jury duty, voting," blood donation, and family deaths; in compensation for onthe job injuries *; in retirement benefits for disability and old age*; in group life and health insurance benefits"; in travel and relocation allowances; in training and development opportunities; and in the rights and entitlements to inventions, patents, and the use of new technology, among others. 34 35 33a 36 The extent of these disparities is magnified by the obligations imposed by law and regulation upon the Federal employee. Unlike his counterpart employed by a contractor, the civil servant must proclaim his loyalty to our constitutional form of government, under oath. His conduct is circumscribed by strict rules of ethics, prescribed by Executive order and Congressional resolution and special provisions of the civil and criminal laws relating to bribery, graft, conflicts of interest, partisan political activity and fund raising," misuse or destruction of government property and records," habitual use of intoxicants," agency for a foreign principal," and the right to strike," among others. 37 38 We must also consider the impact upon employee loyalty. An employee's loyalty to his employer, be it government or private enterprise, is essential for efficiency of operations and for protection of the employer's interests. One surmises from our investigations that some contractor employees are sorely perplexed as to where their loyalties should lie-with the original contractor who hired them, the successor contractor that presently pays them, the future contractor that may hire or fire them, or the civil service supervisor in the unit in which they serve. Civil service training, career development and merit promotion programs incentives to motivate the employee to improve his skills, to enlarge his capabilities, and to adopt a public service career. These programs are mutually beneficial; the employee gains new capabilities and the Government benefits by the retention of a skilled and experienced career civil servant. The training of contractor employees on the other hand is often at Government request and either directly or indirectly at Government expense. The Government is not assured, however, of any continuing benefit from this investment. Closely related to employee loyalty and morale is the matter of performance evaluation. Performance evaluation at best is a difficult, sensitive undertaking; however, where civil service and contractor employees are intermixed on the job, it becomes exceedingly difficult, if not impossible. This is particularly true where a contractor employee may be replaced by a civil service employee, or vice versa, on a particular task assignment prior to its completion. As to on-the-job performance of the contractor employee, Government managers have advised in the past that they could get an unsatisfactory contractor employee off the job in 24 hours. However, we are cited one example where separation was delayed three months and accomplished through the quarterly evaluation for determination of the incentive award fee. Presumably at this point, the contractor was informed that the "end product", e.g., the employee's services, were unsatisfactory. Lastly, the furtherance of national policies through the civil service system may be compromised by unauthorized contracts for personal services. For example, in the Veterans Preference Act, now codified in title 5, United States Code, Congress has provided an absolute preference to veterans for positions of guards, elevator operators and custodians in the competitive service as long 205 U.S.C. 6322, 5515, 5537. EPM Supp. 990-2, pp. 630-51. 28 5 U.S.C. 8101-8150. 295 U.S.C. 8301-8348. 30 5 U.S.C. 8701-8716. 315 U.S.C. 8901-8913. $25 U.S.C. 5701-5742; 80 Stat. 323. 835 U.S.C. 4101-4118. 33 Executive Order 10096, 15 Federal Register, 389 (1950); Presidential Memorandum and Statement of Government Patent Policy, issued Oct. 10, 1963, 28 Federal Register 10943 (1963). 345 U.S.C. 3331, 3333. 35 Executive Order 11222; 3 CFR (1965). 38 H. Con. Res. 175, 85th Cong. 72 Stat. Pt. 2-B-12. 18 U.S.C. 201. 18 U.S.C. 203. 2018 U.S.C. 205, 207, 208. 40 5 U.S.C. 7321-7327. 41 18 U.S.C. 2071. 425 U.S.C. 7352. 43 18 U.S.C. 219. 445 U.S.C. 7311. 95-546-77 as preference eligibles are available." And what of the policy objectives served by the statutory restrictions on partisan political activity by Federal employees and the prohibitions against the right to strike? By what authority does an administrative officer, perhaps even a minor one, decide in the course of contracting for personal services that veterans shall not be accorded preference for custodial jobs; or that what is tantamount to Federal employees status can be conferred without the concurrent obligations to refrain from exercising the right to strike, or to avoid pernicious political activity? There is clear recognition of the national policy embodied in the personnel laws in BOB Directive A-76, which prescribes contracting policy for the executive branch. This policy directive explicitly negates any intent to alter existing authorities, or to justify departure from any law or regulation of the Civil Service Commission, or to avoid established salary or personnel limitations. Contracts for personal services which in fact and in law do depart from civil service laws and regulations, are