special permission is required in order to add new contracts or expand on existing contracts. The cap on the Army’s civilian workforce is so onerous that GAO reported this year that the service is often unable to insource inherently governmental functions. Even when taking on new work, the Army must eliminate funding for comparable numbers of positions elsewhere. Obviously, there are no comparable requirements to cut a dollar in service contracting for every new dollar the Army spends on service contracting.

Contractor groups have tried to discredit DoD’s costing methodology in order to explain away insourcing’s success. Given that it was devised by the Cost Assessment and Program Evaluation (CAPE) office, which is instrumental in the Pentagon’s flawed scheme to slash the cheaper and smaller civilian workforce while leaving service contractors almost completely unscathed, it is difficult to accuse CAPE of an anti-contractor bias. Initially, contractor groups insisted that DoD’s costing methodology left out civilian employees’ long-term health care and retirement costs. When that was proven to be manifestly wrong, the Center for Strategic and International Studies (CSIS) was commissioned to trash DoD’s costing methodology. However, even the most pro-contractor lawmakers have found it difficult to embrace CSIS’ paid-to-order research.
AFGE has its problems with the methodology DoD uses to promote outsourcing. The difference is that our concerns have been corroborated by GAO and the Inspector General—giving rise to numerous statutory prohibitions against the use of the now infamous OMB Circular A-76 privatization process. Contractors have shied away from asking truly independent third parties to provide their assessments of DoD’s costing methodology. However, in its own assessment earlier this year, the only problems GAO could find with DoD’s much-scrutinized insourcing effort were occasional discrepancies involving information collection, but none that would cast doubt on the integrity of insourcing decisions and all of which were common to procurement generally. Report language in the FY13 NDAA assigned GAO to determine the suitability of DoD’s costing methodology.
In 2013, AFGE expects contractors to become even more aggressive in trying to weaken or even repeal insourcing laws. A House floor amendment to the FY13 NDAA that would have, effectively, killed DoD’s insourcing effort failed, in large part because of the Pentagon’s strong opposition.

6. PRESERVE AND PROTECT DOD’S INDUSTRIAL FACILITIES

Congress and the Administration must preserve our organic industrial base—our nation’s government-owned and government-operated depots, arsenals and ammunition plants—as DoD shifts military strategy and embarks on a major drawdown of force structure. The Administration’s stated commitment to preserve the defense industrial base must extend to the organic industrial base. It is vital that the House and Senate reaffirm Title 10 statutory provisions that assure the viability of an organic logistics and fabrication capability necessary to ensure military readiness.

AFGE agrees with long-held public policy that it is essential to the national security of the United States that DoD maintain an organic capability within the department, including skilled personnel, technical competencies, equipment, and facilities, to perform depot-level maintenance and repair of military equipment, as well as production/fabrication of same at our arsenals and ammunition plants, in order to ensure that the Armed Forces of the United States are able to meet training, operational, mobilization, and emergency requirements without impediment.

The organic capability to perform depot-level maintenance, repair and production/fabrication of military equipment and ammunition must satisfy known and anticipated core maintenance and repair scenarios as well as retain key manufacture capabilities across the full range of peacetime and wartime scenarios.

The statutes that require this core capability and others, such as designation of a 50% floor for depot maintenance work by civilian employees of DoD, and protection of the organic industrial manufacturing base through the Arsenal Act, have kept our nation secure and our core defense skills protected and should continue to be supported and strengthened.

Changes in the FY13 NDAA re-established long-held depot statutes defining depot maintenance and core. This ensured that key logistics capabilities continued to be considered core and that the definition of depot maintenance was not limited arbitrarily to reduce the scope of work that should be included in the 50/50 calculations. Most importantly, the language eliminates the ability to waive the requirement to establish core in organic depots. Additionally, Congress continued to require DoD to submit annual reports identifying core requirements and plans for funding and allocating workload to meet core requirements.

Taken together, these measures should secure workload and government jobs at DoD industrial facilities. While the legislative provisions are not perfect and should be amended to ensure establishment of core within a date certain, they certainly pave the way for greater accountability at DoD and provide Congress with key monitoring tools to appropriately protect civilian government jobs and our national defense posture. The reporting provisions provide a great point for AFGE to begin working in advance to save defense jobs around the nation.

For FY14 Congress must designate a core workload for arsenals and ammunition plants or at a minimum provide enforcement tools for the Arsenal Act to strengthen the manufacturing arm of our organic industrial base. Congress should clarify the requirement to establish core in depots within 4 years without waiver.

Further, AFGE opposes establishment of an outside commission or panel of private industry analysts to review Chapter 146 of Title 10 for a major overhaul because of the inherent lack of impartiality to be found on such a panel.

AFGE also opposes DOD and the military services using sequestration, the Continuing Resolution and the mandatory civilian personnel cuts as an excuse to breach the 50/50 depot maintenance law.

In summary, an analysis of historical data reveals that organic depot level maintenance, as well as arsenal and ammunition plant manufacturing capability may provide the best value to the American taxpayer in terms of cost, quality and efficiency.

To preserve our military readiness, the department should sustain the organic capability and capacity to maintain and repair equipment, including new weapons systems within four years of Initial Operating Capability, associated with combat, combat support, combat service support, and combat readiness training.

To ensure the efficient use of organic maintenance, repair and production capacity, as well as best value to the taxpayer, the department must effectively utilize its organic facilities at optimal capacity rates. Not only does this strategy reduce costs, it returns taxpayer dollars to the community as economic multipliers for industrial jobs are almost double those for almost any other sector, creating on average three jobs for every one – certainly a priority in this economic climate.

Further, the department must sustain a highly mission-capable, mission-ready maintenance, arsenal and ammunition plant workforce; therefore, depot, arsenal and ammunition plant personnel must be managed to funding levels and not by artificial civilian end-strength constraints.

AFGE believes it is important to recall that our organic depots and industrial facilities are essential to ensuring the success of the military warfighting mission. During downsizing, DoD must protect those functions necessary to ensure readiness and defend the United States and our allies during periods of armed conflict. These government-owned, government-operated, facilities, employing government personnel, meet defense requirements effectively and efficiently; are highly flexible and responsive to changing military requirements and priorities; produce the highest quality work on critical systems; meet essential wartime surge demands; promote competition; and sustain critically needed institutional expertise.
_________________________________________

Government Accountability Office, Department of Labor: Better Cost Assessments and Departmentwide Performance Tracking Are Needed to Manage Competitive Sourcing Program (GAO-09-14).

2 Department of Defense Inspector General, DoD Reporting System for the Competitive Sourcing Program (D-2006-028).

3 Government Accountability Office, Department of Labor: Better Cost Assessments and Departmentwide Performance Tracking Are Needed to Manage Competitive Sourcing Program (GAO-09-14).

4 Government Accountability Office, Forest Service: Better Planning, Guidance, and Data are Needed to Improve Management (GAO-08-195).

5 Department of Defense Inspector General, Public/Private Competition for the Defense Finance and Accounting Service Military Retired and Annuitant Pay Functions (D-2003-056).

6 It is accepted in the A-76 circular that it makes little sense to shift work back and forth without at least a guesstimate that savings will be more than negligible. “The conversion differential precludes conversions based on marginal estimated savings…” Unfortunately, the conversion differential--the lesser of 10% of agency labor costs or $10 M, which is added to the non-incumbent provider—captures only “non-quantifiable costs related to a conversion, such as disruption and decreased productivity”. See OMB Circular A-76, Attachment B.

7 The biggest selling point for the revised A-76 circular was that standard privatization studies were supposed to last no longer than a year. Of course, OMB insists that a standard competition has not started until it has been formally announced, even though preliminary planning, the work conducted on an A-76 study before formal announcement, can last several years. Even excluding preliminary planning A-76 studies now routinely take longer 12 months. In fact, OMB reports that the average A-76 study takes 13.6 months to complete. COMPETITIVE SOURCING: Report on Competitive Sourcing Results Fiscal Year 2007, May 2008, p. 9. Worse, the length is gradually increasing over time. In other words, the more the A-76 process is being used, the longer it is taking. The A-76 circular is based on standard competitions lasting no longer than a year except in unusual circumstances. Clearly, the conversion differential should be increased to take into account the growing length of A-76 studies.

8 All in-house bids are slapped with an overhead charge, which works out to 12% of personnel costs. This significant impediment to in-house bids should be eliminated. As the Department of Defense Inspector General reported about the now infamous A-76 privatization review at the Defense Finance and Accounting Service, “We do not agree that the standard factor for overhead costs is a fair estimate for calculating overhead. We believe that DoD must develop a supportable rate or alternative methodologies that permit activities to compute reasonable overhead cost estimates.” “Public-Private Competition for the Defense Finance and Accounting Service Military Retired and Annuitant Pay Functions”, Report D-2003-056 (March 2003). Neither reform has been undertaken. Consequently, most if not all in-house bids are unfairly biased against federal employees.

Federal Prisons Summary

Over the past several years, the Bureau of Prisons (BOP) correctional institutions have become increasingly dangerous places to work. The savage murder of Correctional Officer Jose Rivera on June 20, 2008, by two prison inmates at the United States Penitentiary in Atwater, CA, and the hundreds of vicious inmate-on-staff assaults that have occurred at various BOP facilities since that murder illustrate that painful reality.

The American Federation of Government Employees (AFGE) strongly urges the Obama Administration and the 113th Congress to:

1. Increase federal funding of BOP to remedy the serious correctional officer understaffing and prison inmate overcrowding problems that are plaguing BOP prisons.

2. Support allowing BOP correctional officers who work in highly dangerous areas of BOP prisons to routinely carry pepper spray in case situations arise where they must defend themselves if physically attacked by dangerously violent inmates.

3. Support the Federal Prison Industries (FPI) prison inmate work program.

4. Continue the existing prohibition against the use of federal funding for public-private competition under OMB Circular A-76 for work performed by federal employees of BOP and FPI.

5. Prevent BOP from meeting additional bed space needs by incarcerating prison inmates in private prisons.

6. Oppose any effort to statutorily redefine the term “law enforcement officer” for pay and retirement purposes to exclude BOP prison staff.

7. Exempt federal law enforcement officers, including BOP correctional officers and staff, who separate from federal government service after age 50 from the present law’s 10% additional tax penalty for early withdrawals from the Thrift Savings Plan (the third component of the Federal Employees Retirement System or FERS). Discussion

1. Increase federal funding of BOP to remedy the serious correctional officer understaffing and prison inmate overcrowding problems that are plaguing BOP prisons.

Nearly 218,000 prison inmates are confined in BOP correctional institutions today, up from 25,000 in 1980, 58,000 in 1990, and 145,000 in 2000. About 81% - or 176,392 – of the inmate population is confined in BOP-operated prisons while 19% - or 41,477 – is managed in private prisons and residential reentry centers. By the end of FY 2013, it is expected there will be over 222,000 inmates incarcerated in BOP institutions nationwide.

This explosion in the federal prison inmate population is the direct result of Congress approving stricter anti-drug enforcement laws involving mandatory minimum sentences in the 1980s, as documented in the History of Mandatory Minimums, a study produced by the Families Against Mandatory Minimums Foundation (FAMM).

* The Comprehensive Crime Control Act of 1984 created a mandatory 5-year sentence for using or carrying a gun during a crime of violence or a drug crime (on top of the sentence for the violence itself), and a mandatory 15-year sentence for simple possession of a firearm by a person with three previous state or federal convictions for burglary or robbery. * The 1986 Anti-Drug Abuse Act established the bulk of drug-related mandatory minimums, including the five- and 10-year mandatory minimums for drug distribution or importation, tied to the quantity of any “mixture or substance” containing a “detectable amount” of the prohibited drugs most frequently used today. * The Omnibus Anti-Drug Abuse Act of 1988 created more mandatory minimums that were targeted at different drug offences. At one end of the drug distribution chain, Congress created a mandatory minimum of five years for simple possession of more than five grams of “crack” cocaine. (Simple possession of any amount of other drugs – including powder cocaine and heroin – remained a misdemeanor with a mandatory 15-day sentence required only for a second offense.) At the other end, Congress doubled the existing 10-year mandatory minimum for anyone who engages in a continuing criminal enterprise, requiring a minimum 20-year sentence in such cases.

