December 14, 2011
Christina Erling

AFGE Commends House and Senate Conferees to the FY12 National Defense Authorization Act

WASHINGTON – The American Federation of Government Employees issued the following statement in response to the FY12 National Defense Authorization Act:

The American Federation of Government Employees commends House and Senate conferees to the FY12 National Defense Authorization Act for their attempts to make Department of Defense sourcing and workforce management laws more accountable to taxpayers and fairer to civilian employees, as well as including many of our priorities in the overhaul of the statute governing depots and arsenals.

On Depots and Arsenals:

Throughout the review of depot maintenance law, it was AFGE’s top priority for Congress to once again reaffirm that it is in the vital national interest for DoD to maintain a core depot maintenance workload, tied to the National Military Strategy, that must be conducted by government employees in government-owned and government-operated facilities. We are pleased that Congress has clarified this definition of core and required that the facilities, equipment, technical data and trained personnel be established within four years of initial operating capacity of a weapon system. This is further enhanced by changes to acquisition policy requiring sustainment decisions earlier in the Milestone process. Moreover, Congress expanded the definition of depot maintenance, upheld the key prohibition on A-76 contracting for core workload and reaffirmed the commitment that at least 50% of all depot maintenance be conducted in organic facilities. Importantly, Congress now will require DoD to submit annual reports identifying core requirements and plans for funding and allocating workload to meet core requirements.

Our nation’s arsenals are a national treasure that Congress recognized by extending authority for their designation as Centers of Industrial and Technical Excellence. We are pleased that the conferees ensured that only government-owned, government-operated facilities are eligible for this elite distinction, which conveys national recognition of unique capabilities and expertise. Depots have long had this authority and it is time that the arsenals, another key component of our industrial base, have joined their sister facilities in eligibility for this important designation.

On Sourcing and Workforce Management Issues:

AFGE is pleased that the conferees rejected an attempt to revive the flawed OMB Circular A-76 privatization process. AFGE opposes any repeal of the A-76 suspension until longstanding problems and inequities in the privatization process have been fixed; the DoD civilian workforce is no longer subject to arbitrary constraints, like the “Efficiency Initiative,” which caps the civilian workforce at FY10 levels, resulting in substantial reductions, while allowing spending on service contracts to continue to spiral out of control; DoD has insourced all privatized inherently governmental functions and reviewed for insourcing all closely associated with inherently governmental and critical functions; and DoD finally finishes compiling the inventory of service contracts and integrates the results into the budget process.

With respect to the “Efficiency Initiative,” AFGE supports the Total Force Management (TFM) provisions contributed by the House. Under TFM, DoD is supposed to better plan how to use its military, civilian, and contractor workforces, particularly by better accounting for the cost and size of the contractor workforce, and not applying arbitrary constraints on the cost and size of the military and civilian workforces.

AFGE strongly supports the inclusion of a Senate provision that would cap service contract spending at FY10 levels, which will reduce the incentive for DoD to use contractors instead of civilian employees. This provision also requires DoD to eliminate the positions of any contractors performing inherently governmental functions and reduce funding by 10% in FY12 and by another 10% in FY13 for contracts for the performance of closely associated with inherently governmental functions and staff augmentation contracts.

AFGE commends the conferees for defeating contractors’ attempts to kill insourcing, by discarding provisions that would have made it optional whether inherently governmental work had to be performed by contractors and based insourcing determinations for closely associated with inherently governmental, acquisition, and critical functions on cost, rather than the traditional legal and regulatory basis of risk. AFGE also is pleased that the definition of critical functions was expanded.

Now that contractors’ schemes to kill insourcing have been foiled and Congressional republicans and democrats alike have agreed on rules, let the insourcing—and the savings—begin. Given the results of the recent study by the Project on Government Oversight—that contractors usually cost almost twice as much as federal employees—DoD should bust the arbitrary caps on the civilian workforce so that there can be widespread insourcing for cost reasons. As DoD acknowledges, even its modest FY10 insourcing effort resulted in $900 million in savings.

Thanks to Senators Barbara Boxer (CA) and Charles Grassley (IA), a foundation has been laid for drastic reductions in taxpayer subsidies for contractor compensation. The cap has rightly been extended to cover all contractor employees, although it must ultimately be cut in half from its current level of $700,000—an already egregious amount which the Obama administration is poised to raise by tens of thousands of dollars. However, AFGE objects to the unnecessary and wasteful special exceptions in the conference report for certain occupational categories. The federal government already employs talented doctors, scientists, and other professionals who can perform better than hyper-expensive contractors, albeit at a fraction of the cost, suggesting that much of the latters’ work can be insourced.

AFGE looks forward to working with lawmakers in 2012 to impose a hard and much reduced compensation cap on all contractors in all agencies. In times of budget stringency, the federal government must end its ruinous over-reliance on contractors, particularly those in the nation’s top 1%.

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