Testimony by Bobby L. Harnage before the House Science Committee

Mr. Chairman and Members
of the Committee: My name is Bobby L. Harnage, and I am
the National President of the American Federation of Government
Employees, AFL-CIO (AFGE). On behalf of the more than
600,000 federal employees our union represents, I thank
you for the opportunity to testify here today on the Committee’s
draft proposals for sweeping civil service changes at
NASA.

My testimony will address not only the Committee’s
specific legislative proposals, but also AFGE’s assessment
of NASA’s most important workforce-related challenges
over the next ten years, our views of the most effective
strategies for recruitment and retention of federal
employees, and whether the Committee’s proposals would
further those goals, and finally, AFGE’s own recommendations,
and our opinion of the wisdom of seeking civil service
changes on an agency-by-agency basis rather than governmentwide.

Many of the proposals contemplated in this legislation
have been presented elsewhere as governmentwide changes
or earlier in the form of legislation prepared by NASA’s
political leadership, and have been rejected largely
on the grounds that they undermine merit system principles,
that they would exacerbate the federal government’s
"human capital" crisis, and that they would
create serious conflicts of interests between private
sector interests and the public good. In addition, they
fail to address the root causes of NASA’s (and the other
executive branch agencies’) workforce problems: inadequate
salaries, and mindless contracting out, privatization,
and downsizing.

For these reasons and others, AFGE opposes most of
the human resources proposals contained in this legislation.
Further, it must be noted that the Committee on Government
Reform has primary jurisdiction and expertise in matters
involving Title 5. With all due respect, these proposals
do not belong in the Committee on Science where the
jurisdiction and expertise is in areas other than federal
personnel. AFGE strongly opposes the implied policy
of seeking changes to civil service laws on an agency-by-agency
basis.

Like the rest of the federal government, NASA will
experience a wave of retirements over the next several
years, as workers with between 25 and 35 years of federal
experience reach retirement eligibility. Unfortunately,
the policies both NASA and other federal agencies have
been pursuing for the past decade will exacerbate the
problems and challenges the retirement wave presents.
Prior to the retirement wave, NASA has for more than
a decade pursued a vigorous and ill-conceived program
of downsizing and outsourcing. Instead of careful consideration
of whether NASA’s mission could be most effectively
and economically carried out by hiring in-house employees,
it has engaged in wholesale privatization ( NOT "competitive
sourcing"), and made reliance on contractors the
rule. Indeed, the President’s FY 2004 Budget includes
an evaluation of NASA’s compliance with the so-called
"competitive sourcing " initiative and notes
that NASA had met its entire privatization quota without
ever having held a single competition!

This has proven to be a costly mistake for NASA, both
in terms of taxpayer dollars and in terms of the agency’s
internal human resource infrastructure, not to mention
the victims of the recent shuttle disaster. Eliminating
federal positions and rushing to contract out as much
government work as possible, rather than building and
planning for a transition to the next generation of
NASA employees who are dedicated to career service with
the agency has made the coming retirement-wave challenges
truly daunting for NASA. Indeed, The New York Times
reported on March 6, 2003 that NASA’s inability and
disinclination to oversee its contractors is being examined
by the independent panel investigating the loss of Columbia,
i.e. excessive contracting out without regard to the
public interest has already been identified as a potential
contributing factor to the disaster.

In this context, the proposals the Committee is considering
seem rather paradoxical. The proposals would encourage
the elimination of even more federal positions through
Voluntary Separation Incentive Payments (VSIPs), and
thereby further undermine the agency’s ability to assemble
a new generation of career civil servants dedicated
to carrying out NASA’s mission in the most efficient
and reliable way for taxpayers. The proposals would
establish NASA as a place where people might take a
short turn through the revolving door between the agency
and its contractors, but not a place to build a career,
not a place that expects loyalty from its employees
or that will exhibit any in return.

