All Sides Wrestle With Homeland Security's New Labor-Relations System

In the aftermath of the Sept. 11, 2001, terrorist attacks, the department views the changes as essential to ensuring rapid deployment of personnel -- such as Border Patrol agents and customs inspectors -- without getting snagged on labor contracts that stipulate cumbersome procedures for such assignments or that sway managerial judgment.
Federal unions see the effort as an attempt to gut their right to collective bargaining and to roll back their clout in government workplaces.
Yesterday, Catherine C. Mitrano , senior counsel to the Homeland Security general counsel, said the new system will expand management rights and reduce the number of issues that can be put on the table for union negotiations. Rather than bargain key issues, he said, the system calls on management and labor to "confer" about workplace changes.
The department will create an internal labor board to resolve disputes between management and unions, rather than take them to the Federal Labor Relations Authority, an independent agency. Even though the department will control who gets appointed to the internal board, Mitrano pointed to inspectors general, who are selected by the White House and can challenge management decisions, as an example of why she thinks the internal labor board can operate in an independent manner.
Larry Adkins , deputy general counsel at the National Treasury Employees Union, and Sarah J. Starrett , a lawyer for the American Federation of Government Employees, said the changes will lower morale and possibly make it more difficult for the department to retain employees, including law enforcement officers.
For example, Adkins said, employees will no longer be able to rely on unions to negotiate procedures for staffing around-the-clock operations and, as a result, will have no say in which shift they work. The department also will not have to bargain with unions over how to determine "an objective way to send people against their wishes" to locations far from their families, he said.
Under the regulation, unions cannot bargain over procedures related to agency operations (such as overtime and use of technology). The department also can issue department-wide directives that can void an agreement or arrangement, Adkins said.
The rules, as a whole, Adkins said, do not ensure the right to collective bargaining and go against federal labor law.
The debate over the new labor-management system, and whether the department exceeded the bounds in designing the system, will probably be settled in the courts. Federal unions have filed suit to stop the rules that overhaul labor relations and streamline employee appeals of disciplinary action. Similar changes planned at the Defense Department also have drawn a lawsuit from unions.
Talk Shows
Rep. Jon Porter (R-Nev.), chairman of the House federal workforce subcommittee, will be the guest on "FEDtalk" at 11 a.m. today on and WFED (1050 AM).
James Lockhart III , deputy commissioner at the Social Security Administration, will be the guest on "The IBM Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).
"Federal Workplace Charity Sets a Record" will be the topic on the Imagene B. Stewart call-in program at 8 a.m. Sunday on WOL radio (1450 AM).
Gary M. Shiffman , chief of staff at U.S. Customs and Border Protection, will be the guest on "Code Red!" at 6 a.m. Thursday on WMET radio (1160 AM).

DHS Workers To Be Reimbursed $20 Million For Unpaid Overtime
June 10, 2005

The American Federation of Government Employees announced Thursday that it won a $20 million initial payment in its eleven year battle with the agency formerly known as Immigration and Naturalization Services over unpaid overtime for thousands of federal employees. Payments totaling $20 million will be made on or before June 15 by the Department of Homeland Security, which absorbed INS when it was created.

The payments are in compliance with an order to compensate more than 8,600 employees of the former INS who worked overtime but were improperly paid.

“Employees of the former INS will be ecstatic to learn that after years of agency delay and obstruction, they will finally get paid what is due them and what was illegally withheld from them,” said Joe Goldberg, AFGE assistant general counsel and the attorney who pursued the case. Goldberg noted that the agency’s offer to settle the grievance for $7 million was rejected by AFGE.