accordingly in violation of this policy. That an agency or management official may consider the requirements of the civil service laws and policies difficult or tedious in application is no justification for turning the hiring and management of personnel over to a contractor. The foregoing findings and conclusions have been distilled from Commission experience and constitute the basis of the Commission's concern in the matter of contract practices. There is no intent or purpose to reflect adversely upon the performance or capability of any contractor or upon the unparalleled contribution of private enterprise to government programs. It is, however, considered necessary for the full discharge of the Civil Service Commission's duties and responsibilities as the central staff agency for civilian personnel, to clarify and amplify the legal, policy, and factual basis upon which contracts for personal services are proscribed under the national policy expressed in the civil service law. Memorandum for: CSF. EXHIBIT II Subject: Contracting for selected AFLC support activities. 1. Mr. Phil Dickey (DPQ) presented a briefing to the Commander concerning the results of Ad Hoc Committee findings on contracting in HQ AFLC. The following personnel were present: General Rogers, CC; General Rhodes, CV; General Easson, DP; Colonel Morin, DA; Mr. Dickey, DPQ; Mr. Mandrell, XRS; Mr. Niemer, PPP; Mr. Jacobs, DPQ; Mr. Ericsons, DAX; and Mr. Smith, DPC. 2. The Ad Hoc Committee was established to identify potential contract can-didates as a means of accommodating increasing budgetary pressures and constraints upon manpower resources. The Committee charter was to evaluate Tiger Team III findings, develop a long range plan for contracting in HQ AFIC, follow progress of DOD initiatives to contract for total BOS functions at several bases, and consider alternatives to contract savings through organic manpower and organizational adjustments. Members of the Ad Hoc Committee are: Mr. Dickey, DPQ (Chairman); Mr. Mandrell, XRS; Mr. Niemier, PPP; Mr. Jacobs, DPQ; and Mr. Smith, DPC. 3. The following recommendations were made: (a) Contract Base Operating Support (BOC) at SM-ALC as a part of the DOD program outlined in General Hill's letter, 22 April 1975, (approximately 2000 spaces). (b) OO-ALC has developed studies of organizational realignments to save manpower. 00-ALC should be requested to update their studies and brief their recommendations to the Commander. (c) Contract the total mission of MASDC (approximately 950 spaces). (d) In addition to SM-ALC and MASDC initiate studies under AFR 26-12 for contracting specific functions across the Command (Atch 1). (e) Establish an overall master plan for the program with specific annexes (programming plans) for each major project. Abolish the Ad Hoc Committee and transfer overall responsibility to the new XR Directorate of Programs. 4. Discussion: (a) The briefing pointed out that due to the loss of over 44.000 spaces since fiscal year 1968 without commensurate workload reduction, an erosion of our 455 U.S.C. 3310. mission and surge capability has become evident. The reductions in fiscal year 1976 will test the capability of the command to respond to the vital logistics responsibilities of HQ AFLC. All indicators point to even more drastic manpower and dollar losses in fiscal year 1977. Contracting provides an opportunity to save authorized manpower and ceiling by contracting low risk functions with a high return in saved spaces. The command can offset reductions imposed by higher headquarters and Congress and thereby protect the mission elements and surge capability. Contracting should emphasize cost advantage accomplishment and surge capability. There is a problem involved in the use of manpower spaces saved by contract. Civilian manpower spaces are closely tied to dollars. In normal AFR 26-12 actions manpower spaces saved by contract are returned to the Air Staff where the civilian pay represented is converted to contract money to pay the resulting contract. When Congress cuts civilian ceilings they also cut dollars represented by the ceiling loss. Program budget decisions cut manpower spaces, manyears and dollars. If HQ AFLC keeps the civilian spaces and dollars a requirement will exist for money to pay the contractor. It is assumed the Air Staff will be reluctant to accept this philosophy. The Commander agreed that a problem exists in this regard but stated that we as well as the Air Staff must reexamine traditional concepts in the light of existing circumstances. (b.) A proposal was made to direct the establishment of Word Processing Centers and Administrative Clusters in HQ AFLC to achieve an fiscal year 1976 savings of approximately 100 manpower spaces. (1) This proposal would establish Word Processing in HQ AFLC organically in fiscal year 1976 to achieve manpower savings. (A contract could not be awarded in fiscal year 1976 due to the time involved in the contract cycle.) (2) Following organic establishment, the AFR 26-12 process would be implemented for contracting in fiscal year 1977-1978. (3) The establishment of the Word Processing concept in the field was also discussed. The Commander and Vice Commander agreed that we should move out on the concept and the discussion centered around whether we should go organic first with contract to come later. Colonel