The number of federal correctional officers who work in BOP-operated prisons, however, is failing to keep pace with this tremendous growth in the prison inmate population. The BOP system is staffed at an 89% level (35,839 of 40,279 authorized positions were filled), as contrasted with the 95% staffing percentage levels in the mid-1990s. This 89% staffing level is below the 90% staffing level that BOP believes to be the minimum staffing level for maintaining the safety and security of BOP prisons. In addition, the current BOP inmate-to-staff ratio is 4.82 inmates to 1 staff member, as contrasted with the 1997 inmate-to-staff ratio of 3.7 to 1.

At the same time, prison inmate overcrowding is an increasing problem at BOP institutions despite the activation of new prisons over the past few years. The BOP prison system today is overcrowded today by about 37%, up from 31.7% as of January 1, 2000. Inmate overcrowding is of special concern at higher security institutions – with 50% overcrowding at high security prisons and 39% at medium security institutions. By the end of FY 2013, it is estimated the BOP system will be overcrowded by 40%.

These serious correctional officer understaffing and prison inmate overcrowding problems are resulting in significant increases in prison inmate assaults against correctional officers and staff. Illustrations of this painful reality include: (1) the savage murder of Correctional Officer Jose Rivera on June 20, 2008, by two prison inmates at the United States Penitentiary in Atwater, CA; (2) the brutal stabbing of a correctional officer on November 1, 2009, by a prison inmate at the United States Penitentiary in Lewisburg, PA; and (3) the hundreds of vicious inmate-on-staff assaults that have occurred at various BOP facilities since the murder of Correctional Officer Rivera.

AFGE has long been concerned about the safety and security of the correctional officers and staff who work at BOP institutions. But the significant increase in prison inmate assaults against correctional officers and staff has made it clear that the BOP correctional officer understaffing and prison inmate overcrowding problems must be solved.

Therefore, AFGE strongly urges the Obama Administration and the 113th Congress to:

* Increase federal funding of the BOP Salaries and Expenses account so BOP can hire additional correctional staff to return to the 95% staffing percentage levels of the mid-1990s. * Increase federal funding of the BOP Buildings and Facilities account so BOP can build new correctional institutions and renovate existing ones to reduce inmate overcrowding to at least the 31.7% level of the late-1990s.

2. Support allowing BOP correctional officers who work in highly dangerous areas of BOP prisons to routinely carry pepper spray in case situations arise where they must defend themselves if physically attacked by dangerously violent inmates.

On June 5, 2012, BOP announced that the agency had decided to conduct a one-year pilot program to determine if allowing correctional staff to routinely carry oleoresin capsicum spray – commonly known as “pepper spray” – while on duty will improve the safety of correctional staff, prison inmates, and others.

This pepper spray pilot program:

* Is being conducted at seven U.S. penitentiaries: USP Coleman I (FL), USP Coleman II (FL), USP Florence (CO), USP Lee County (VA), USP Lewisburg (PA), USP Pollock (LA), and USP Atwater (CA). * Authorizes correctional staff to routinely carry pepper spray at the following designated posts: Operations, Activities and Special Housing Units (SHU) Lieutenants; compound officers; housing unit officers; corridor/movement officers; SHU #1 officer; and SHU recreation officer. * Requires correctional staff to complete appropriate training before being authorized to routinely carry pepper spray while on duty.

AFGE is extremely pleased that BOP decided to conduct this pepper spray pilot program. It is an important first step toward a new BOP policy that will allow correctional staff who work in highly dangerous areas to routinely carry pepper spray in case situations arise where they must protect themselves, inmates, and others when physically attacked by violent prison inmates.
This pepper spray pilot program is based on – and the result of - the AFGE-supported legislation in the 112th Congress (H.R. 1175 introduced by Rep. Dennis Cardoza, D-CA, and S. 1645 introduced by Senator Bob Casey, D-PA) that directed BOP to conduct a pilot program to determine the effectiveness of BOP correctional officers routinely carrying pepper spray while on duty.

For several years, AFGE has been urging BOP to institute a new pepper spray policy that would allow federal correctional officers who work in highly dangerous housing units and other high security areas of BOP prisons to routinely carry pepper spray in case situations arise where they must defend themselves if physically attacked by dangerously violent inmates.

Under current BOP policy, federal correctional officers are not allowed to routinely carry pepper spray in BOP prisons. Instead, prison wardens (or designated officials) must authorize pepper spray utilization before correctional officers can use it to quell an emergency situation. Pepper spray is stored in specific locations throughout the prisons, such as in secure control rooms, watchtowers in the prisons’ yards, or in the prisons’ armories outside the secure perimeter.

The problem, however, is that in situations where aggressively dangerous inmates, who often have home-made lethal weapons, are physically attacking correctional officers, there is little or no time for the warden to authorize the use of pepper spray and get it to the endangered officers so they can protect themselves. The correctional officers are left to defend themselves with the two things they are authorized to carry: keys and a walkie-talkie radio.

Unfortunately, BOP management has been reluctant to allow correctional officers to carry pepper spray while on duty, relying on the following four arguments – arguments with which AFGE strongly disagrees.

(1) Communication argument: According to BOP officials, correctional officers are not allowed to routinely carry pepper spray because BOP believes in the importance of officers communicating with inmates to ensure officer safety. The agency believes that carrying pepper spray would impede officers’ communication with inmates – and increase the level of prison violence - because (a) the officers would be more likely to use the pepper spray to prevent an inmate from engaging in dangerous misconduct than talk with the inmate, or (b) the inmate would perceive correctional officers carrying pepper spray as more threatening and therefore would be less willing to engage in communication with officers.

AFGE, however, believes this “officer-inmate communication” policy totally ignores the current reality at BOP institutions. The level of violence inside BOP institutions is already increasing – and not because correctional officers are not attempting to communicate with prison inmates. The violence level is increasing because of the serious correctional officer understaffing and prison inmate overcrowding problems – and because correctional officers are being asked to control offenders who are deliberately non-communicative, more aggressively violent, and often gang-affiliated. In addition, AFGE believes this “officer-inmate communication” policy ignores the information in a BOP Executive Staff Paper, dated March 7, 2003. According to that paper, the Colorado, Illinois, and Texas State Departments of Corrections - three of the many states that allow their prison staff to routinely carry pepper spray - reported to BOP in 2003 that the ability of their staff to immediately use pepper spray decreased the need for physical restraint techniques, enhanced inmate compliance to staff warnings and commands, and resulted in an overall and significant reduction in injuries to both staff and inmates.

(2) “Used against officer” argument: BOP argues that correctional officers should not routinely carry pepper spray because it could be taken from the officer by an inmate and then used against him or her by that inmate.

AFGE believes this “used against officer” argument ignores one of the reasons why the BOP Executive Staff Paper (March 7, 2003) recommended providing correctional officers with pepper spray rather than expandable batons. One of the advantages of pepper spray use that was detailed in that paper was: “If an inmate gains control of the [pepper spray] and uses it on staff, there is no permanent harm to the staff member.” By contrast, “if an inmate gains control of the expandable baton and uses it on staff, there could be serious permanent physical harm to the staff member.”

(3) Regulatory argument: BOP argues that 28 CFR 552.25 - Use of chemical agents or non-lethal weapons is the reason why the agency cannot allow correctional officers to carry pepper spray. Here is that CFR section: TITLE 28--JUDICIAL ADMINISTRATION CHAPTER V--BUREAU OF PRISONS, DEPARTMENT OF JUSTICE PART 552_CUSTODY--Table of Contents Subpart C_Use of Force and Application of Restraints on Inmates Sec. 552.25 Use of chemical agents or non-lethal weapons. The Warden may authorize the use of chemical agents or non-lethal weapons only when the situation is such that the inmate: (a) Is armed and/or barricaded; or (b) Cannot be approached without danger to self or others; and (c) It is determined that a delay in bringing the situation under control would constitute a serious hazard to the inmate or others, or would result in a major disturbance or serious property damage. [54 FR 21394, May 17, 1989. Redesignated and amended at 59 FR 30469, 30470, June 13, 1994] [Emphasis added]

AFGE believes that 28 CFR 552.25 does not support the BOP position regarding correctional officers carrying pepper spray. The important key is the word “use” in the first sentence. 28 CFR 552.25 restricts the active “use” of pepper spray - that is, the “putting into action” of pepper spray – to situations where an inmate is armed and/or barricaded or cannot be approached without danger to the correctional officer, and when a delay in restoring order would result in a major disturbance or serious property damage. In other words, this regulation’s intent is to prevent correctional officers from actively spraying an inmate with pepper spray in less-than-dangerous situations – that is, in situations where the inmate is not armed or can be approached without any danger to the correctional officer, and when a delay in restoring order would not result in a major disturbance or serious property damage.

However, 28 CFR 552.25 says absolutely nothing about the passive carrying of pepper spray. Thus, contrary to BOP’s position, this section does not preclude BOP from authorizing correctional officers to carry pepper spray. And it certainly does not preclude BOP from authorizing a correctional officer to carry pepper spray in highly dangerous prison areas - just in case the correctional officer must actively “use” pepper spray in situations where an armed inmate is physically attacking the correctional officer, and when a delay in restoring order would result in a major disturbance or serious property damage.

(4) Cost argument: BOP argues that the agency cannot afford the cost of providing pepper spray to its correctional officers because the White House and Congress failed during the FY 2001- 2009 time period to provide BOP with sufficient funding. As a result, BOP’s principal focus now is on dealing with the correctional worker understaffing and prison inmate overcrowding problems – not providing pepper spray to its correctional officers.

AFGE is totally cognizant of the BOP’s funding problems. We have been actively lobbying the Obama Administration and the Congress to substantially increase funding for BOP.

However, AFGE believes the argument that BOP cannot afford the cost of supplying pepper spray to its correctional officers is a bit overdone. A brief perusal of the Internet reveals that pepper spray devices cost only between $10 and $15. Thus,

* The cost of providing pepper spray to the 630 correctional officers who work in the dangerous housing units (including the segregation units) and compound areas at the 21 high-security United States Penitentiaries would range between $6,300 and $9,450. * The cost of providing pepper spray to the 6,300 correctional officers and staff who work at the 21 high-security United States Penitentiaries would range between $63,000 and $94,500. * The cost of providing pepper spray to each and every one of the nearly 16,000 correctional officers who in the BOP prison system would range between $160,000 and $240,000.

In addition, it should be noted that the total number of pepper spray devices that must be purchased – and the attendant costs – would be greatly reduced by the number of such devices already stored today in BOP prisons’ armories.

3. Support the Federal Prison Industries (FPI) prison inmate work program.

The increasingly violent and dangerous environment in which BOP correctional officers and staff work is the primary reason why AFGE strongly supports the FPI prison inmate work program.

The FPI prison inmate work program is an important management tool that federal correctional officers and staff use to deal with the huge increase in the BOP prison inmate population. It helps keep about 13,500 prison inmates productively occupied in labor-intensive activities, thereby reducing inmate idleness and the violence associated with that idleness. It also provides strong incentives to encourage good inmate behavior, as those who want to work in FPI factories must maintain a record of good behavior and must have completed high school or be making steady progress toward a General Education Degree (GED).