The $20 million initial payment does not mark the end of the AFGE national grievance that was filed in June of 1994. AFGE and DHS have yet to reconcile claims for undocumented overtime (e.g. time worked while on travel), legally termed “suffer or permit” overtime, and process claims for those who are in dispute as to whether they are eligible to be covered by the grievance.
OMB directed U.S. Mint to reopen job competition
By Kimberly Palmer
[email protected]
The U.S. Mint, the Treasury Department bureau responsible for creating coins, reopened a job competition involving forklift operators after the Office of Management and Budget urged them to do so.
According to documents provided to Government Executive by the American Federation of Government Employees, in April 2005, the acting assistant secretary for management at Treasury reversed a previous decision to award the contract to the federal employee team. Jesus H. Delgado-Jenkins, who has since left the department, wrote, "Based on OMB's direction, the Mint should reopen the [competition] in order to solicit expressions of interest from local and small businesses."
The competition, which involves about 60 employees responsible for operating forklifts in Denver and Philadelphia, was first announced in October 2003. When the Mint closed the solicitation in September 2004, it had not received any private sector bids, but did receive one from a team of federal employees.
The contracting officer investigated the lack of interest from the private sector by contacting four potential vendors, and determined that none were suitable because they specialize in maintaining and renting equipment and not supplying forklift operators.
As a result, in November 2004, the contracting officer recommended that the agency accept the bid from the federal employee team. Delgado-Jenkins approved this decision in February 2005.
He rescinded his approval of that decision two months later after OMB "provided direction to the department," according to his April 2005 memo.
OMB does not typically get involved in agency decisions regarding specific job competitions or contracts. The U.S. Code regarding the Office of Federal Procurement Policy, the arm of OMB that develops procurement policy, includes a "noninterference with executive agencies" clause that specifies OFPP should not "interfere with the determination by executive agencies of specific actions in the award or administration of procurement contracts."
Diana Price, procurement specialist for AFGE, which represents employees involved in the competition, called the situation an example of OMB overstepping its authority. "Federal agencies that follow the competitive sourcing rules but don't come to OMB with plans to privatize federal jobs are being sent back to do it again," she said.
An OMB spokeswoman said the agency often is consulted when a competition doesn't attract any private sector bids. "When activities in a competition are highly commercial in nature, OMB often recommends reopening a competition if the private sector decides not to bid," said spokeswoman Sarah Hawkins.
"Ultimately, agencies decide or determine if they want to reopen a competition," she added. She said that in the past two years, job competitions involving two or more private sector bidders generated 20 to 40 percent more savings than did competitions that did not attract any private sector bids.
A Mint spokeswoman also defended OMB's involvement in the reopening of the competition. "Although neither OMB nor the Treasury Department intervenes in the procurement process of an agency, they may provide guidance on how an agency can best comply with A-76. This is essentially what happened in this particular case," she said.
Allan Burman, president of the federal arm of Jefferson Consulting Group and former OFPP chief, said it is not clear if OMB acted improperly in this case. "You always try to stay out of individual contracting actions... on the other hand, the purpose is to try to get competition," he said.
OMB's revised Circular A-76, which governs job competitions, says that if an agency receives no private sector bids, then the contracting officer must investigate the reasons and recommend that the agency either revise the solicitation or award the contract to the federal employee team.
In this case, the contracting office spoke with four potential private sector bidders to determine why they did not place bids. Those companies were Hyster Incorporated in Cleveland, Ohio; Yale Forklifts of Greenville, N.C.; Nissan Forklift Corp. in Marengo, Ill.; and Clark Material Handling Company of Lexington, Ky.
The contracting officer discovered that none of the companies were aware of FedbizOpps, the Web site through which agencies announce solicitations for bids. In addition, the contracting officer determined that none of the companies were well-suited to perform the work required.
According to a Mint employee who asked not to be identified, the agency plans to again extend the deadline for bids past the current June 17 deadline in the hopes of attracting more private sector bidders. The employee said that the Mint is preparing to place advertisements for the competition in local newspapers.