Almost all the new authorities the Committee is contemplating
in its legislative proposals turn on the concept of
"critical need." The legislation proposes
to define critical need as "a specific and important
requirement of the Administration’s mission that the
Administration is unable to fulfill because the Administration
lacks the appropriate employees either because of the
inability to fill positions or because employees do
not possess the requisite skills." It is unfortunate
that virtually none of the proposals that follow would
help NASA with a long-term strategy of acquiring a regular,
reliable workforce with "requisite skills."

Even the Administrator implicitly acknowledges that
the agency finds itself in a helpless state, admitting
that "it doesn’t have a very deep bench,"
and is apparently entirely at the mercy of its contractors.
Yet his metaphor is telling; he needs to learn that
staffing a federal agency is not like staffing a football
or basketball team where short service on the bench
or elsewhere is all that is needed or expected. NASA
in particular needs a stable workforce able to hold
its massive and far-flung army of contractors honest
and accountable to the government’s own procurement
rules and cost accounting standards. It also needs an
adequate in-house technical, scientific, and engineering
workforce able to bring contracted work back into the
government and evaluate the quality of work that is
permitted to remain in the hands of contractors.

Unfortunately, the "workforce authorities"
the Committee has proposed for NASA can fairly be described
as constituting a "White Knight" or "Band-Aid"
strategy for rescuing the agency from its contracting
failures. The proposals only address the symptoms of
those failures, not their cause. To make matters worse,
all the proposed new authorities are aimed at temporary
solutions to be followed by subsequent temporary solutions.
The fact is that too much contracting out and privatization
caused NASA’s workforce deficits, and only a reversal
of contracting out and privatization will solve them.

The "workforce authorities" provided to NASA
in the Committee’s draft include authority to pay recruitment,
"redesignation," relocation, and retention
bonuses; authority to eliminate jobs through voluntary
separation incentive payments; authority to expand the
definition of temporary employment at NASA to as long
as six years; authority to fix basic rates of pay for
"critical" jobs; and authority to lengthen
intergovernmental personnel act assignments, and allows
increases the number of people covered by NASA demonstration
projects beyond 5,000. All but the last of these would
be triggered by a NASA-determined identification of
"critical needs."

The proposals for enhanced authority to offer recruitment,
relocation, "redesignation" and retention
bonuses of up to 100% of salary (50% for retention of
those who are "critical" and 25% for those
who are not) over four years are similar to those proposed
last year by NASA, and those being considered in the
context of government-wide civil service reform legislation.
AFGE is strongly in favor of Congressional willingness
to focus on the importance of improving pay as a means
of improving recruitment and retention of federal employees.

However, we believe that the approach to financial
incentives for recruitment and retention contained in
this legislation is at best incomplete, at worst, misplaced.
Federal salaries are too low not just for prospective
employees, or for employees the agencies expect to employ
only for a short period. Salaries are too low for all
employees. There are market-driven reasons why the federal
government should pay competitive salaries, and there
are values-driven reasons why the federal government
should pay competitive salaries. While market-driven
reasons such as recruitment and retention may on the
surface only appear to apply to prospective employees
and "flight risks," they in fact apply to
all employees.

AFGE does support the use of bonuses and other financial
incentives to reward federal employees. Yet they should
never be used as substitutes for a fully funded regular
pay system. The "human capital" crisis these
bonuses are ostensibly meant to alleviate is in part
a result of the repeated failure to implement and fund
the Federal Employees Pay Comparability Act (FEPCA),
passed in 1990. FEPCA already provides broad authority
for the payment of recruitment and retention bonuses.
According to a comprehensive study published by OPM
in 1999, less than one percent of eligible federal employees
had received bonuses under FEPCA’s authority. The main
reason for the failure to use existing authority cited
repeatedly by agency managers was an absence of funding.