In addition, the FPI prison inmate work program is an important rehabilitation tool that provides federal inmates an opportunity to develop job skills and values that will allow them to reenter – and remain in – our communities as productive, law-abiding citizens. The Post-Release Employment Project (PREP), a multi-year study of the FPI prison inmate work program carried out and reported upon in 1996 by William Saylor and Gerald Gaes, found that the FPI prison inmate work program had a strongly positive effect on post-release employment and recidivism. Specifically, the study results demonstrated that:

* In the short run (i.e., one year after release from a BOP institution), federal prison inmates who had participated in the FPI work program (and related vocational training programs) were: (1) 35% less likely to recidivate than those who had not participated, and (2) 14% more likely to be employed than those who had not participated.

* In the long run (i.e., up to 12 years after release from a BOP institution), federal prison inmates who participated in the FPI work program were 24% less likely to recidivate than those who had not participated in the FPI work program. (PREP: Training Inmates Through Industrial Work Participation, and Vocational and Apprenticeship Instruction, by William Saylor and Gerald Gaes, Office of Research and Evaluation, Federal Bureau of Prisons, September 24, 1996.)

Unfortunately, over the past several years, the FPI prison inmate work program has experienced a significant decline in its ability to remain financially self-sustaining while providing “employment for the greatest number of inmates in the United States penal and correctional institutions who are eligible to work as is reasonably possible.” (18 U.S.C. 4122) For example, FPI has experienced a:

* Significant decline in FPI sales revenues: While FPI in FY 2009 had sales revenues of $889,355,000 in FY 2009, it only had revenues of $745,423,000 in FY 2011 – a decline of $143,932,000 or 16% over three years.

* Significant closing and downsizing of FPI factories: On July 15, 2009, FPI closed factory operations at 14 BOP prisons and downsized operations at four other BOP prisons. The next year on July 13, 2010, FPI closed 12 more factories and downsized three. And on September 7, 2011, FPI announced that it would close and downsize 12 additional factories at 10 different BOP prisons. According to then-FPI Chief Operating Office Paul Laird, these closings and downsizings were cost control actions taken to bring production capacity and expenses in line with FPI’s level of business.

* Significant decline in the number of prison inmates employed by FPI: While the FPI program employed 18,972 inmates in FY 2009, it employed only 14,200 at the end of FY 2011 and 13,466 in April 2012.

These significant declines are the result of the various limitations imposed by Congress and the FPI Board of Directors on FPI’s mandatory source authority relating to DoD’s and federal civilian agencies’ purchases from FPI. But of the many imposed limitations, Section 827 in the National Defense Authorization Act for FY 2008 (P.L. 110-181) – which is statutorily 10 U.S.C. 2410n - is probably the most significant impediment to the FPI prison inmate program.

The FPI Board of Directors in 2003 administratively ended the application of mandatory source authority for those FPI-made products where FPI had a share of the Federal market that was greater than 20%. But Section 827 took a much more stringent approach, ending the application of the mandatory source authority with regard to DoD purchases of FPI-made products where FPI’s share of the DoD market for those products was greater than 5%. Initial analyses of the effect of this reduction of the “significant market share” from 20% to 5% projected a loss of up to $241 million in FPI sales revenues and 6,500 FPI prison inmate jobs.

As can be seen, FPI is in desperate need of new inmate work program authorities. That is why AFGE was pleased when Congress included Section 221 in the FY 2011 Commerce-Justice-Science Appropriations bill (P.L. 112-55). This section extended – for the first time - the Prison Industry Enhancement (PIE) inmate employment program to the federal BOP system. The PIE program was created by Congress in 1979 to encourage state prison systems to establish employment opportunities for inmates that approximate private-sector work opportunities. The program is designed to place inmates in a realistic work environment, pay them the prevailing local wage for similar work, and enable them to acquire marketable skills to increase their potential for successful rehabilitation and meaningful employment upon release.

AFGE also was pleased that Section 221 authorized FPI to carry out pilot “off-shore repatriation” projects to produce items not currently produced in the United States. It is believed that FPI, if allowed to enter into partnerships with private businesses, could bring lost production back into the United States while providing BOP prison inmates with opportunities to learn skills that will be marketable after their release.

4. Continue the existing prohibition against the use of federal funding for public-private competition under OMB Circular A-76 for work performed by federal employees of BOP and FPI.

The FY 2012 Consolidated Appropriations Act (P.L. 112-55), which contained the FY 2012 Commerce-Justice-Science (CJS) Appropriations bill, includes a general provision - Section 212 - to prohibit the use of FY 2012 funding for a public-private competition under OMB Circular A-76 for work performed by federal employees of the BOP and FPI. Here is the exact language:

“Sec. 212. None of the funds appropriated by this Act may be used to plan for, begin, continue, finish, process, or approve a public-private competition under the Office of Management and
Budget Circular A-76 or any successor administrative regulation, directive, or policy for work performed by employees of the Bureau of Prisons or of Federal Prison Industries, Incorporated.” *

AFGE strongly urges the Obama administration and the 113th Congress to include the Section 212 language in the FY 2014 CJS Appropriations bill because:

(a) Competing these BOP and FPI employee positions would not promote the best interests or efficiency of the federal government with regard to ensuring the safety and security of federal BOP prisons. Federal correctional officers and other federal employees who work for BOP and FPI are performing at superior levels. It therefore would be ill-advised to compete their positions merely to meet arbitrary numerical quotas.

(b) Various studies comparing the costs of federally operated BOP prisons with those of privately operated prisons have concluded – using OMB Circular A-76 cost methodology – that the federally operated BOP prisons are more cost effective than their private counterparts. For example, a study comparing the contract costs of services provided by Wackenhut Corrections Corporation (now The Geo Group) at the Taft Correctional Institution in California with the cost of services provided in-house by federal employees at three comparable BOP prisons (Forrest City, AR; Yazoo City, MS; and Elkton, OH) found that “the expected cost of the current Wackenhut contract exceeds the expected cost of operating a Federal facility comparable to Taft….” (Taft Prison Facility: Cost Scenarios, Julianne Nelson, Ph.D, National Institute of Corrections, U.S. Department of Justice.)

(* Please note: While the 112th Congress failed to pass the FY 2013 CJS Appropriations, the Section 212 language was included in H.R. 5326, the House-passed FY 2013 CJS Appropriations bill, and S. 2323, the Senate Appropriations Committee-approved FY 2013 CJS Appropriations bill.)

5. Prohibit BOP from meeting additional bed space needs by incarcerating federal prison inmates in private prisons.

In recent years, the federal government and some state and local governments have experimented with prison privatization as a way to solve the overcrowding of our nation’s prisons – a crisis precipitated by increased incarceration rates and politicians’ reluctance to provide more prison funding. But results of these experiments have demonstrated little evidence that prison privatization is a cost-effective or high-quality alternative to government-run prisons.
Private Prisons Are Not More Cost Effective
Proponents of prison privatization claim that private contractors can operate prisons less expensively than federal and state correctional agencies. Promises of 20 percent savings are commonly offered. However, existing research fails to make a conclusive case that private prisons are substantially more cost effective than public prisons.

For example, in 1996, the U.S. General Accounting Office reviewed five studies of prison privatization deemed to have the strongest designs and methods among those published between 1991 and mid-1996. The GAO concluded that “because these studies reported little cost differences and/or mixed results in comparing private and public facilities, we could not conclude whether privatization saved money.” (Private and Public Prisons: Studies Comparing Operational Costs and/or Quality of Service, GGD-96-158 August 16, 1996.)

Similarly, in 1998, the U.S. Department of Justice entered into a cooperative agreement with Abt Associates, Inc. to conduct a comparative analysis of the cost effectiveness of private and public sector operations of prisons. The report, which was released in July 1998, concluded that while proponents argue that evidence exists of substantial savings as a result of privatization, “our analysis of the existing data does not support such an optimistic view.” Instead, “our conclusion regarding costs and savings is that…..available data do not provide strong evidence of any general pattern. Drawing conclusions about the inherent [cost-effective] superiority of [private prisons] is premature.” (Private Prisons in the United States: An Assessment of Current Practice, Abt Associates, Inc., July 16, 1998.)
Finally, a 2001 study commissioned by the U.S. Department of Justice concluded that “rather than the projected 20 percent savings, the average saving from privatization was only about one percent, and most of that was achieved through lower labor costs.” (Emerging Issues on Privatized Prisons, by James Austin, Ph.D. and Garry Coventry, Ph.D., February 2001.)
Private Prisons Do Not Provide Higher Quality, Safer Services
Proponents of prison privatization contend that private market pressures will necessarily produce higher quality, safer correctional services. They argue that private prison managers will develop and implement innovative correctional practices to enhance performance. However, emerging evidence suggests these managers are responding to market pressures not by innovating, but by slashing operating costs. In addition to cutting various prisoner programs, they are lowering employee wages, reducing employee benefits, and routinely operating with low, risky staff-to-prisoner ratios.
The impact of such reductions on the quality of prison operations has been obvious. Inferior wages and benefits contribute to a “degraded” workforce, with higher levels of turnover producing a less experienced, less trained prison staff. The existence of such under qualified employees, when coupled with insufficient staffing levels, adversely impacts correctional service quality and prison safety.
Numerous newspaper accounts have documented alleged abuses, escapes and riots at prisons run by the Correctional Corporation of America (CCA), the nation’s largest private prison company. In the last several years, a significant number of public safety lapses involving CCA have been reported by the media. The record of Wackenhut Corporation (now The Geo Group), the nation’s second largest private prison company, is no better, with numerous lapses reported since 1999.
And these private prison problems are not isolated events, confined to a handful of “under performing” prisons. Available evidence suggests the problems are structural and widespread. For example, an industry-wide survey conducted in 1997 by James Austin, a professor at George Washington University, found 49 percent more inmate-on-staff assaults and 65 percent more inmate-on-inmate assaults in medium- and minimum-security private prisons than in medium- and minimum-security government prisons. (referenced in “Bailing Out Private Jails,” by Judith Greene, in The American Prospect, September 10, 2001.)

Lacking data, BOP is not able to evaluate whether confining inmates in private prisons is more cost-effective than federal government prisons.

Despite the academic studies’ negative results, BOP has continued to expand its efforts to meet additional bed space needs by incarcerating federal prison inmates in private prisons. Over a 10-year period, the costs to confine federal BOP inmates in non-BOP facilities nearly tripled from about $250 million in FY 1996 to about $700 million in FY 2006. To determine the cost-effectiveness of this expanded use of private prisons, Congress directed the U.S. Government Accountability Office (GAO) in the conference report accompanying the FY 2006 Science, State, Justice and Commerce Appropriations Act (P.L. 109-108) to compare the costs of confining federal prison inmates in the low and minimum security facilities of BOP and private contractors.
However, GAO determined in its October 2007 report that a methodologically sound cost comparison analysis of BOP and private low and medium security facilities was not feasible because BOP does not gather data from private facilities that are comparable to the data collected on BOP facilities. As a result, the GAO concluded that:
“[W]ithout comparable data, BOP is not able to evaluate and justify whether confining inmates in private facilities is more cost-effective than other confinement alternatives such as building new BOP facilities.” (Cost of Prisons: Bureau of Prisons Needs Better Data to Assess Alternatives for Acquiring Low and Minimum Security Facilities, GAO-08-6, October 2007)
BOP officials told GAO that there are two reasons why they do not require such data from private contractors. First, federal regulations do not require these data as a means of selecting among competing contractors. Second, BOP believes collecting such data could increase private contract costs. However, BOP officials did not provide evidentiary support to substantiate this concern.
In conclusion, AFGE strongly urges the Obama administration and the 113th Congress to prohibit BOP from meeting additional bed space needs by incarcerating federal prison inmates in private prisons. Prison privatization is not the panacea that its proponents would have us believe. Private prisons are not more cost effective than public prisons, nor do they provide higher quality, safer correctional services. Finally, without comparable data, BOP is not able to evaluate or justify whether confining inmates in private facilities is more cost-effective than building new BOP facilities.

6. Oppose any effort to statutorily redefine the term “law enforcement officer” for pay and retirement purposes to exclude federal prison staff.