The Washington Times
Medics resort to expired drugs
By Matthew Cella
Published June 9, 2005
D.C. paramedics say their supervisors directed them to use expired medications this month because fresh supplies were unavailable.
The medications included such lifesaving drugs as epinephrine, which is used to treat asthmatics and allergic reactions, and nitroglycerin, which is used for heart-attack victims.
"Many of the individuals were simply told to disregard the June 1 expiration date and use them through the end of the month," said Kenneth Lyons, president of the American Federation of Government Employees Local 3721, which represents the city's medics.
Paramedics received fresh -- but insufficient -- quantities of medications Friday after Mr. Lyons called the department's property division, various emergency medical services (EMS) supervisors and the head of EMS operations, the union leader said.
Alan Etter, spokesman for the D.C. Fire and EMS Department, said officials received complaints from two paramedics about expired drugs and quickly replaced their medications.
"On June 1, it was brought to the attention of our property division that they had expired medications, including epinephrine and nitro tablets," he said. "Why on May 31 they weren't notified is under review.
"As to the allegation they were told to use expired medication, that is an allegation and that will be looked into as well," Mr. Etter said.
Using expired medication is an unacceptable practice in emergency medicine, said Paul M. Maniscalco, a board member of the National Association for Emergency Medical Technicians.
Such medications are "front-line" drugs that offer the first -- and often best -- chance for saving a life, he said.
"If you establish a standard with protocols, you have a moral and ethical responsibility to provide the tools to operate up to that standard," Mr. Maniscalco said. "Clearly, a professional EMS system that is required to give top-notch care is going to make sure they have those medications."
Several paramedics told The Washington Times that they questioned superiors or supply personnel about the expired medications and that they were told to continue using them.
One paramedic said he was told on two occasions by supervisors to continue using the drugs. One of the supervisors said the medications were effective beyond the expiration date.
Another paramedic said he was told by a property division employee and by an EMS supervisor to continue using the expired drugs.
" 'You have been authorized to use it for another 30 days,' is what I was told," said the paramedic, who asked not to be identified.
A third paramedic said he was instructed to use expired medications by someone in the property division because no unexpired medications were available.
Mr. Etter said it is the responsibility of paramedics to report any expired medications to supervisors, who then notify property division to replenish supplies. Only two paramedics have done so, he said.
Mr. Lyons said it is "absurd" for fire officials to say that only two units were carrying expired medications.
"We all get the same medications," he said. "It expires at the same time."
Mr. Lyons said that ordinarily his ambulance carries 20 doses of epinephrine 1:1000, three doses of nitroglycerin and between six and 10 doses of adenosine.
On Friday, his ambulance was stocked with five doses of epinephrine, one dose of nitroglycerin and two doses of adenosine, which is used to slow extremely fast heart rates.
"We have a very limited supply," he said. "The medicine we do have is not sufficient to carry out for the next month."
Mr. Lyons said those medications are especially critical at this time of year, when the weather gets warmer and air quality worsens. He predicted that the shortage would lead to providers stealing medications from hospitals or bartering among ambulance crews.

Bush administration expanding personnel reform quickly
By David McGlinchey
[email protected]
The Bush administration is not waiting for the Defense and Homeland Security departments to complete their personnel overhauls before moving the effort to the larger federal government, a senior Bush administration official said Friday.
The current Defense and Homeland Security personnel overhauls are designed to scrap the General Schedule system, implement performance pay, limit union bargaining and streamline the appeals process. Officials at the Office of Personnel Management developed legislation last month that would extend similar changes to the rest of the federal workforce. Some lawmakers, however, have called on the Bush administration to wait for results from the ongoing overhauls.
Clay Johnson, the deputy director for management at the Office of Management and Budget, said that every agency will deal with personnel reform differently, and there is no benefit in waiting for results from Defense or Homeland Security.
"We should not wait to see what happens at DoD or Homeland Security; these are all independent events," Johnson said during a conference call with reporters. "There are some agencies, in my opinion, that could more readily implement [reform] than DoD or DHS."
According to the draft legislation, agencies would be required to have a plan developed by 2008 for the implementation of an OPM-certified performance pay system. If agencies cannot meet that deadline, they would be required to adopt a standard OPM system. The plan calls for the General Schedule system to be eliminated by 2010.
The proposed legislation has not yet been sent to Congress, and OPM officials have declined to discuss it. On Friday, Johnson said the bill would be sent to lawmakers "in the weeks ahead."
In February, Sen. George Voinovich, R-Ohio, said that he wanted to see results from the first reforms before the initiative was "cascaded" to other agencies. He acknowledged that he has a difference of opinion with the Bush administration, but he said he would try to slow the timeline.
Union leaders criticized the faster timeline.
"I think it's pretty arrogant. The final regulations aren't even written at the Department of Defense, and at DHS the implementation is far down the line," said John Gage, president of the American Federation of Government Employees. "At the minimum, wait to get some experience in this."
Johnson also said that federal employees would not have their salaries lowered in the new system. Gage, however, said that he believed the underlying motivation for the new pay system was to lower federal pay levels.,1413,209~22484~2914195,00.html

Mentone man sentenced for embezzling from union
Friday, June 10, 2005 - A Mentone man convicted in February of embezzling money from a union of civilian Department of Defense employees was recently sentenced to 120 days of jail time, three years of supervised felony probation and 300 hours of community service, according to a news release issued Wednesday by the U.S. Department of Labor.
Jerome "Gerry" L. Davis, 56, was sentenced by San Bernardino Superior Court Judge Martha Slough. Slough will separately order Davis to make restitution to the union and will bar him from holing a union office for 13 years following his release, officials said.
Davis had been found guilty of one count of grand theft of American Federation of Government Employees Local 1227 union funds, officials said. Davis charged personal expenses and withdrew cash from a union account between June 1999 and June 2001, according to a Department of Labor investigation.
The union represents employees of the Defense Finance and Accounting Service of the DOD in San Bernardino. Davis had worked as a lead accounting technician at the San Bernardino Facility since 197. Davis founded the union and served as its president until losing his reelection bid in 2001.
The case is the result of an investigation by the Department of Labor's Officer of Labor management Standards in Los Angeles. The department reported that the investigation was conducted with the full cooperation of the unions currents officers.