Morin was asked his opinion and stated that he believed a smoother transition could be made to contract if the new concept was first proved out organically. (c.) In discussing the contracting of computer operations, General Rhodes remarked on the critical nature of our logistics information system and stressed that a rapid response work-around would be essential in the event of a contractor strike. General Rogers agreed but indicated that we must not arbitrarily dismiss any area from consideration for contracting. After considerable discussion on strike possibilities it was agreed that many low risk areas were available for contract and that it would be unnecessary to concern ourselves with the higher risk areas. (d.) The proposals of the Ogden study show the possibility of significant manpower savings through non-standard organizational alignments. General Rhodes remarked that he had examined the study and felt that some of the proposals should be more carefully examined for possible implementation. (e.) One of the contract candidates proposed was to make one package of the Distribution function of on-base delivery, the DA function of mail and message delivery, and the MA function of Intra-Maintenance transportation. It was pointed out that these functions were homogeneous in that they utilize vehicles and people to move things from one place to another. During the discussion of this candidate the functions performed by DS and MA in their individual areas which are homogeneous to the Civil Engineering functions were examined. The Commander stated that these areas as well as other areas of the same character should be identified and closely examined to determine if manpower savings could be made by placing them under a single manager. 5. Directed actions: (a.) The Commander approved in principal the contracting of BOS at SMALC, the total MASDC mission, total PMEL function, and the development of the Word Processing concept in HQ AFLC and the field, first organically, followed by contracting if feasible. Word Processing in HQ AFLC is to be implemented immediately and at least 100 spaces saved to apply against the FY 76 headquarters reduction. Word Processing in the field is to be implemented as rapidly as possible but in accordance with a programming plan to be developed by DA. (b.) DP will prepare a letter to the Chief outlining the actions directed and requesting policy clearance for the BOS and MASDC contracts. The letter will state that we will move ahead with the PMEL contract and the Word Processing development. The letter will also announce the organizational test at OO-ALC and request waiver of standard organizational structures directed in AFR 26-2. The letter will be available for the Commander's signature on 8 December. (c.) DP will prepare a letter to the Commander, OO-ALC, requesting that he update the 1973 organization study and present proposals to the Commander. (d.) The Ad Hoc Committee is abolished and XR is appointed program manager for all actions directed in 5a., above. Immediate action should be taken by XR to determine progress already made in Word Processing and the contracting of PMEL. Upon receipt of a reply from the Chief, XR should have developed a master plan to encompass the total program. P. S. DICKEY. Chairman, Ad Hoc Committee on Contracting. EXHIBIT III GENERAL SERVICES ADMINISTRATION, Hon. J. GLENN BEALL, Jr., Washington, D.C. DEAR SENATOR BEALL: This is in response to your letter of June 11, 1976, on behalf of Mr. Albert M. Kavanagh questioning General Services Administration's (GSA) determining and affectuating its workload requirements. Mr. Kavanagh is incorrect in stating that "personnel ceilings for wage grade custodial and crafts in the past have been established by means of management surveys of buildings and equipment." Overall employment ceilings, as we indicated in our letter to your office dated May 19, 1976, are established by the Office of Management & Budget. We manage our resources within the ceiling and budgetary restrictions imposed by the Office of Management and Budget and the Congress. Workload requirements are determined by survey and the application of standards. The two terms, "personnel ceilings" and "workload requirements”, are not synonymous. Though the ceiling on our work force has been reduced; the workload of operating and maintaining space for Government agencies continues to increase. Therefore, the workload for which we do not have ceiling, is accomplished by contract. Regarding Mr. Kavanagh's reference in the last paragraph, the agency has already provided the cost analysis, financial data, cost comparison, etc., required by the agency in the performance of contracting out its work. This material was supplied to Mr. Elder H. Phenicie, President, American Federation of Government Employees (AFGE), Council of Locals 1497 & 2165, in a letter dated May 14, 1976, (copy enclosed) as a response to a Freedom of Informateion Act Request concerning the contracting out of work in several locations in the Baltimore Area. We believe our previous correspondence with Mr. Kavanagh was responsive to this issue. I trust this information is of assistance to you. TERRY CHAMBERS. Deputy Administrator. EXHIBIT IV-AFGE LITIGATION OF CONTRACTING-OUT CASES BACKGROUND Perhaps no other Federal Government policy and practice has caused