It is also important to note that the legislative proposals
do not provide a separate, supplemental funding mechanism
for either the payment of bonuses, or the payment of
salaries equivalent to that paid to the Vice President
of the United States for ten lucky individuals. Implicitly,
the assumption is that the bonuses and super-salaries
would be financed from existing salary accounts. That
is, the agency would only be able to use the broadened
authority in the draft legislation if it paid for them
through the elimination of jobs or the denial of other
salary adjustments for those not selected for a bonus.
Again, that is not a good long-term strategy for rebuilding
in-house capacities.

It is foolish to pretend that, if enacted, these provisions
would improve NASA’s ability to recruit and/or retain
federal employees. Bonus payments do not count as basic
pay for purposes of retirement or other salary adjustments.
They are a poor substitute for the provision of competitive
salaries and regular salary increases that allow employees
to maintain decent living standards.

Before implementing a bonuses-for-some and super-sized
salaries for a few others, instead of an adequate-salaries-for-all
approach, NASA should ask itself the following: Should
employees who are loyal and have made a decision to
dedicate their careers to public service be penalized
financially relative to those whose only loyalty is
to their individual paycheck? Should the federal pay
system reward only those willing to extort a bonus from
an agency by continually threatening to leave in the
middle of an important project? Or should the federal
government pay adequate, competitive salaries to all
its employees?

The legislative proposals make the following scenario
possible: a recent graduate is hired "directly"
for a "temporary" position at a job fair,
effectively beating out three other candidates who had
applied for the position through normal competitive
procedures (among the three were a veteran with relevant
experience and the same degree from the same university,
a disabled veteran with 10 years of federal employment
and a similar degree, and a recent graduate from another
university with the same type of degree but a higher
GPA who mistakenly thought the best route to federal
employment was to follow procedures and fill out a Standard
Application Form 171). To encourage the direct hire
person to accept the position, he is promised bonuses
worth 25% of salary each year for four years (indeed,
he must also accept a service agreement wherein he agrees
to work for NASA for a period "not to exceed four
years"). During that four-year period, the agency
would repay the employee’s student loans. At the end
of the four-year service agreement, the employee threatens
to leave in the middle of a project. NASA wants to keep
him on for at least two more years. A retention bonus
of 50% of salary, for two years, is authorized because
a "critical need" is identified. One year
later, he is converted to permanent status. At the end
of this period, a new Administration/political appointee
at NASA decides it would rather do without him, and
offers him a Voluntary Separation Incentive Payment
(VSIP), determined not on the basis of the regular severance
formula in title 5, but rather equal to 50% of his salary,
since the Administrator has determined that to eliminate
this position is critical to his restructuring efforts.
Over six years, the lucky employee has received more
than eight and a half years of salary. And the expertise
and experience he has built up over that period is lost
to the agency. But the authorities remain, so NASA can
go through this song and dance all over again.

That’s quite a windfall for the hypothetical employee,
quite an expensive experiment for taxpayers, and quite
an insult to the thousands of rank and file federal
employees who are taken for granted and denied competitive
salaries, benefits, or any form of job security. The
question is: Is it a reasonable response to the "human
capital" crisis? Will it allow the government to
replace the more than 50% of federal employees who will
be eligible to retire within the next 5 years with a
new generation of employees who exhibit the same level
of skill, dedication, and reliability as our nation
has relied upon in the past? What chance is there that
employees in the existing workforce who have as good
or better skills than those hired under the authorities
being contemplated will share in the kind of "critical
need" bounty to be lavished on temporary workers?

Federal agencies, particularly science-dominated agencies
like NASA are not fly-by-night operations or flashes-in-the
pan. They are not here today and gone tomorrow, nor
do they produce technological fads with only passing
relevance or utility. As such, no federal agency, including
NASA, should have a human resources plan that explicitly
encourages constant turnover and puts no value on continuity,
dedication, or career development for the incumbent
workforce. Yet that is exactly the direction this draft
legislation would take the agency.