Savings through job competitions increase


While unions say the government’s latest report overestimates the savings it achieves by opening federal jobs to competition with the private sector, an industry group says the findings are indicative of the greater savings that could be achieved through more competition.
Public-private competitions completed in fiscal 2004 are expected to yield $1.4 billion in savings over the next five years, according to the Office of Management and Budget’s June 7 report. The savings represent a 27 percent reduction in the cost of commercial activities, those that could be done by the private sector, compared with costs before conducting competition.
Federal employees won 90 percent of the positions competed. Savings resulted from reducing costs through federal employees’ innovative approaches to commercial functions, as well as from private contractors who offered the best value for some functions, the report said.
“If all the positions on the agency inventories [of commercial jobs] were competed, the federal government would save tens of billions of dollars,” said Chris Jahn, president of the Contract Services Association of America, based in Arlington, Va.
However, with federal employees winning 90 percent of the jobs competed, “Congress should be concerned that the one-sided results will cause private bidders to walk away,’’ Jahn said. “If that is the case, the savings will disappear.”
To John Gage, president of the American Federation of Government Employees, the 90 percent win rate by federal employees means the government is wasting money to review jobs for privatization, only to keep them in-house. “It’s time for OMB to stop frivolously spending hardworking American’s money, and own up to its mistakes,” he said.
Both Gage and Colleen Kelley, president of the National Treasury Employees Union, said OMB overestimates savings.
“Hundreds and sometimes thousands of federal employees are immediately and adversely impacted by the decision to conduct a competitive sourcing study,” Kelley said. “Employees whose jobs are part of the study often opt for reassignments and early retirements, rather than wait for the outcome of the study. So even if the employees retain the work, many talented and experienced federal workers are no longer at their jobs.”
Other OMB findings:
• Every job examined through competition, regardless of whether the work is awarded to the government or to the private sector, saves $22,000 annually. Some positions in information technology, maintenance and property management, logistics, human resources, and finance and accounting showed annual savings ranging from $25,000 to $37,000 per job.
• Agencies saved more than $32,000 per job in competitions with two or more private-sector bidders, while they only saved $18,000 per job in contests when the private sector chose not to bid.

The Washington Times
Records show expired-drugs alarm
By Matthew Cella
Published June 11, 2005
D.C. fire department documents show senior officials had prior warning that critical drugs would expire June 1, despite statements that they did not know in advance that paramedics were carrying expired drugs.
According to internal memos received by The Washington Times, a city paramedic informed a senior manager of the Emergency Medical Services Division in May about the problem.
Fire Chief Adrian H. Thompson said yesterday that he is personally investigating who was notified and when, and that he will determine who, if anyone, will be held accountable.
"I'm looking very closely to see how it occurred, why it happened and make certain it can't happen again," he said.
Chief Thompson said that as of yesterday paramedics had "adequate" supplies of medications.
The Times reported Thursday that D.C. paramedics said their supervisors directed them to use the expired medications because fresh supplies were unavailable.
The medications included such lifesaving drugs as epinephrine, which is used to treat asthmatics and allergic reactions, and nitroglycerin, which is used for heart-attack victims.
According to the internal memorandums, paramedic Jasper W. Sterling wrote Capt. Henry Lyles on May 20 acknowledging instructions to check supply bags used for special events to make sure the medications were all current.
Mr. Sterling lists four medications that were set to expire June 1, and 11 others that would expire before the end of the year.
In another memo, dated May 23, Mr. Sterling documents his efforts to replace the medications that would soon expire.
"Medical supply was not able to provide replacements for all the medications in question, and were insufficiently stocked with others," Mr. Sterling wrote. He then warned that the bags were carrying a series of medications that would expire in 2005, including epinephrine 1:1000. He listed its expiration date as June 1.
Chief Thompson said Capt. Lyles, who is in charge of special operations, was not the appropriate person to notify about the lack of supplies.
"They should have gone to procurement about the medications," he said.
Kenneth Lyons, president of the American Federation of Government Employees Local 3721, which represents the city's medics, said the memo should have been a warning to all supervisors, regardless of which one received it, since all the units get their medications from the same place.
"That red flag was totally ignored," he said.
Chief Thompson said it was not clear whether the problem was the fault of EMS administrators or supply personnel in the property division.
Mr. Lyons said he received reports yesterday morning that some medics on the overnight shift were called to EMS headquarters in Northwest and ordered to write reports indicating they were not carrying expired medications on June 1 and that they were not directed to use expired medications.
"They felt they were being brought up there with the intent to intimidate them and to submit documents that were not true," he said. "If the chief is going to investigate anything, that's what he needs to investigate."
Chief Thompson said he had no knowledge of the reports.,0,6092449.story?coll=dp-business-localheads