Under current law, the definition of “law enforcement officer” for pay and retirement purposes includes federal prison support staff, in addition to those individuals who fill federal correctional officer positions. However, in October 2005, the Republican staff of the House and Senate federal workforce subcommittees released a 25-page “Concept Paper for a Federal Law Enforcement Personnel System” that proposed to redefine “law enforcement officer” for pay and retirement purposes to exclude federal prison support staff.

AFGE strongly urges the Obama administration and the 113th Congress to oppose any legislative effort to institute such a redefinition. The reason federal prison support staff receive law enforcement officer pay and retirement benefits is because their jobs include performing law enforcement security functions in federal prisons. These men and women, on a daily basis, help supervise and control prison inmates at all security levels inside the walls and fences of federal prisons. They are called upon, on a daily basis, to provide searches of inmates, to search housing areas of federal prisons for contraband, and to escort inmates to local hospitals or other outside facilities.

In addition, federal prison support staff – like federal correctional officers – are required to successfully undergo training to perform these law enforcement security operations in federal prisons. These men and women are required to go to law enforcement training in Glynco, GA, and are required to pass firearms training every year.

Why do the jobs of federal prison support staff include performing law enforcement security operations at federal prisons? Unlike state or county correctional facilities, federal prisons do not have sufficiently large numbers of correctional officers to deal with security-related issues. Because of this shortage of correctional officers, the federal BOP must train and use prison support staff to help maintain safety and security at federal prisons.

7. Exempt federal law enforcement officers, including BOP correctional officers and staff, who separate from government service after age 50 from the present law’s 10% additional tax for early distributions from the Thrift Savings Plan (the third component of the Federal Employees Retirement System or FERS).

Under present law, a federal employee who receives a distribution from a qualified retirement plan such as the Thrift Savings Plan (TSP) prior to age 59½ is subject to a 10% early withdrawal tax on that distribution, unless an exception to the tax applies. Among other exceptions, the early withdrawal tax does not apply to TSP distributions made to a federal employee who separates from government service after age 55.

Present law also provides that BOP correctional officers and staff, as well as other federal law enforcement officers, who complete 20 years of service in a “hazardous duty” law enforcement position are eligible to retire at age 50. This provision is intended to help the federal government recruit and retain a young, physically strong work force to work in BOP correctional institutions.

As a result, BOP correctional officers and staff who retire at 50 years of age/20 years of service cannot – under present law – withdraw their TSP funds without incurring the 10% early withdrawal tax penalty. These retirees must wait until age 55 to withdraw their TSP monies if they want to avoid incurring this penalty.

This is grossly unfair to the BOP correctional officers and staff who keep the most dangerous felons behind bars, as well as to the other federal law enforcement officers who patrol our nation’s borders and secure our federal buildings’ safety.

Until a few years ago, police and firefighters who worked for State and local governments experienced a similar problem. Those who retired after age 50 but before age 55 were unable to withdraw money from their defined benefit plans without incurring the 10% additional tax penalty. However, section 828 of the Pension Protection Act of 2006 (P.L. 109-280) resolved the problem for these State and local public safety employees. This section amended section 72(t) of the Internal Revenue Code of 1986 (which exempts certain individuals from the 10% early withdrawal penalty) by adding the following new paragraph:

“(10) Distributions to qualified public safety employees in governmental plans.

(A) In general. - In the case of a distribution to a qualified public safety employee from a governmental plan (within the meaning of section 414 (d)) which is a defined benefit plan, paragraph (2)(A)(v) shall be applied by substituting “age 50” for “age 55”.

(B) Qualified public safety employee. - For purposes of this paragraph, the term “qualified public safety employee” means any employee of a State or political subdivision of a State who provides police protection, firefighting services, or emergency medical services for any area within the jurisdiction of such State or political subdivision.”

AFGE strongly urges the Obama administration and the 113th Congress to support legislation that would modify the section 72(t)(10) language to benefit those federal law enforcement officers, including federal correctional officers and staff, who want to retire at age 50 and withdraw their TSP monies without incurring the 10% additional tax penalty. This legislation would:

* Strike the language “which is a defined benefit plan” from subparagraph (A). Thus, federal law enforcement officers who participate in a defined contribution plan like the TSP would also be granted relief from the 10% early withdrawal penalty. * Amend subparagraph (B) to include federal law enforcement officers. Subparagraph (B) as now written only applies to state and local police, firefighters, and EMS personnel. * Amend subparagraph (B) to include correctional officers and staff who work at BOP prison facilities. Subparagraph (B) as now written only applies to police, firefighters and EMS personnel.

Social Security Administration

“… SSA rarely receives administrative funding equal to the President’s request or its own independent budget request, and this trend is likely to continue given the status of funding, via a series of continuing resolutions for FY2011. Extended continuing resolutions and LAE appropriations that are below the President’s budget request may make it difficult for the SSA to build on [it’s] progress.” (Congressional Research Service, March 23, 2011)
SSA Program Overview
This year the Social Security Administration (SSA) is expected to complete over 5 million applications for retirement benefits. The Agency will administer $672 billion in OASI benefit payments to almost 46.7 million beneficiaries. SSA will pay almost $143 billion in disability insurance benefits to almost 11.1 million beneficiaries. Each month, about 7.8 million disabled people receive a total of $8.3 million in disability benefits, with the average individual collecting $1,064. Just over $39.4 million is distributed each month to 33 million retirees, an average of $1,167. Some recipients collect both, with one benefit typically reduced. SSA estimates it will pay $54.2 billion in Federal benefits to an estimated 8.2 million SSI recipients in FY 2013. Including state supplementary payments, SSA expects to pay a total of $57.9 billion and administer payments to a total of almost 8.5 million recipients. Federal benefit payments represent approximately 93 percent of Federal SSI spending.

Social Security has always been America’s most effective and efficient anti-poverty program. 99 cents out of every dollar Americans pay into the Old age and Survivors Insurance system is returned in benefits. In contrast, private life insurance companies spent 21 cents of every dollar collected and sixteen cents of every dollar spent (not including additions to the reserves) on administrative costs in 2010. Private-sector-defined benefit plans spent 2.5¢ on administrative costs of every dollar of income and 5¢ of every dollar expended in 2010. Social Security does all these things at minimal cost and continues to provide world class service to the public.

But SSA’s excellent reputation for public service is in jeopardy. The critical outreach and information service provided by SSA field offices is, and has been, under attack by a Commissioner hostile to the basic mission of the agency. Aggressive efforts to transfer responsibility for the SSA applications process from well-trained, informative claims representatives to computers and internet programs offering mixed and largely unevaluated results, is a mistake that could be costing people thousands of dollars. Hours have been reduced, staff has been cut and the commitment to service – so long a cornerstone of the agency – has been all but forgotten. Many of the problems at SSA are budget related as described below, but leadership is not a budget issue. SSA needs a Commissioner who understands and supports the historically and politically critical mission of public service; a commissioner who will articulate that vision to the employees; and a commissioner who will educate the public on the effectiveness and financial soundness of the Social Security system.

Workload Growth
One of the greatest concerns for SSA is the huge increase in Retirement, Survivor, Dependent, Disability, and Supplementary Security Income (SSI) new claims and appeals. This increase is driven by the nearly 80 million baby boomers who will be filing for Social Security benefits by 2030—an average of 10,000 per day. Concurrently, there has been a surge in claims filed due to the economic downturn, which began in 2008. In FY 2012, disability claims receipts exceeded 3 million for the fourth successive year.
Over the past two years, the Program has seen an 11 percent increase in applications for Social Security retirement benefits and a 27 percent increase in disability insurance applications – a surge officials say they have never seen before, even in previous deep recessions. Given the rising caseload, SSA expects that pending initial disability claims will likely result in 1.1 million people waiting for a decision.
When SSA established the disability hearings process in 1940, it was designed to handle a larger number of cases, relative to other hearing processes. However, hearings originally constituted a small workload compared to today’s numbers. In FY 2007, SSA received nearly 580,000 hearing requests; last fiscal year, the agency received over 859,000 hearing requests.
SSA Budget and Program Impact
Despite SSA’s enormous challenges, the FY 2012 appropriation for administrative funding through the Limitation on Administrative Expenses (LAE) account was $277 million below the FY 2011 enacted level after rescissions from Carryover Information Technology funds. This funding level was over $1 billion below the President’s budget request and did not allow SSA to cover inflationary costs for fixed expenses. It resulted in significant reductions in the agency’s vital services, including a continuation of the hiring freeze in most of SSA, the permanent closure or consolidation of approximately 42 field offices, the closure of all field offices to the public one-half hour earlier, the closure of hundreds of part-time remote contact stations, suspension of mailing annual benefit statements to the public (discussed below), and postponement of several efficiency initiatives.
With SSA operating under a continuing resolution for the first six months of FY 2013 and the uncertainty posed by sequestration, the agency recently announced further reductions in public service hours. Effective November 19, SSA field offices will close an additional 30 minutes earlier, and beginning January 2013 they will close at 12:00 p.m. on Wednesdays.
SSA was making limited progress in addressing the enormous backlog of hearings cases, but the inadequate budget has reversed that progress. After December 2008, when the number of pending hearings rose to 768,540, the backlog was reduced for 19 straight months, to 694,417 on June 2010. However, pending hearings began to increase again in July 2010 and in May 2012 reached an all-time high of 823,828. Based on the most current information available from SSA, the current backlog is approaching 2 million cases.
Staffing
SSA expects to lose an additional 2,000 employees in FY 2013, which means the agency will lose a total of more than 9,000 federal and state employees from FY 2011 through FY 2013. The agency will have approximately the same number of employees in FY 2013 as it did in FY 2007, even though workloads have increased dramatically over the past two years, with retirement and survivor claims up 11 percent, and disability claims up 27 percent. The failure to maintain adequate staffing levels at SSA is a major contributor to the lengthening backlogs and processing times.
In addition, the wave of increased disability claims has a very significant impact on the Disability Determination Service staffing. Since FY 2008, the number of claims pending for a disability medical decision rose from 565,286 to 707,700—an increase of 142,414, or 25.2 percent. Despite the fact disability claims have increased at unprecedented rates, the current staffing level for the DDS is 14,262, which is 1,107 (7.2 percent) below the level at the end of FY 2011, and 1,831 (11.3 percent) below the level at the end of FY 2010. A continued hiring freeze in DDSs for FY 2013 will not allow SSA to complete as many disability claims as received. Morale Having thousands of fewer staff people being asked to handle a steadily increasing workload is a recipe for declining morale in any organization. SSA is no different. Consistently inadequate budgets requiring the closure of field offices, staff reductions, potential layoffs or furloughs, further contribute to poor morale at SSA. Efforts by the Commissioner to reduce SSA’s historic commitment to public service by pushing applicants to file online regardless of the inadequacy of these systems, is yet another reason for poor morale at SSA. And finally, but perhaps most importantly, the lack of effective leadership within the agency has left employees with the impression that they are undervalued, and at times, unimportant. The years of doing more with less has had a severe toll on the employee morale at SSA. In a recent AFGE survey of SSA workers, 45% reported that they are dissatisfied or extremely dissatisfied with their work experience at SSA. Survey responses would indicate that employee’s greatest frustrations are staff shortages and a lack of time to process pending cases due to the pressure of constant interviewing. Overwhelmingly, employees report that they do not have enough time to devote to a quality work product, which includes accuracy, complete and proper explanations of rights and responsibilities to clients, investigation of any and all inaccuracies, among others. Backlogs are growing at tremendous rates. Adequate funding will do much to resolve many of these problems. However, competent, capable, visionary leadership at the top of SSA is equally critical. Fortunately with the retirement of the current Commissioner, the Administration will have the chance to appoint just such an individual. The Social Security Administration needs a Commissioner who has vision, who is committed to providing the best possible service to applicants, beneficiaries and the public, who is aggressive in finding the resources the Agency needs to accomplish its mission and who can treat employees with respect and equality. FY ’14 Budget Recommendation For SSA to meet its multitude of public service responsibilities, we estimate the agency will require a minimum of $12.3 billion for its FY 2014 administrative funding. This level of funding is the minimum necessary to respond to the rapidly growing demands on the Program. Without adequate funding, SSA will be unable to provide the high-quality customer service Americans have come to expect and deserve.