We urge NASA and other executive branch agencies to
stop looking for short-term fixes. NASA’s need for a
high quality workforce and comprehensive in- house capacity
are neither temporary nor short-term, and the government
as well as the employees deserve to have the security
and continuity that a workforce with regular civil service
appointments conveys. With regular permanent appointments,
the government obtains the expertise it needs, as well
as the authority to supervise, manage, and control the
substance and direction of that work. Taxpayers’ interests
are best served by knowing that federal employees, sworn
to uphold the public good and work in the public interest,
perform government work.

The idea of treating ongoing government programs as
temporary, even when the particular work project is
estimated to last for less than six years, is wrong.
It is just an extreme case of "managerial flexibility"
that is contrary to the agency and the public interest.
Just in order to be able to get rid of a worker without
notice, or any due process, the agency seems willing
to be staffed by a group of contingent workers to whom
absolutely no loyalty, commitment, training, or career
development is offered. If NASA expects to be around
longer than six years, why does it want to treat its
work and its workers, even those who work for the agency
up to six years, as temporary?

The authority to offer Voluntary Separation Incentive
Payments (VSIP) described in the legislation fails to
address an important question. In earlier drafts, the
VSIP proposals for NASA required a one-to-one elimination
of full-time-equivalent positions as the only means
of using them. We believe that using VSIPs only for
position elimination is ridiculous. At a minimum, there
should be no connection between efforts to restructure
and delayer and authorized agency FTE levels. At a time
when NASA and other federal agencies are asking for
expanded authority to pay bonuses and repay student
loans in their efforts to hire more federal workers,
why should they simultaneously be required to eliminate
FTE’s and pay employees to leave federal service? Couldn’t
the money be better spent on retraining? On improving
salaries? On improving the Federal Employees Health
Benefits Program (FEHBP) which this year pays only 70
percent of the premium of the plan that covers over
half of all enrollees?

I have saved the worst, and most damaging proposal
for last. The Committee’s draft would eliminate the
5,000 person limit on the number of employees covered
by a demonstration project and allow NASA’s Administrator
to decide what number of employees to be included. If
enacted, this provision would allow NASA to put every
single one of its employees under a demonstration project
of management’s unilateral design. Only those covered
by a collective bargaining agreement would have the
opportunity to vote to decide whether to give up their
rights under Title 5 and join the project.

Granting this authority to the NASA administrator would
be highly destructive of civil service standards, and
in fact destroys the entire notion of a demonstration
project as an experiment or pilot plan. If no substantial
number of NASA employees remain in the regular Title
5 system as a baseline or constant, then against what
standard is the demonstration project being tested?
That is the reason Congress required numerical limits
on those covered by a particular demonstration project
in the first place. I fear the removal of limits on
the number of people covered by a NASA demo may just
be an easy to impose on NASA a new personnel system
that would not otherwise pass muster if it were proposed
as a legislative change to Title 5. AFGE strongly opposes
this section of the legislative proposal, and urges
the Committee to reject it.

Finally, the legislation would require annual reporting
to Congress on the exercise of the workforce authorities
it establishes, and prior notification of all the details
of any "Workforce Plan" NASA might concoct
for the exercise of the authorities in the bill. Later,
NASA would have to come back to Congress for any reauthorization
or enactment of legislation to make the authorities
permanent. While this approach is far superior to other
approaches that usurp the role of Congress altogether
with respect to large scale and permanent changes to
Title 5, it is still a unilateralist approach that is
inappropriate for a unionized agency. Why is there no
allowance for federal employees to have their views
of any proposed "Workforce Plan" heard through
the process of collective bargaining? Why exclude the
wisdom, expertise, and experience of the front-line
in-house NASA workforce from the formulation of proposals
to improve recruitment and retention of the next generation
of NASA scientists and engineers? NASA’s management
has certainly shown itself capable of grave miscalculation,
and extremely poor judgement. AFGE urges the Committee
to require collective bargaining over the terms of any
recommended "Workforce Plan" that will affect
bargaining unit positions.

This concludes my testimony. I will be happy to answer
any questions Members of the Committee may have.