NASA redoing job reviews
Employees are "shaken again" by the process, but many may be offered a second chance.

June 11, 2005

HAMPTON -- NASA Langley Research Center is redoing a process that led to 18 layoffs announced in April.

It's not uncommon for government agencies to repeat a system that downsizes the work force - called RIF, or reduction-in-force.

But it has been more than 30 years since NASA Langley has been through the process. In an unusual move, Langley is letting employees in the center's fabrication shops improve and resubmit their resumes before personnel officials reconsider their job status by month's end.

In 2003, NASA forced Langley's metal machine shop to compete with businesses, part of a Bush administration measure called "competitive sourcing."

The shop workers perform several technical jobs, including making precision models for aeronautics research in Langley's wind tunnels.

NASA beat out the private sector in the competition but not without offering to cut its work force in half.

In April, Langley management notified 18 workers that they would be laid off in July, 18 that they would lose their grade and 19 that they would be assigned to other jobs.

But since then, some technicians have voluntarily left the agency, requiring NASA to go through the entire process again. The system ranks employees according to their tenure, military experience, long-term government service and good performance.

Technicians complained that the original reduction-in-force was flawed. For example, some people who kept their jobs had less experience than others who received pink slips.

Rerunning the process could improve job offers for some and give others a second chance at employment, Langley spokeswoman Marny Skora said. But the fear is that NASA might retract job offers made to some workers in April, said Marie Lane, president of the local chapter of the American Federation of Government Employees.

"People are kind of shaken again," she said.

The process should be complete by month's end, with the personnel actions taking effect 60 days later.,1413,113~7244~2916088,00.html