more concern and more unnecessary hardship to Federal employees, more waste of the taxpayers' money, or more fiscal and management irresponsibility within the Government, than the use of service contracts to perform Government work traditionally accomplished by Federal employees. Federal employee expertise accumulated over years of training and loyal employment has been thoughtlessly squandered. Employee loyalty has been rewarded by callous and arbitrary termination of employment. (For example, employees with continuing liabilities for home purchases, rent, car payments. health and life insurance, educational bills, etc., have been reduced-in force from custodial and motor pool jobs on Friday, only to return to the same Government installation on the following Monday in order to perform the same work as private contractor employees for less pay. Even less fortunate Federal employees have found themselves in unemployment compensation lines). Veterans working in special "set-aside" jobs as janitors or elevator operators have had their jobs taken away, rendering the Government's promise of employment preference to war veterans rather hollow and deceptive. Federal employees, subject to Federal merit hiring and promotion requirements and pay statutes as well as to Hatch Act conflict-of-interest, antistrike regulations, are required to work shoulder-to-shoulder with, and even supervise, private contractor employees performing the same work at different wages, not meeting the same qualification standards, and without similar political or employment restrictions, and with a very different attitude toward serving the public and executing faithfully the laws passed by the Congress. The Government has also placed itself in a position of paying massive and unnecessary severance pay, early retirement pensions, unemployment compensation, and welfare costs because of its ill-advised contracting-out of traditional Government functions. Federal agencies which have let costly contracts for services and fired their own trained employees have often done so only because of the intense pressure created by increasingly agency workloads and arbitrarily lowered personnel ceilings. (If this seems incredibly stupid, it is because it is incredibly stupid). Agencies have also openly contracted out support services without regard to the cost to the taxpayers. (Agencies were required by the Nixon-Ford administration to identify a minimum of five additional functions suitable for private contract performance and the guidance was abundantly clear that cost was not to stand in the way of carrying out this directive.) Federal employees attempting to appeal reductions-in-force caused by the contracting-out of work which they themselves had previously performed have, without exception, found that the Government's appeal procedures deny Federal employees a forum to contest such reduction-in-force actions. The U.S. Civil Service Commission has repeatedly stated: "Again, the Commission has no authority to review the validity of an agency's decision to use support service contracts to perform its functions and because the Commission's interest in the support service contract is limited to insuring compliance with Federal personnel policy as established by pertinent laws, rules and regulations, the Commission's review of the support service contract is separate from its consideration of the reduction-in-force appeal." This, of course, is the classic case of the ostrich with its head in the sand. The Civil Service Commission's reference to its consideration of service contracts for compliance with Federal personnel regulations as something separate from its review of employee reduction-in-force appeals means, of course, that the Commission's review of the contract award to assure compliance with Federal regulations governing the proper relationship between the Government and contractor employees provides affected Federal employees no opportunity to be heard or returned to work. It is, to change the metaphor, the classic case of locking the barn door after the horse is stolen. Indeed, the Commission's only reported use of this procedure resulted in a Commission determination that 22 contracts between NASA and its service contractors did not involve an improper employment relationship. This same determination was overturned by the U.S. District Court for the District of Columbia, in Lodge 1858, AFGE, et al. v. Administrator, NASA, et al. (Civil Action No. 3261-67, August 12, 1976). Faced with a Civil Service Commission which refused to allow Federal employees to demonstrate that their loss of jobs was caused by improper contracting-out actions, rather than by a legitimate lack of work or funds as required by Federal regulation; faced, also, with a shortsighted and one-sided OMB Circular A-76 governing agency contracting-out policies and procedures; faced, further, with an Administration which chose to run for re-election on negative criticism of its own work force; faced, finally, with an Administration which apparently spent millions of dollars on government support contracts which were supposed to help minority businessmen but instead were given to wellestablished non-minority controlled corporations, AFGE had no choice but to seek a remedy in Federal Courts. (As well as in the Congress and by direct political action). |