5 Things You Need to Know about the Latest Governmentwide Reorganization Efforts

The Senate Subcommittee on Regulatory Affairs and Federal Management recently held a hearing on the Trump administration’s governmentwide reorganization efforts, and AFGE President J. David Cox Sr. has submitted testimony to explain federal employees’ views on the issue.

Here are five things you need to know about the latest governmentwide reorganization efforts:

1. Almost no agency has complied with the administration’s directive to consult with their workforce when developing a plan

President Trump in March issued an executive order directing the administration’s budget office – the Office of Management and Budget (OMB) – and agency heads to create agency reorganization plan within 180 days. In April, OMB sent out a memorandum with instructions regarding what plans were supposed to include and the policies they were supposed to implement. The OMB memo told agencies, “When developing their agency reform plan in coordination with OMB, agencies should consult with key stakeholders including their workforce.”

But so far, almost no agency has approached AFGE, the elected representative of employees in 205 agencies. Some agencies even tried to bypass the union altogether. The Social Security Administration (SSA), for example, sought information directly from employees using “Idea Scales” to collect data. This kind of “data collection” is just a show with no real intention of taking employees’ opinions seriously.

2. The downsizing, downgrading, and privatization of federal jobs in the OMB memo are reminiscent of failed management agenda in the recent past

Both the Clinton and the George W. Bush administrations had management agendas that included some of these elements. In both cases, many produced costly failures.

The Bush administration’s effort to subject half of all federal jobs to privatization was a massive failure due to the controversial process and the cost of privatization – federal employees have proven to be two to three times cheaper than contractors. But many agencies are still trying to outsource their functions, including core capabilities. No wonder some scholars, including former Bush administration officials, speak of hollowed-out federal government.

3. The “consolidation” effort is just another thinly veiled attempt to shift work and profits to the private sector

OMB is encouraging governmentwide “consolidation” of so-called “shared services” such as financial management, human resources management, information technology, acquisition, property and logistics management. These services will then be provided by centralized cross-agency service providers such as the Defense Finance and Accounting Service or the Office of Personnel Management. Some functions of government are indeed well-suited to centralization. The theory behind the shared services concept is based on economies of scale and is supposed to result in cost savings.

But OMB is going beyond mere centralization. It encourages private sector entities to either compete with government-sponsored service providers or enter into “partnerships” with these agencies to provide the services. It’s not efficiencies that drive OMB’s quest for consolidation, but rather corporate profits.

GSA’s Federal Acquisition Service, for example, charges non-GSA agencies between $200-$400 million per year in procurement transaction costs. NASA and NIH each earn tens of millions of dollars per year from providing procurement information technology services to other federal agencies. But much of this money is shared with private contractors serving as subcontractors or vendors.

“Mandating use of shared service providers is simply a way to shift some of the work (and profits) to the private sector,” Cox said.

4. Cutting budgets and workforces may score political points – until citizens need these employees and programs

Not long before Hurricanes Harvey and Irma devastated Texas and Florida, a budget proposal was put forth to cut almost $1 billion from FEMA’s disaster relief account. Needless to say, programmatic reductions may sound good in principle until citizens need these programs. AFGE’s analysis of the administration’s 2018 budget proposal found that many of the proposed cuts were for the sake of saying that something was cut.

“This is neither a sound budget process nor a way to provide citizens with needed services,” Cox added. “Doing more with less is not a strategy. It’s a slogan.”

5. Mindless attacks on government programs and the employees make for good politics but bad government

Instead of mindlessly consolidating and cutting services in order to achieve dubious and often illusory savings, not to mention degradation of services, Congress should focus more on empowering and improving the quality of the workforce. AFGE supports better training of both supervisors and employees so that clear expectations are established and performance is measurable. But OMB’s management plan du jour is just another mindless attack on government programs and the civil service.

AFGE shares the concerns of Congress that agencies be well-managed, efficient and effective, and we will work with Congress as we strive to motivate and maintain high quality government services provided by dedicated public servants.


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