Fairbanks Daily News-Miner

Eielson cutbacks would hit hard in North Pole
Saturday, June 11, 2005 - , Staff Writer
Some North Pole homeowners aren't waiting around to find out what happens to the local economy if Eielson Air Force Base loses the 354th Fighter Wing.
Hank Bartos, owner of Century 21 Goldrush and Coldwell Banker Realtors, has already seen people rush their houses onto the market in the hopes of selling before the reductions cause a possible economic downturn.
While the North Pole real estate market has been hot--some would even say overheated--the May 13 announcement that the Pentagon wants to transfer from Eielson more than 2,800 military personnel and their 3,300 dependents--about 7 percent of the borough's population--to bases Outside has many home owners worried about falling property values.
"People are extremely nervous and emotional," Bartos said. "They don't know what to expect."
Residents in the Eielson bedroom community of North Pole fear the economic impact of losing Eielson would be felt through a drop in real estate prices, declining school enrollment and loss of businesses. It's a combination that could cause a depression for the Richardson Highway town of 1,500.
Eielson contributed $374 million to the regional economy in 2004, according to statistics released by Eielson.
Bartos has watched three buyers back out of deals and lose earnest money in the past week. All three cited concerns about Eielson.
"People have built up equity in their property and they're scared to lose it," he said.
But others caution that a partial cooling of the real estate market could benefit the area by stabilizing property prices.
North Pole's real estate market has been spurred by a large military presence, low interest rates and affordable property prices compared to neighboring Fairbanks.
Houses in the region have been appraising between $125-$160 a square foot with annual appreciation of between 6 percent and 8 percent, said Stacy Risner with the Fairbanks Board of Realtors.
Three hundred and nineteen houses were sold in North Pole last year. Since January, 130 houses have been sold and 82 more are in the closing process. Another 87 are on the market, Risner said.
"If it slows down a little, it won't necessarily be a bad thing," Risner said.
North Pole Mayor Jeff Jacobson said the economy could handle a small dip in property values.
"My concern is how far the cooling down is going to go," Jacobson said.
The Fairbanks North Star Borough was enjoying a blossoming economy before the Defense Department made its May 13 recommendations to close 33 major bases and substantially reduce 29 more. That, coupled with recent setbacks to the proposal to build an all-Alaska gas pipeline, has left many in the region worried about the future.
"We had a beautiful rose bush growing and the BRAC announcement nipped the bud right off the bush," Bartos said. "And then the Sempra announcement came along and whacked off the whole top of the bush."
Despite the recent spate of bad news, Bartos and Jacobson cautioned that it was too early in the process for people to overreact. It's been less than a month since the Pentagon released its list of recommendations and the process won't be finalized until it reaches Congress in September.
In the meantime, panic among home owners would cause unnecessary harm to the economy, they said.
"If a lot of people flood the market with houses, it's going to have a big impact," Bartos said.
Bad for business
Rhonda Boyles took a risk in 1999 when she opened a Wendy's restaurant in North Pole, her third.
While North Pole's population wasn't large enough to support a restaurant on its own, Boyles justified it by including numbers from Eielson, Fort Wainwright and other communities nearby, giving her a total of 14,000 potential customers.
The restaurant has had its ups and downs over the years, but Boyles could always depend on the patronage of military families.
That could change if Eielson's population disappears.
Boyles hopes the additional 1,500 Stryker Brigade troops slated for Fort Wainwright will pick up the slack if the Pentagon's plans for Eielson are approved by Congress. If not, it may mean that her other two Fairbanks stores will have to carry the North Pole store for a while.
"I've decided to watch and see what happens at Fort Wainwright," Boyles said.
Boyles isn't alone in holding out hope that Eielson will be spared. Nearly every business in North Pole and Fairbanks would be affected by the Pentagon's plan, according to state economists. Eielson contractors estimate the base makes up about 20 percent of their annual income.
Realignment would affect the food industry, rental market and the fuel distributors; all of which in turn would impact sales tax revenues in North Pole, Mayor Jacobson said.
But while base realignment would have a substantial impact on the economy--employment on Eielson accounts for nearly 9 percent of all jobs in the borough--it's unlikely to cripple most businesses.
Maria Sabedra, owner of Wallpaper Warehouse, has seen her business rise and fall with the fortunes of the area's military bases. She had hoped Eielson would spur another period of growth, but now she's being more cautious in her predictions.
"Eielson looked like a potential source of profit down the road that I'm not going to get now," she said.
Sabedra's more concerned how the loss of Eielson's $182 million annual payroll will affect the spending habits of other area residents. Less money going into the community will mean fewer dollars spent by non-military families as well.
"It has a double impact," she said.
Shane Burnett, president of Arctic Fire & Safety Equipment, has also watched his company grow along with the local military bases. Burnett now employs 28 people and said he has a hard time accepting the Pentagon's proposal to move the 354th Fighter Wing.
"I can't fathom it," he said. "It just doesn't seem real."
For the past 13 years, Burnett has done business with Eielson at least four times a week. While his business would survive, Burnett said removing Eielson would be "devastating" to the local economy.
"It would be as much a negative impact on our business as the trans-Alaska pipeline was a positive one," he said.
Sam Brice, owner of Brice Inc., a construction contractor and quarry operator, would likely be forced to reduce the number of seasonal workers he hires in the summer if Eielson realigned. Brice employs about 20 construction workers in the winter and an additional 80 people in the summer.
"That takes a large cut out of our pie," Brice said.
Realignment would have a ripple effect on contractors. Losing Eielson would mean not only a loss of military projects, but would also increase competition for other contracts, effectively shrinking the market.
"You can say the same thing about the car dealers," Brice said, "because there'll be fewer people to sell cars to."
Jay Johnson, general manager of Alaska Petroleum Distributing, said he would also have to lay off staff if fuel deliveries to Eielson dropped off.
Jet and other fuel deliveries to Eielson make up about 20 percent of his company's business. Johnson said he's diversified enough that Eielson's loss would not be catastrophic.
Dick Engebretson, owner of Aurora Construction Supply, makes his living supplying contractors who do business with the Air Force. He contends that cutting forces at the base would be a costly mistake both for the community and the military.
"My gut feeling is that it wouldn't take the government long to figure out they screwed up and bring it back," Engebretson said.
Short-term gains
Mothballing the base would most likely provide Jim Johnson, president of Sunex Inc., with more work in the short term. Johnson's company provides consulting and monitoring of industrial waste cleanup projects.
In the long run, though, the loss of Eielson would have the same negative effect on Sunex as on many other local retailers and service providers.
"We're a small company," Johnson said. "Definitely the best long-term situation for us would be if they just stayed as they are."
Johnson estimates Eielson contracts make up 25 percent of his business.
George Bennett, president of the American Federation of Government Employees Local 1836, which represents secretaries to heavy equipment mechanics in the civil service; said 319 civil-service jobs would be cut under the Pentagon's plan. About 200 of them would come back as contractor jobs, but those jobs wouldn't pay as well or have the benefits of the current positions, Bennett said.
National defense
Greg Ashbach, owner of A-1 Sani-Can in North Pole, is more concerned with the country's military readiness than the fate of Eielson. He figures the government must have a good reason for wanting to move Eielson's A-10 and F-16 jet fighters to bases in the Lower 48.
"If it needs to be realigned, it needs to be realigned," he said.
About 20 percent of A-1's business is Eielson-related and any reduction at the base would affect Ashbach and his neighbors equally.
"It will definitely affect the economy, but I think our military is a little more important than just myself," he said. "If the people studying this think it's better to realign Eielson then they must know what they're doing."
The Pentagon says the realignment would save nearly $230 million annually.
While local officials maintain that the region's economy is diverse enough to handle the loss of Eielson, they're not giving up without a fight. A combined statewide and local task force is preparing to argue on Eielson's behalf at a public hearing with the Base Realignment and Closure Commission on Wednesday in Fairbanks. Historically only 15 percent of bases on the BRAC list have succeeded in getting removed and local officials have already been warned that the effect on the community is not one of the commission's top priorities.
Economic impact ranks sixth on the list of eight criteria the Pentagon is to consider in closing or realigning a base.
Despite the slim odds, business owners are hoping for the best.
"It just can't happen," business owner Burnett said. "It's just too important to the economic health of this region.
"I've got my fingers crossed."