SSA teleservice centers, hearing offices, program service centers, disability determination services (DDS), and the 1,233 field offices are in critical need of adequate resources to address their growing workloads. The recommended FY 2014 budget of no less than $12.3 billion would allow SSA to cover inflationary increases, continue efforts to reduce hearings and disability backlogs, increase deficit-reducing program integrity work, and replace some staffing losses in SSA’s components. It would also help to minimize the closure of additional field offices.

SSA and the Annual Budget and Appropriations Process

The appropriation for the limitation on administrative expenses (LAE) account funds SSA’s administrative costs associated with the OASI, SSDI, and SSI programs as well as costs incurred by SSA to support the Medicare and Medicaid programs. This account also funds administrative functions such as the operations of SSA field offices, employment verification, agency information technology activities, and the Social Security Advisory Board.

The LAE account is discretionary and subject to annual appropriation. The funds that make up this account come from the OASDI trust funds, the Medicare trust fund, general revenue, and certain fees collected by the SSA. Social Security trust funds make up 68% of the LAE budget authority. Thus, unlike a traditional appropriation in which Congress provides money from the Treasury to an agency, the LAE appropriation is actually a limitation on the amount of money from these various sources that the SSA can spend on its administrative activities. In essence, about 70 percent of SSA’s administrative costs are funded internally through the Trust Funds and all of these costs are subject to the annual appropriations process and the spending caps imposed by recent budget agreements. The question then arises: when the Program is operating so efficiently and so much of its funding comes from the Trust Funds rather than general revenue, should it be subject to arbitrary, across-the-board, highly restrictive ceilings on domestic discretionary programs? Social Security benefits were exempted from these caps and the sequester because it is recognized that they are outside the day to day operations of the government. No rationale exists for treating the Program’s administrative costs any differently.

What is the Solution?

Removing Social Security’s administrative costs from the budget and appropriations process will require the enactment of legislation amending the Congressional Budget Act of 1974, the Balanced Budget and Emergency Deficit Control of 1985 and more recent legislation as well. The legislative solution is quite straight forward and would only require that the words “including the social security administrative expenses (as defined in section 3(11) of the Congressional Budget Act of 1974)” be added to existing statutes. In addition, SSA’s administrative costs would need to be exempted from the budget sequestration process.

Enacting such legislation must not remove SSA from the Congressional oversight process. Currently, jurisdiction over SSA’s administrative activities is shared by the tax-writing and the appropriations committees in the House and Senate. In our view, oversight can and should be performed by the Committees responsible for overseeing 98 percent of the Program’s expenditures and 100 percent of its revenues: House Ways and Means and Senate Finance. Indeed, both Committees have excellent track records of oversight regarding SSA, and particularly in recent years, the problems associated with the Disability Program.

In our view, this small, cost-free change would have the effect of restoring the administrative capacity of the agency to deliver the high quality, effective and competent service beneficiaries and the public have come to expect from the Social Security Administration.

National Guard/Reserve Technicians

Issue: Support both the congressional freeze to the Air National Guard and Senate language to establish a National Commission on the Structure of the Air Force in the National Defense Authorization Act.

Throughout the year, both the governors and the adjutants general have communicated to the Defense Department and Congress that the budget put forward by the Air Force this year sought cost savings through disproportionate cuts to the ANG.

The governors and the adjutants general have worked diligently with the Air Force to rectify these cuts.

However, the Air Force has failed to recognize the duties and responsibilities of the ANG both at home and overseas. The governors and the adjutants general recognize the Air Force’s recent attempts to revise its proposal, but once again, there has not been sufficient time for all interested parties to fully review the details, assess the impact and discuss modifications.

The current Air Force proposal has not been endorsed by the National Guard Bureau, the governors, the adjutants general or given final approval by the defense secretary. Likewise, 86 members of Congress thus far have signed onto a bipartisan, bicameral letter in support of the freeze and commission.

As long as the Air Force continues to put old airframes and equipment with no sustainment or modernization plan into the ANG as a “compromise,” the Guard will continue to be on the chopping block every year.

Maintaining the current force structure freeze, along with a thorough, transparent and objective discussion through the establishment of a National Commission will provide for a necessary resolution and a better process for future budgetary matters. In doing so, Congress can help ensure all voices and concerns are brought to the table in future discussions and decisions.

Time and time again, the Air Force has neglected to include all parties and duties in crafting alternative budget proposals. In this cost-conscious budgetary environment, the answer to an affordable defense force lies not in cutting the reserve, but in a return to our roots, a well-trained and equipped, community-based, force.

Please contact your Senators and Representatives today to let them know how important these issues are to the future of the Air National Guard.

Issue: Authorizing Veteran Status for National Guard and Reserve Members Entitled to Reserve Retirement Pay.

On March 4, 2011, Sen. Mark Pryor introduced S.491, Honor America's Guard-Reserve Retirees Act of 2011, to amend Title 38 to recognize 20 years of service by members of the reserve components by honoring them with status as veteran under law. S.491 is cost-neutral and provides an opportunity for a divided Congress to come together in support of our reserve component members. Many members of Congress may not know that a reserve component member can complete a full Guard or Reserve career, but not earn the title of Veteran of the Armed Forces of the United States unless the member has served on Title 10 active duty for other than training purposes. According to the Congressional Research Service, this affects 288,757 retired members of the National Guard and Reserve who were never activated or allowed to deploy on title 10 missions other than for training purposes through no fault of their own.

Today, National Guard members performing Operation Noble Eagle duty or protecting our southwestern border in a Title 32 status may one day retire from the Guard, but not qualify to be classified as a veteran.

Title 38 (Veteran’s Benefits) excludes career reservists from the definition of veteran who have not served on Title 10 for other than training purposes. Drill training, annual training, active duty for training and Title 32 duty are currently not qualifying service to earn veteran status. This cost-neutral bill would not bestow any benefits other than the honor of claiming veteran status for reserve component members who completed a 20-year career, but were never ordered to Title 10 active service other than for training purposes.
Issue: Require the Department of Veterans Affairs Give First Consideration to Qualified Veterans for Employment.
During the 112th Congress, H.R. 6372, Veterans Employment Act of 2012 was introduced by Rep. Mike Coffman (R-Colo.), that would require the Department of Veterans Affairs to give consideration to qualified veterans before nonveterans for employment in the competitive service.
Congress needs to continue to address unemployment for our veteran population, particularly for National Guard veterans. The National Guard Bureau estimates that unemployment for the force is as high as 20 percent. Unemployment for our brave men and women can harm their self-respect and dignity, and subjects their families to economic hardships.
The VA has a workforce of 318,856 civilians, but only 32 percent have worn the uniform.
The best fit for employing qualified veterans is with the Veterans Administration, which provides a multitude of benefits to our veteran population, including a growing segment from the National Guard. Those qualified veterans with combat-related disabilities should also be at the head of the veterans’ employment line.
The Veterans Employment Act of 2012 would expand employment opportunities for veterans in the VA by requiring that qualified veterans be considered first for jobs. Under the legislation, only when a qualified veteran cannot be found for an opening can a nonveteran applicant be hired to fill that position.
Issue: Examining the Department of Defense Process That Awarded the TRICARE Western Region Contract to the Higher Bidder and its Possible Consequences.
Earlier this year, the Department of Defense (DoD) announced the award of the contract for the TRICARE Western Region to United Health over its competitor and lower bidder, TriWest.
TriWest has protested the award to Government Accountability Office (GAO), which will be conducting its review of the award process in the coming weeks before making its recommendation to DoD, the final decision-making authority in the matter.
There is concern among our TRICARE beneficiaries in the Western Region about whether the bid evaluation process fully weighed the bidders’ comparative cost and performance qualifications or the consequences of a possible transition to a new network of providers that will be critical for the continued delivery of services in a largely rural region.
Issue: Air National Guard Budget Cuts
The Air Force’s FY13 budget proposal reduces defense spending through disproportionate cuts to the Air National Guard.
Issue Overview
The Air Force’s FY13 budget proposes a total aircraft reduction of 191 aircraft and 5,100 in personnel cuts from the Air National Guard (ANG) alone. This equals 59% of the total aircraft reductions in the Air Force and six times more personnel than being cut from the Active Component Air Force. Given that the ANG provides 35% of the U.S. Air Force’s capabilities for only 6% of its budget, DEFCON believes that a cost-effective and strategic FY13 Air Force Budget should more fully employ the proven capabilities of the ANG.
What’s At Stake?
Without Congressional action, the Air Force’s final Force Structure decision will result in: * 5,100 manpower cuts to the ANG in FY13 * Another 400 manpower cuts over the Future Years Defense Program (FYDP) * ANG Fleet reduction of 191 aircraft
After 10 years of war and numerous domestic operations, today’s National Guard is a modern, accessible military force that trains and performs to the same standards as their active duty counterparts. A 2011 Pentagon study conclusively stated that even when mobilized, Reserve Component units are far less expensive than their peer units in the Active Component. In this cost-conscious budgetary environment, the answer to an affordable defense force lies not in cutting the reserve, but in a return to our roots – a well-trained and equipped, community-based force.
Issue: Cost Effective Force
The National Guard is a modern, accessible military force that trains and performs to the same standards as their active duty counterparts at a fraction of the cost.

