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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.


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