FDIC succeeds at new pay plan
A small agency has lessons for others looking at pay-for-performance plans
BY Brian Robinson
Published on Jun. 13, 2005

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As federal agencies such as the Defense and Homeland Security departments plan to implement pay-for-performance programs later this year, the much smaller Federal Deposit Insurance Corp. has become an unlikely trend setter.
The FDIC took the plunge into pay-for-performance in October 1997, and it's now on the fourth version of the program. And changes are likely again when FDIC officials meet with union representatives this summer to hammer out a new agreement.
The structure of pay-for-performance programs at DOD, DHS and other agencies is unclear because they have not finalized details, not because officials are struggling to devise sufficiently objective performance measurements that are satisfactory to all sides.
"We're not in a rush to get things decided [on pay for performance] until we work out what these performance measures should be," said Larry Orluskie, a DHS spokesman.
DHS has been working on this and other issues with unions since September of last year, he said. Nevertheless, Orluskie said, the department still intends to begin implementing the new performance management process in October.
Based on the FDIC's experience, pay-for-performance newcomers should plan for their first efforts to not be perfect.
"When we first started, we had each employee judged by a manager, which generated some 34 pages of reports per employee," said Miguel Torrado, associate director for human resources at the FDIC. "The sad thing was that, after all that effort, the actual difference in pay raises was minute. The complexity of the process just didn't match the results."
So the FDIC scrapped that process in favor of a pass/fail approach. All employees are now first measured against certain expectations, which they are aware of, and if they don't meet them, they receive failing grades. Only those who pass participate in the pay-for-performance process.
All unionized employees who pass get at least a 3.2 percent raise, with those rated in the top one-third of contributors getting a 6.2 percent raise. Nonunionized and nonmanagement employees who pass are rated within five groups based on their level of contributions and get as much as 5.5 percent raises. Top contributors also get a 2 percent bonus.
FDIC executives and managers get pay raises up to 10 percent and can receive bonuses of up to 8 percent.
The success of pay for performance at the FDIC shows that more rather than fewer graduated reward levels are better, Torrado said. Agencies also should provide significantly different rewards.
Agencies need to involve unions from the beginning, he said. The FDIC cannot legally change personnel plans without first negotiating with the union, he added. Pay-for-performance programs are evolutionary and require officials to consider employees' concerns and feedback.
"To some degree, negotiations with the union are data- and information-driven," Torrado said. "But overall, it's an extremely complex dance."
That's something DOD and DHS are discovering. Several of the biggest unions involved in the current negotiations are unconvinced by what they have heard from the departments about the new personnel management systems, and they are hostile to plans to impose a pay-for-performance system.
"It's the No. 1 issue for our members, and it's been a principal item of discussion with the DOD," said Matt Biggs, legislative and political director for the United DOD Workers Coalition. "But they've failed to negotiate on any of our proposals. Despite the fact that DOD says it will lead to increased pay, we think it will instead lead to rewards for just a few and lower pay for most of the DOD workforce."
John Gage, national president of the American Federation of Government Employees (AFGE), who refers to pay for performance as "pay for patronage," thinks the complexities of managing the system and the resentment it would produce in workers would hurt productivity at the agencies that implement it.
"It just means an additional burden for agencies, particularly in DHS, which is a mess anyway," he said.
However, he and other union leaders seem resigned to adding pay for performance to the government landscape, although that doesn't mean they'll be meek about it.
AFGE and other unions filed a lawsuit in federal court earlier this year challenging the legality of DOD's proposed National Security Personnel System, which includes the pay-for-performance program. Biggs said the unions will also go back to Congress "to convince it that pay for performance is good for neither homeland security nor national defense."