Issue Overview
The National Guard is unquestionably the most cost-effective military force our nation has. They provide operational use to both the state governors while in Title 32 status and our federal military when called upon by the President of the United States in Title 10 status at no additional cost to the taxpayers. After a decade at war and numerous domestic operations, today’s National Guard is a modern, accessible military force that trains and performs to the same standards as their active duty counterparts. In this cost-conscious budgetary environment, the answer to an affordable defense force lies not in cutting the reserve, but in a return to our roots, a well trained and equipped, community-based, force. The Army National Guard: * represents nearly 32% of the total Army Force at just 11% of the Army’s budget. * manages approximately 43% of the Army’s total aviation and Unmanned Aircraft Systems (UAS). * costs about $45,000 per soldier if not mobilized, or roughly 31% of what an Active Component (AC) soldier costs at approximately $146,000. * costs slightly less than the Active Component (AC), per soldier, if mobilized and on active duty. The Air National Guard: * represents 19% of the total Air total personnel and 35% of the fighter, tanker and airlift capabilities in the United States Air Force (USAF) for just 6% of the Air Force budget. * provides over 30% of all deployed Air Force aircraft needs, with 90% of all deployments filled with volunteers. * operates 17 of 18 of the nation’s air defense alert sites in dispersed smaller bases. * operates 75% of their facilities in dual use with civilian airfields providing valuable air traffic control and communications capabilities to the region. * yields 89 wings for $5 million per year compared to 1 Active Air Force wing for $4 million per year. * has more experience, on average – Air National Guard maintainers average 15 years of experience at 7+ skill level compared to Active Air Force maintainers with 7 years’ experience average and only 25% at a 7+ skill level. National Guard Members: * have to wait until the age of 60 to begin drawing retirement while active duty members receive retirement pay without delay the day of retirement (as young as 37 years old) for the rest of their lives. * do not receive the 24/7 support of being on an active duty installation, including housing for active duty service members and families, schooling for dependents, and daycare and recreational facilities, to name a few. * do not require installation support services, including military police, places of worship and ongoing utility maintenance and building expenses. * do not receive reimbursements for moving and travel expenses as active duty members and their family do during normal duty rotations. * are not provided with full time medical care for members and their families. * do not require the full time civilian employee network and office space needed to administer all of the above services and benefits.
In addition to the numerical facts, National Guard soldiers and airmen have a unique combination of experience, ranging from geographic dispersion throughout communities across the nation, specialized equipment knowledge, and civilian-acquired skills that allow them to respond quickly to both domestic and overseas missions.
The National Guard Provides Fulltime Readiness for a Part Time Cost
In an effort to reduce defense spending while maintaining operational readiness, the National Guard has emphasized its ability to provide a cost-efficient operational reserve as the answer to defense draw downs
Issue: Military Construction
Funding for military construction and modernization is critical to providing safe and functional facilities for training and mobilization.
Issue Overview
Modern and functional facilities enable members of the Army and Air National Guard to be trained and ready for their federal and state missions. With strong Congressional support, the Air and Army National Guards have been able to build, renovate and modernize readiness centers, training ranges, aviation facilities and logistical support centers. The National Guard Bureau and states clearly identify, qualify and prioritize critical Military Construction (MILCON) and Sustainment, Restoration, and Modernization (SRM) projects.
What's At Stake?
Aging critical infrastructure – including readiness centers that are on average over 50 years old – combined with budget constraints, will create unavoidable challenges. The total Army National Guard military construction program requirement, established in 2007, was estimated to be $1.5 billion per year for 20 years. And, the Air National Guard faces a Military Construction backlog of nearly $2 billion.
Although Congress has been very supportive of National Guard military construction, much more is needed to ensure the National Guard is able to provide safe and functional facilities for training and mobilization. Continued robust funding is necessary to ensure National Guard facilities meet established standards and requirements.
Issue: Personnel & Benefits
National Guard members and their families deserve proper medical coverage, education and employment opportunities as well as retirement and veterans’ protections.
Issue Overview
AFGE provides a voice on Capitol Hill for our National Guard members, their families and retirees to ensure that they receive proper benefits for their service, including medical coverage, education, retirement, veterans protection and employment opportunities.
Personnel Initiatives
Recommendations to Cut Guard Drill Pay in Half
AFGE supports recommendations from the 11th Quadrennial Review of Military Compensation (QRMC) that would allow Guard members to receive their retired pay upon their 30th anniversary of service after having attained 20 qualifying years of service. However, the QRMC recommendations to cut drill by half in order to equate drill pay with one day of “regular military compensation,” to “ensure equitable pay for similar service” with the active component is off base.
Although the QRMC discusses the possibility of incentive pay options to bolster its recommended reduction in drill pay, it makes no clear recommendation and provides no illustrative pay charts for easy understanding. There is also no recognition in the QRMC of the vast difference in service between the reserve components and the active component. Unlike the active forces, the National Guard member bears the expense in time and money for travel to drills, physical training, medical readiness care, family care and attending to many unit administrative responsibilities. The current drill pay structure is fair and much simpler in comparison.
Worldwide Space Available Travel
National Guard and Reserve component members and their dependents as well as "grey-area retirees" currently do not qualify for worldwide Space-Available (Space-A) travel like their active counterparts. Furthermore, the only travel allowed for National Guard and Reserve component members is within the continental United States, but they only receive last priority status despite their increased roles under Title 10 orders and in current overseas operations combined with Title 32 duties.
The National Guard has established itself as an indispensable operational force in defending our country in Iraq, Afghanistan and around the world. Serving alongside the active component worldwide, members of the National Guard deserve to have the same consideration for Space-A travel. Expanding this benefit for all members and gray-area retirees would be a significant step in closing the benefit gap that exists for our deserving members and their families.
Allowing Veteran Status for all Retired Members
Reserve Component members can complete a full Guard or Reserve career but not earn the title of “Veteran of the Armed Forces of the United States” unless they have served on Title 10 active duty beyond training purposes. Title 38 (veteran’s benefits) excludes career reservists from the definition of “veteran” who have not served on Title 10 (active duty) for other than training purposes. Drill training, annual training, active duty for training and Title 32 duty are currently not qualifying service to earn veteran status.
Today, National Guard members performing Operation Noble Eagle duty or protecting our southwestern border in a Title 32 status may one day retire from the Guard but not qualify to be classified as a Veteran of the Armed Forces. Legislation in Congress today to rectify this situation comes at no cost to taxpayers, and granting Guardsmen and women the simple right to call themselves a Veteran is an important recognition of service.
Health Initiatives
Opposing Increases in TRICARE Fees and Pharmaceutical Co-pays
The President’s FY13 Budget includes proposals to increase annual enrollment fees for TRICARE Prime; initiate enrollment fees for TRICARE for Life (TFL) to be phased in over 4 years; initiate enrollment fees and raise the deductibles for TRICARE Standard and Extra, with both to be phased in over 5 years; and increase the co-pays for pharmaceuticals.
The proposed increases would impose costs for medical care promised by the government to our retired members when they joined, and that care has long since been paid for in full by their service. Imposing these costs amounts to reneging on a bargain, altering the agreed upon payment terms for services already rendered.
Our retirees and their families living on reduced incomes with health issues are particularly vulnerable to any increased costs for medical care. The men and women of the Defense community, who have bravely served and continue to serve our nation, richly deserve the medical care they earned with their service and sacrifice.
Take Action: Write to Congress
Write to Congress today and urge them to stand up for any of these crucial issues to help support the brave men and women of the National Guard who volunteer to serve our country. * Oppose the Recommendation to Cut National Guard Drill Pay in Half * Authorizing Full Space Available Travel Eligibility for National Guard Members * Oppose Increasing TRICARE Fees in FY13's Budget
DCGS Unclassified Processing Capability

ANG AF Distributed Common Ground Systems lacks the capability to adequately support United States Special Operations Command (USSOCOM) tasked Full Motion Video (FMV) missions. The current systems configuration is not robust or reliable enough to support USSOCOM requirements. To support today’s fast-paced tactical missions, and avoid the software limitations imposed by the current architecture, ANG DCGS analysts are forced to place increasing reliance on workarounds and supplemental systems. This use of multiple systems has lead to task saturation, making it difficult for our ANG DCGS units to meet the stringent timelines required by USSOCOM forces. With ANG DCGS slated to receive a 70 percent increase in USSOCOM taskings within the next nine months, it’s paramount to adopt the same proven FMV system currently employed by Air Force Special Operations Command (AFSOC). This system would reduce complexity, interface seamlessly with existing architecture, and offer enhanced support to both Conventional and Special Forces Ground Commanders, by improving production timelines and providing a much needed proven data archival/retrieval capability. Additionally, integration into the Special Operations voice/data networks is essential to providing threat warning information and maintaining situational awareness for DCGS analysts. Adoption of the AFSOC FMV system would provide ANG AF DCGS Units with the tools to achieve mission success.
ANG DCGS units will be unable to properly, and effectively PED USSOCOM Tier 1 and Tier 2 missions. Failure of these missions could jeopardize the safety of US forces, and given their high importance, bring unnecessary publicity to the US Government.

Units Impacted

101 IS Otis ANGB, MA
123 IS Little Rock AFB, AR
161 IS McConnell AFB, KS
117 IS Birmingham, AL
137 IS Terre Haute, IN 152 IS Reno IAP, NV

Request/Recommendation

DEFCON urges Congress in FY13 to authorize and appropriate:
$.9M for DGS Fully Integrated Suite of AFSOC Mission Support Equipment and Software Loads

American Federation of Government Employees, District 14
D.C. Workers’ Issues

Improved Collective Bargaining

District officials continue to develop and implement District wide rules and regulations without bargaining with Labor. We need improved relations and communications with the Office of Labor Relations and Collective Bargaining. Many times, DC government locals and the city spend unnecessary costs for arbitration of disputes that could be avoided if we improved our collective bargaining process. The use of mediators and neutrals would benefit all parties and help to reach resolution at the lowest level possible. Also, more visibility and engagement from the District 14, National Vice President, is needed at bargaining table and in the media to advocate for DC government locals.

We need DC government to deal directly with DC government locals as an entire Council 211 as opposed to circumventing most Local Presidents and selectively meeting with others. DC government locals already have a constitution approved by the National Executive Council but haven't held elections and organized ourselves for full implementation. Once Council 211 is operational we need a standing forum to elevate our collective issues to executive officials of the District. If AFGE, District 14 doesn’t want another international union to speak on its behalf we need to organize ourselves. The DC Local Presidents need an opportunity to participate as a Council 211 and be at the table with the Mayor, City Administrator, city council and other leaders in the District when discussing issues that impact the collective body.

Enforcement of Administrative Orders

MRDDA v. PERB, is a lawsuit pending before the DC Court of Appeals. This is DDS' challenge to a Public Employee Relations Board ("PERB") decision in which the PERB concluded that the Mental Retardation and Developmental Disabilities Administration ("MRDDA") (now known as the Department on Disability Services) committed an unfair labor practice by failing to bargain with the Union before unilaterally discontinuing its past practice of providing free parking for employees who are required to work in the community in October of 2006. PERB ordered the Agency to restore the status quo, including reimbursing all bargaining unit employees for the cost of monthly parking going back to 2006 and to provide free parking for all bargaining unit employees until a different arrangement is negotiated with the Union. The Agency was also directed to pay the Union's costs associated with the litigation. The agency appealed the PERB order before the DC Superior court and again was denied. The lawsuit now sits before the DC Court of Appeals. DDS has not paid anything or restored parking, and, through OLRCB, continues to challenge the decision. It has yet to request bargaining with the Union to negotiate a new arrangement. Liability and interest continues to mount and is now likely to be well over $2,000,000.00. Due Process for Classification Appeals

Within DC Government there are a few agencies subordinate to the Mayor who have independent personnel authority and are not primarily serviced by the Department of Human Resources (DCHR). As a result, these agencies have engaged in a number of unorthodox merit staffing, promotion, and classification practices involving desk audits, career ladder promotions, violations of the equal pay for equal work principle. For example, DDS has its own personnel authority, but has taken this to mean that its actions are virtually immune from review and beyond the purview of the D.C. DCHR. A number of Grade 11 Resource Specialists were hired into career ladder positions with a promotion potential to the Grade 13. There are Resource Specialists at each of the three grades. The Grade 11 employees all had satisfactory ratings and had met time in grade requirements. They requested promotion to the Grade 12 level. A DDS classifier performed desk audits of their positions and determined that they were not entitled to promotion and informed the Union that the Grade 12 Resource Specialists (whose positions had not been audited) would be demoted to the Grade 11. DDS denies that employees may appeal such decisions to DCHR; but is entertaining the creation of a position classification appeal panel consisting of classifiers from two other agencies with independent personnel authority: DMH and CFSA. The Union has pursued discussions with the Agency to no avail and has presented the matter to DCHR. As yet, there has been no resolution of this matter.

In another case a DDS employee and the Union filed a grievance alleging a violation of equal work for equal pay. The matter is pending arbitration. In the meantime, DDS has decided to have an outside classifier from either DMH or CFSA perform a desk audit of the employee’s position as well as that of a comparator at a higher grade. The DMH desk audit did not include the grade of the duties performed and DDS determined that the employee should be demoted to a lower grade.

City Council Chairman Phil Mendelson announced committee assignments. * Committee of the Whole: Will have oversight of planning, zoning, the University of the District of Columbia and the Community College of D.C. Phil Mendelson, Chairman. * Finance and Revenue: Jack Evans, D-Ward 2. * Transportation and the Environment: Mary Cheh, D-Ward 3. * Health: Yvette Alexander, D-Ward 7. * Education: David Catania, I-At large. * Public Safety and the Judiciary: Tommy Wells, D-Ward 6. * Human Services and the Alcoholic Beverage Regulation Administration: Jim Graham, D-Ward 1. * Government Operations: Kenyan McDuffie, D-Ward 5. * Business and Consumer Affairs: Vincent Orange, D-At large. * Aging and Community Affairs: Marion Barry, D-Ward 8.

