Defense Budget Plans Show Bias Against Federal Workers

Failure to hold contractors to same budget cuts is bad policy, union argues

WASHINGTON – The Department of Defense’s Jan. 10 directive on handling current budgetary uncertainties reveals the unapologetic bias of the department in favor of contractors, regardless of cost, American Federation of Government Employees National President J. David Cox Sr. said today.

Despite the fact that contractors make up 70% of the Pentagon’s costs for delivering services, while federal employees make up just 30%, DoD is requiring components to reduce the cost of the civilian workforce without any remotely equivalent requirement to reduce contractor costs.

Instead, the only contract-related requirements outlined in the department’s memo are for the services and DoD agencies to “review contracts and studies for possible cost-savings,” which DoD has been required to do by law for several years, and to get approval for contracts and contract modifications for over $500 million.

“Cordoning off contractor costs and focusing almost exclusively on cutting just federal employees is bad budget policy. Worse, it will force more extensive cuts in services for each dollar eliminated than if the costs of contractors were subject to the same level of cuts as civilian employees,” Cox said.

To minimize the impact of spending cuts on actual services, DoD should direct components to take the following actions:

1. Freeze new service contracts, contract modifications and exercise of contract options. Exceptions for mission critical activities should be subject to the same procedure as new civilian hiring: “approval by component heads or by senior officials designated by the component head.”
2. Prohibit the conversion of work performed by temporary federal employees or term employees to contractors, in accordance with federal law.
3. Ensure that no portion of functions performed by both federal employees and contractors be shifted from federal employees to contractors, so equal or greater cuts must come from the contractor workforce. Whether those cuts are equal or greater should be based upon the actual downsizing of the functional requirements.
4. Match any reduction in federal employee costs that is achieved by furloughs with cuts in service contract expenditures, and ensure that furloughs do not result in contractor performance of work performed by federal employees.
5. Authorize penalties associated with contract cancellations to the extent of the costs of voluntary separation incentives and voluntary early retirements of federal employees.

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The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 670,000 workers in the federal government and the government of the District of Columbia. For the latest AFGE news and information, follow us on Facebook and Twitter.