No summer vacation for competitive sourcing
Lawmakers, unions and OMB prepare for more battles over jobs
BY David Perera
Published on Jun. 13, 2005

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As lawmakers meet this summer to approve spending bills for fiscal 2006, they will be dealing with a substantial number of House-approved bills that uphold the status quo on competitive sourcing, a policy that encourages agencies to cut costs by putting some jobs up for bid against the private sector.
But opponents of competitive sourcing are promising to act. For each of the past two years, Rep. Chris Van Hollen (D-Md.) has offered an anti-competitive sourcing amendment to the Treasury-Transportation Appropriations bill. The amendment would block federal agencies from using the revised Circular A-76, the Office of Management and Budget's rulebook on competitive sourcing. He will likely offer it again this year, a Van Hollen spokeswoman said.
House appropriators stripped $2 million from the Army Corps of Engineers' budget request for competitive-sourcing studies, even though the agency is preparing to release a request for proposals to compete all U.S.-based information technology support jobs.
According to recently released figures from OMB, every dollar spent on competitive sourcing in fiscal 2004 will produce $20 in savings during the next five years. IT jobs were the second most-competed jobs in fiscal 2004, OMB's latest analysis shows.
Union officials disputed the savings that OMB officials cite. "Time will tell if that kind of money is saved, and I believe it will not be," said Colleen Kelley, president of the National Treasury Employees Union.
"Hundreds and sometimes thousands of federal employees are immediately and adversely impacted by the decision to conduct a competitive-sourcing study," Kelley said. "The figures OMB demands from the agencies in no way reflect the true costs."
John Threlkeld, the American Federation of Government Employees' Capitol Hill lobbyist, dismissed the agency's findings. "If only OMB devoted as much time to ensuring agencies accurately track the costs of conducting privatization reviews as it does trumpeting wholly projected and completely unverified savings estimates."
OMB officials, meanwhile, are preparing to expand competitive sourcing. They have issued new guidance and promised greater oversight of agencies' competitive-sourcing initiatives. In a memo issued last month, OMB instructs agencies that, with the exception of contracting officers, no job should automatically be exempt from competitive sourcing. An exemption should be granted for a job only if its loss to the private sector would result in substantial risk to the agency's ability to accomplish its mission, the OMB memo states.
To expand their oversight of competitive sourcing, OMB officials will ask agencies to inform them about competitions in which no companies participate, said David Safavian, administrator of the Office of Federal Procurement Policy.
Paradoxically, while competitive-sourcing foes portray the policy as a threat to the federal workforce, OMB officials worry that job competitions suffer from anemic industry participation.
"Our biggest challenge right now is to make sure that the private sector maintains an interest in this process," Safavian said, noting that in fiscal 2004, government teams won 91 percent of all competitive-sourcing bids.
OMB's analysis shows that competitions involving two or more private-sector bidders generated about $10,000 more in savings per full-time equivalent employee than competitions with only one or no private-sector bidders.
"You never know whether we have a benchmark level of service or a benchmark cost until you've competed it against the private sector," Safavian said. n
Saving dollars
A recently released Office of Management and Budget report on competitive-sourcing activities during fiscal 2004 states that:
n Agencies held 217 competitions involving 12,573 full-time equivalent employees (FTEs).
n For every FTE studied, the government will save $22,000 per year. That amounts to a savings of $1.4 billion in five years.
n Agencies will achieve those savings through workforce realignments, process re-engineering, technology investments, operational consolidations and other efficiencies, according to the report.

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