New Councilman David Grosso will not chair a standing committee. Neither will Councilmember Anita Bonds, who is only assured a seat through April when a special election will determine the permanent replacement for the at-large seat.

Equal Employment Opportunity Commission, C-216 Sequestration Cut to EEOC Would Devastate Civil Rights Enforcement * Summary
AFGE’s National Council of EEOC Locals, No. 216, represents employees on the front lines of protecting civil rights in the workplace. The Equal Employment Opportunity Commission’s (EEOC’s) investigators, attorneys, mediators, administrative judges and other EEOC staff contribute to job creation by enforcing this nation’s civil rights laws, which protect against discrimination on the job, based on race, religion, color, national origin, sex, age, disability and now genetics.
The sequestration scheduled to take place in March would slash an estimated $23M to $30M from EEOC’s $360M budget. The cut would devastate the EEOC’s ability to enforce laws that protect against workplace discrimination. Given that the bulk of EEOC’s budget is “salaries and expenses,” extended unpaid furloughs are all but guaranteed. EEOC cannot enforce laws without frontline staff allowed to be on the job.
Prior to FY13’s sequester threat, EEOC had already been suffering under a second year of an unprecedented budget cut in the amount of $7M. For the EEOC, which is a small and historically underfunded agency, even this “haircut” has meant the loss of 9% of its staff when workload is way up. In the last three years, EEOC has seen historically high charge filings, receiving 99,412 charges of workplace discrimination in FY12. EEOC continues to struggle with an unacceptable backlog of 70,312 cases and average processing time exceeding nine months. These extended delays represent lost opportunities for Americans who want to work. Cutting EEOC is counterintuitive at a time when job creation is the nation’s priority, because the agency’s mission is all about jobs.
For FY13, AFGE Council 216 will lobby for Congress to avoid sequestration and furloughs, which would devastate civil rights enforcement. For FY14, AFGE Council 216 will lobby Congress to restore EEOC’s budget to at least $367M, i.e., the same funding level as FY10 and FY11. AFGE Council 216 will also press the EEOC to implement efficiencies e.g., the Union’s dedicated intake plan, reducing supervisor to employee ratio to 1:10, cutting management travel, and eliminating contracts for work that can be performed more in-house.
Discussion
1. Sequestration Would Shut Down Enforcement of Laws Barring Workplace Discrimination * AFGE Council 216 will lobby Congress to avoid huge across the board cuts that would shut down enforcement of this nation’s civil rights laws that protect against discrimination on the job.
EEOC is the chief agency responsible for enforcing this country’s laws preventing discrimination in employment. Workplace discrimination, such as harassment, failure to accommodate a disability, or retaliation, prevents private and Federal sector employees from working or getting a job in the first place.

EEOC is facing the devastating impact of sequestration of its budget that would occur in March 2013. According to the OMB Report Pursuant to the Sequestration Transparency Act of 2012 (P.L. 112-155), September 2012, the result of sequestration would be that EEOC’s $360M budget would be slashed by $30M (8.2%). The Fiscal Cliff deal now means an estimated $23M cut (6.5%), which would take place over shorter 6 month time frame. The bulk of EEOC’s budget is salaries and rent. A Federal Times article “Sequestration would mean thousands of furloughs,” September 24, 2012, specifically mentioned EEOC when it stressed that “[p]articularly hard-hit could be agencies in which payroll and benefits make up a high percentage of the budget, such as the Social Security Administration, Equal Employment Opportunity Commission, and National Archives and Records Administration.”

EEOC simply could not absorb a budget cut of this magnitude. EEOC’s Chair, Jacqueline Berrien, in an email to staff dated December 20, 2012, described sequestration cuts as “significant and harmful to our collective mission as an agency” and confirmed: “Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future.” The EEOC would surely end up furloughing staff for weeks. While the EEOC would prioritize keeping intake open to accept charges, this would be a pro forma exercise. Discrimination complaints would stack up with no staff available to process them. For all intents and purposes, the United States would cease to have enforceable civil rights in the workplace. 2. Potential FY14 Budget Cuts Would Have Disastrous Public Impact When Workload is Already at Record High * AFGE Council 216 will lobby Congress to restore at least $7M Cut to EEOC’s Budget
EEOC must be swift and effective in order to deter discrimination. Unfortunately, in FY13, EEOC is suffering under the second year of an unprecedented $7M budget cut. This budget cut comes at a time of record setting discrimination charge filings. According to EEOC’s FY12 Performance and Accountability Report, “EEOC received 99,412 charges in FY 2012, which is steady compared with the past two record setting years, but is remarkable when considering that the last three years of receipts top the prior 47 years of the agency’s history.” More work and fewer staff impacts how long the public must wait for help.
EEOC’s frontline staff is the single most critical resource utilized to enforce civil rights laws that protect workers. The worst impact of the $7M cut has been the steady loss of frontline employees in virtually every EEOC field office. EEOC has consistently faulted plummeting staffing as the cause of its enormous backlog. Likewise, EEOC has credited modest hiring in FY10 to finally bringing the backlog down by 10% after years of sharp increases as high as 30.

Nevertheless, the private sector charge backlog remains a staggering 70,312. Moreover, it is likely that recent progress will stall out as frontline staffing diminishes. EEOC’s Office of Inspector General (OIG) has recognized this concern, in its section of the EEOC FY12 Performance and Accountability Report:

[U]nder the current conditions of fiscal austerity faced by Federal agencies, and an EEOC hiring freeze, there will be fewer front line staff (e.g., investigators), to conduct essential enforcement activities—potentially hampering progress in inventory reduction.

EEOC is already experiencing the OIG’s front end concern, i.e., fewer frontline staff. According to EEOC’s FY12 Performance and Accountability Report:

The agency hoped to be able to fill positions left open by attrition in FY 2011. However, a hiring freeze was imposed effective January 3, 2011. The freeze meant that virtually no hires were made in FY 2012; indeed, only 11 employees were hired in FY 2012.

The agency’s overall staffing has shrunk from 2,505 FTEs at the end of FY11 to approximately to 2,346 FTE at the end of FY12. During the first quarter of FY13, the agency’s staffing slipped to 2,277. Based on previous years, the EEOC sees a wave of about 85 separations in January. This will take EEOC down to approximately 2,192. This would be on par with FY08’s rock bottom staffing level of 2,176, when a devastating hiring freeze resulted in the loss of almost 30% of its workforce, mostly front-line staff, between 2001 and 2008. As this decimation of EEOC’s workforce occurred, EEOC’s backlog of charges grew from 29,041 from to 81,081.

Finally, in 2008, EEOC’s ability to serve the public was in such abysmal shape that President Bush requested an increase for EEOC in FY09 to allow for hiring. Congress approved the budget. The modest increase in frontline staff in FY09 correlated with lower case loads and a leveling of the backlog. Unfortunately, history demonstrates that EEOC will soon backslide.

EEOC’s investigators are down from a high of 917 in FY00 to approximately 700 in FY12. This at a time when EEOC continues to increase the number of labor intensive systemic charges it investigates. EEOC’s FY13 budget request had included “Funding provided to hire investigators (46 FTE), mediators (2 FTE), office automation assistants (OAA) (13 FTE), attorneys (4 FTE), and support staff (20 FTE) to reduce agency private sector charges inventory and promote enforcement of systemic discrimination cases.” This limited hiring would have resulted in less than one investigator per office. However, this did not happen, due to the unprecedented cut to the EEOC’s budget.
Likewise, other frontline activities have been impacted by the relentless attrition. EEOC receives over 18,000 Freedom of Information Act (FOIA) requests annually. According to the FY12 Chief FOIA office report, the explanation for EEOC’s FOIA backlog is that “EEOC hired 31 dedicated records disclosure staff in 2008 and 2009 to process FOIA requests in our fifteen district offices. Since that time, four of the FOIA coordinators and two of the FOIA assistants have left these positions, and have not been replaced due to agency fiscal constraints.”
EEOC has also seen tremendous losses to Federal Hearings units, both administrative judges and support staff. Also, the number of available OFO Appellate Attorneys has decreased over the last decade, from a high of 49 in FY 2002 to 33 in FY 2011. EEOC’s in-house call center, already an ineffective model, is now limping along with the loss of almost two-thirds of its staff.

The result of these frontline staffing losses across the agency is that the public is not being served. It is not enough to have discrimination laws on the books, there must be EEOC frontline staff to enforce these laws.

3. EEOC Must Avoid or Reduce Staff Furloughs by Implementing Efficiencies and Eliminating Unnecessary Contracts and Management Travel * AFGE Council 216 will lobby Congress to make EEOC implement efficiencies to prioritize frontline staff and eliminate unnecessary contracts and travel.

EEOC’s response to sequestration is likely to include: reduction in force (RIF), unpaid furloughs of several weeks, and dropping probationary employees. EEOC must prioritize keeping frontline staff on the job by saving money on unnecessary expenses and working smarter. This holds true even in the event of less drastic reductions to EEOC budget.

A. EEOC Should Eliminate Expendable Contracts and Unnecessary Management Travel

The EEOC should eliminate contracts it simply cannot afford. Instead, EEOC stated in its FY13 Budget Request: “[W]e also are projecting an increase in the number of contracts/purchase orders awarded in subsequent fiscal years 2012 - 2013.” In particular, EEOC needs to reign in contracts for work or items that can be found in-house.

* Currently the EEOC is advertising on www.fbo.gov for a tracking service for legislation affecting EEOC to be used by its Office of Communications and Legislative Affairs (OCLA). The in-house OCLA staff could locate this information for free on Thomas.gov. This solicitation should be canceled. * EEOC habitually pays contractors to evaluate its own work practices. These reviews can and should be performed by the Office Inspector General. Instead, the OIG farms out these projects. * Case in point was a 2010 Evaluation of Priority Charge Handling Procedures. The bottom-line of the report, which surely costs six figures, was that different EEOC offices apply the procedures inconsistently. This determination could have been deduced very easily by any in-house team. * EEOC is planning these other program evaluations according to its FY13 budget: Outreach/Technical Assistance, EEOC External Communications; Effect of EEOC’s Federal Sector Evaluations and Assistance; Systemic Enforcement. The timeframes for these evaluations were “pending agency’s overall strategic planning assessment.” EEOC has now issued its strategic plan. If these evaluations are needed at all, then OIG itself should perform the work in-house. * EEOC already employs mediators for its successful mediation program. EEOC should not pay contract mediators for work that can be performed by in-house mediators. Especially for mediations that occur within a 100 mile radius of an EEOC office that houses mediators. Additionally, EEOC could implement an expanded voluntary telework program for mediators to extend their geographic reach by being based or assigned to serve certain regions. * EEOC regularly rents space in hotels to conduct “TAPS” training and for “EXCEL” conferences. Instead the agency should use conference space in its own offices for these events. This might mean holding smaller trainings or conferences, but offering them more often. The additional dates would benefit the public by offering more choices to fit more schedules. * EEOC pays for managers to travel to meetings and for office visits. This travel wastes money given that EEOC has equipped all offices with video conference capabilities, including new television monitors. These systems remain idle most days every month, instead of being utilized to reduce travel expenditures.

* B. EEOC Should Increase Efficiencies, Including: the National Intake Plan, Reducing Supervisor to Employee Ratio, and Expanding Telework to Decrease Rental Costs

i. Transition to the National Intake Plan Cannot Wait
AFGE Council 216’s Full Service Intake Plan addresses both the efficient use of resources and the backlog. Although AFGE Council 216 first submitted the plan three years ago, it continues to languish with EEOC’s leadership. Congress recognizes the need for EEOC to implement efficiencies. Senate appropriators specifically identified the intake plan in their report:
Full Service Intake- The conference report to accompany the Consolidated and Further Continuing Appropriations Act, 2012, incorporated by reference the Senate-passed bill's language directing EEOC to submit to the Committee a report detailing the Commission's views on a National Full Service Intake Model, which would create dedicated charge intake units in each field office to handle the intake process from pre-charge counseling through charge filing. However, neither the EEOC's Draft Strategic Plan nor the EEOC's fiscal year 2013 congressional budget justification referenced the Full Service Intake Plan. Therefore, the Committee reiterates its direction to EEOC to submit a report detailing its views on this model to the Committee within 60 days of the enactment of this act. [Senate Report 112-158]. Despite the Senate Report and the agency’s call for consistent implementation of the customer service goals and priority charge handling process [PCHP], the EEOC still made no mention of the National Intake Plan in the final version of the Strategic Plan. It is now even more imperative to transition to the National Intake Plan. EEOC’s original intention, when it determined to replicate its failed contract call center model in-house, was to have 64 Intake Representatives (IIRs). In EEOC’s FY13 budget request, the agency stated: “Our 49 Information Intake Representatives (IIRs), co-located in 15 of our field office sites, handle more than 25,000 calls each month from individuals wanting more information or who wish to discuss their situation with an IIR.” Staffing levels for IIRs are currently down almost two-thirds and wait times for the public are increasing. The call center model was never effective or efficient and at this staffing level is unsustainable. AFGE Council 216’s Intake Plan also addresses the 9 month average charge processing time and the EEOC’s backlog of 70,312 charges. Initial implementation of the plan could occur and create efficiencies without expense by training and integrating in-house call center staff into dedicated intake units that both answer phones and draft charges where appropriate. Under this cost-saving plan, investigative staff, relieved from intake responsibilities, could focus on processing cases already in the system to reduce the backlog. ii. EEOC Must Prioritize Frontline Staffing Vacancies
As the EEOC struggles through into its second straight year of a $7M budget cut, it is critical that EEOC increase efficiencies that push resources to the frontline that serves the public. First, any exceptions to the hiring freeze should be used to hire frontline staff, rather than backfilling or re-employing annuitants in more costly management positions. In the closing months of FY12, EEOC filled several supervisory and managerial vacancies by promoting frontline staff. The promotions create more frontline vacancies that are not backfilled. A better plan to retain talent and frontline capacity would be to fill more GS-13 Systemic Investigator positions, in light of EEOC’s renewed emphasis on systemic cases.
Second, a budget neutral way for EEOC to increase frontline staff is to reduce supervisor to employee ratio. The EEOC is notoriously top heavy, a point stressed by Republican leadership who pushed for a field restructuring plan, which promised to improve the staffing ratio to one supervisor for ten employees. Instead, on January 1, 2006, EEOC implemented a controversial nationwide field restructuring, without required approval from its Senate Appropriations Committee, which downgraded offices in cities with high minority populations. However, improving the staffing ratio of frontline employees remains a broken promise. EEOC should identify management redundancies and redeploy supervisors to the frontline.
Third, EEOC should belatedly heed the Administration’s call for efficiency and cost savings by using expanded telework to reduce rental costs. EEOC’s Office of Inspector General supports the premise, “we believe the EEOC is in an ideal position to use [frequent] telework to achieve major infrastructure cost savings. [Footnote: OIG defines frequent telework as telework scheduled to be performed a minimum of two or more days per week.]” Management Advisory on the Potential for Real Estate Cost Savings Through Telework (OIG-2011-02-AEP). In addition, prompted by the President’s Telework Initiative, EEOC paid for Deloitte Consulting LLP, to examine the benefits and savings using telework. The report notes that use of telework provides direct space savings and reflects on components important for today’s workforce – innovation and flexibility. Instead, EEOC continues leasing the same or even greater space, not accounting for the reduction of needed space if employees voluntarily teleworked most days.
Fourth, EEOC should limit turnover by taking actions that improve employee morale. Workplace flexibilities like maxi-flex and expanded telecommuting improve morale. EEOC also must pay its debt to employees for willfully violating overtime laws since 2006, per the current claims process stemming from a Federal arbitrator’s final decision dated March 23, 2009.

Only by focusing its limited resources on the frontline, including appropriate support staff, will EEOC at least prevent the 70,312 charge backlog from growing larger and the over 9 month processing time from getting even longer.

* Federal Employees Must Have Rights to Discovery and Full and Fair Hearings * AFGE Council 216 will demand that Federal employees not lose rights as EEOC implements changes to EEO and hearings processes.

AFGE Council 216 will continue to fight for additional resources and support changes that can be accomplished under the regulations and statutes, i.e., subpoena authority and judicial independence, so that Federal workers receive full and fair hearings. AFGE Council 216 also will continue to address the loss of EEOC Administrative Judges (AJs), who leave to become Administrative Law Judges. The EEOC admits in its new Strategic Plan that: “As in the private sector, budgetary constraints have led to fewer available Administrative Judges and Office of Federal Operations Appellate Attorneys at a time when requests for hearings and appeals are increasing.”

AFGE Council 216 will continue to urge the Chair to ensure EEOC AJs are competitive with other agencies by addressing classification and regulatory issues that deny these employees the judicial independence and subpoena authority necessary to adjudicate federal sector claims. AFGE Council 216 will also maintain pressure to backfill AJ positions and provide appropriate support for these positions. AFGE Council 216 will vigilantly monitor EEOC’s implementation of its revised regulation that allows Federal agency complaint processing pilots. While the EEOC adopted AFGE Council’s 216’s recommendation that Federal employees must voluntarily opt-in, these pilots still must provide for complete, timely, and impartial investigations.

AFGE Council 216 will continue to object to and scrutinize triage proposals to the extent that they result in the removal of judicial independence or deny discovery and hearings for Federal employees. EEOC’s Senate Appropriators noted: “The Committee is concerned by the lack of subpoena authority and resurrection of the `Fast Track' proposal in EEOC's Draft Strategic Plan, which may threaten full and fair hearings, including discovery, for Federal employees before independent Administrative Judges [AJs].” [Senate Report 112-158]. Nevertheless, EEOC’s final Strategic Plan calls for “[r]igorous implementation of a new case management system for federal sector hearings and appeals will enable the agency to bring consistency and greater efficiencies to the processing of federal sector complaints.” EEOC’s FY12 Performance and Accountability Report commits to “implement a case management plan in FY2013” and by FY16 categorize “100% of federal sector case inventory.” AFGE Council 216 will demand that the EEOC release the plan for stakeholder comments, hold a public hearing prior to finalizing the plan, and submit to Congressional oversight. 5. EEOC’s New Strategic Plan Leaves Openings for Concern * AFGE Council 216 Will Fight for the Plan to Best Serve the Public EEOC’s Commission voted to approve a new Strategic Plan on December 18, 2012. The Strategic Plan leaves much open to further development and implementation. The most important element, which remains to be finalized, is a measuring stick for the agency’s success. Until now the EEOC has focused on touting its annual closures. In fact, EEOC’s FY12 Performance and Accountability cites to a high number of closures. However, closures do not necessarily represent justice served. AFGE Council 216 welcomes the acknowledgement in the Strategic Plan, “One of the EEOC's greatest challenges has been to create a system that rewards effective investigations and conciliations and does not incentivize the closure of charges simply to achieve closures.” Instead, the Strategic Plan seeks to develop “Quality Control Plans” for the private and public sector and then set goals for meeting the quality targets. AFGE Council 216 will fight to ensure the quality control plans and their implementation does not devolve into another quota system. EEOC’s complex work of enforcing discrimination does not lend itself to a widget scorecard. EEOC’s drive for numbers has never served either its employees or the public well. The Strategic Plan continues EEOC’s renewed emphasis on systemic cases. AFGE Council 216 will urge that both individuals as well as large groups of affected employees deserve protection from discrimination.
The Union’s Accomplishments
In 2012, AFGE Council 216 aggressively raised awareness with Congress, the civil rights community and the press about EEOC’s budget and staffing crises that threaten service to the public. As a result of AFGE Council 216’s efforts this year:
1. Due to AFGE Council 216’s awareness campaign, EEOC did not furlough staff to absorb an unprecedented $7M cut to EEOC’s FY12 budget.
2. In a tough budget year, the administration actually requested a modest FY13 budget increase for EEOC. The requested $373M would have restored the $7M FY12 budget cut and included a small inflationary increase. Senate appropriators adopted the President’s Request. House appropriators recommended $367M, which would have at least restored the FY12 cut.
3. AFGE Council 216 provided written and oral testimony at the House CJS Subcommittee open witness hearing.
4. Senate appropriators called on EEOC to prioritize the hiring of frontline staff; criticized EEOC’s draft strategic plan for failing to consider the Full Service Intake Plan, which was submitted by the Union; and directed EEOC to consider efficiencies such as redeploying staff to the frontline and using voluntary telework. 5. Senate appropriators included oversight requirements pertaining to a proposed “Fast Track” system that could remove judicial independence and eliminate many Federal employees’ rights to a hearing and discovery. 6. AFGE Council 216 successfully lobbied so that EEOC’s Final Rule revising its EEO regulations requires that Federal employees must “knowingly and voluntarily opt-in” to any complaint processing pilots.

7. AFGE 216 Council has forced the EEOC to finally begin the Overtime case claims process pursuant to a March 23, 2009 Federal arbitrator’s ruling that EEOC had a committed a nationwide practice of willfully violating overtime laws. EEOC may owe its employees over $10M in unpaid overtime and liquidated damages.

8. AFGE 216 won its third consecutive AFGE Award for General Excellence for its newsletter “216 Works.”

9. AFGE Council 216 negotiated a new CBA, which is entering the ratification process. The CBA includes a maxi-flex pilot, expands telework days, and requires space for nursing mothers to pump milk.
10. AFGE Council 216 has kept up the pressure on EEOC’s administration to act on the Union’s National Intake Plan. 11. AFGE Council 216 finally prevailed in its efforts to make the EEOC protect employees who participate in the agency’s internal mediation program from retaliation. 12. AFGE Council 216 refused to waste agency travel funds for another unproductive National Labor Management Forum meeting. Instead, the funds were made available for those Local Labor Management Councils which could demonstrate worthy projects. 13. Activity on AFGE Council 216’s public and members-only Facebook pages has seen steady growth.
AFGE Activists should urge their lawmakers: * To avoid huge sequestration cuts, which would effectively shut down EEOC’s ability to enforce workplace discrimination laws. * To make EEOC avoid or reduce furloughing frontline staff by eliminating unnecessary contracts and implementing efficiencies. * To restore EEOC’s budget for FY14 to at least $367M million, i.e., the same as FY10 and FY11, before $7M cut in FY12 that remains in effect. * To direct EEOC to focus available hiring, up to the staff ceiling, on frontline staff to help workers, whose cases are trapped in EEOC’s backlog and are waiting over 9 months to receive help. * To require EEOC to quickly implement Council 216’s Cost-Efficient Intake Plan to provide timely and substantive assistance to the public. * To make EEOC finally compensate its employees for willful overtime law violations, per the current claims process following a federal arbitrator’s final decision dated March 23, 2009. * To direct EEOC to keep its broken promise to increase efficiencies and flatten the agency by improving the staffing ratio to 1 supervisor to 10 employees. This will provide cost neutral front-line staff. * To demand that EEOC comply with applicable agency, regulatory, and Congressional oversight requirements before implementing proposed Federal sector changes that could threaten a Federal employee’s right to discovery and a hearing or limit Judicial independence. * To demand that EEOC provide a plan, supported by Federal constituency groups to ensure judicial independence and subpoena authority in the federal hearings process. * To fight to ensure that EEOC’s new Strategic Plan is implemented to best serve the public. * To stop one-size-fits-all cuts to the Federal budget that will harm service to public, e.g., workers and employers EEOC serves. The focus should be on job creation - not attacking Federal employees.

--------------------------------------------
[ 1 ]. “Majority of Large Firms Offer Employees Domestic Partner Benefits” by Amy Joyce, June 30, 2006, The Washington Post.