Posted on 10/16/2002 4:42:51 AM PDT by SLB
The Army is launching an aggressive effort to privatize as many as 200,000 civilian and military jobs. A new review underway focuses on weapons arsenals, repair depots and ammunition plants as possible targets for privatization.
But while the move fits the Bush administration’s strategy to streamline government operations, the Army’s methods appear to run counter to those approved by the White House and Congress. As a result, the effort is likely to run into resistance from lawmakers fearful of losing jobs in their districts and White House officials who want to outsource work only through a competitive process.
Angela Styles, the Office of Management and Budget outsourcing and procurement chief, applauds the Army’s effort to try to make its operations more efficient. However, she said she has misgivings about portions of the Army proposal that call for shortcuts to competition.
"The president’s plan is to inject competition into the process, not outright privatization," Styles said. "We’ll take a look at each privatization on a case-by-case basis to see if they’ll be counted toward its competitive-sourcing goal."
The Army’s privatization effort could affect 154,910 civilian jobs — about 70 percent of all the Army’s civilian jobs — and 58,727 military positions, said James Wakefield, the Army official overseeing the project. All the targeted positions are considered "non-core" positions, meaning they serve in roles not considered essential to the Army’s mission.
The Army has more than 220,000 civilian employees and 480,000 military personnel.
In an Oct. 4 memorandum, Army Secretary Thomas White directed all commands to review their non-core positions and decide which ones could be outsourced or privatized. White said the unprecedented effort will free up financial and personnel resources for the global war on terrorism by shedding the Army of functions not central to military operations.
In the past, such outsourcing initiatives had been limited to logistics services at bases, such as maintenance and repair. But under the new initiative, other positions, such as paralegal and information technology jobs performed by both civilian and military personnel, could be outsourced.
In the memo, obtained by Federal Times, White said this will be the Army’s third effort since the 1980s to streamline itself through the use of public-private competitions. White has labeled this initiative the Third Wave.
Traditionally, such public-private competitions are conducted under complex rules spelled out in Office of Management and Budget Circular A-76. Under A-76 competitions, federal employee teams compete with contractors for work being done by federal employees. Whichever group can do the job at least cost wins the competition under those rules.
But White is expanding the scope of methods available to Army managers for deciding whether Army activities can be farmed out to the private sector.
"You will develop and present to me your implementation plans for privatizing, divesting, competing using A-76, outsourcing using alternatives to A-76, [and] converting military spaces to civilian or contract" positions, White wrote.
White called for transferring many jobs using alternatives to this process, including transferring some functions entirely to other agencies. White did not offer details of the functions or the agencies that would perform them for the Army.
White said the outsourcing effort differed from past initiatives because it would be faster and bigger and it will examine activities other than base operations.
In another memo obtained by Federal Times, White directs the Army Materiel Command to draft "action plans" for the potential sale or privatization of Army arsenals, ammunition plants and repair depots. The Army has five repair depots and seven arsenals and an unknown number of weapons plants.
Those actions plans, according to the Aug. 20 memo, which is unsigned, are due to White on Nov. 28.
An official at the Army Materiel Command who asked not to be identified confirmed that the command is working on these actions plans but stressed that no final decisions concerning those Army installations have been made. The actions plans apparently were ordered by White under the recommendation of a secret study conducted by the Rand Corp. of Santa Monica, Calif., which is a research organization that often advises the military.
The Army Materiel Command "will implement the RAND recommendations to the extent possible," the memo stated.
Rep. Solomon Ortiz, D-Texas, whose district is home to Corpus Christie Army Depot, said the Army’s effort is likely to run into resistance in Congress. Ortiz plans to ask that the House Armed Services Committee, of which he is a member, to hold a hearing on the Army’s plans.
Ortiz is "clearly unhappy with the prospects of such privatization" and is "anxious to take a look at the plan," said his aide, Cathy Travis.
In launching the Third Wave project, commands are directed to review their non-core positions. Commanders can request specific positions be exempt from the screening; they have until Oct. 29 to notify the Pentagon of such requests. The decisions on which jobs would be exempted will take place by Dec. 20 and the outsourcing program should be in full swing by March 2003, Wakefield said.
This announcement came one week after the Army took the day-to-day management of base contracts and support activities out of the hands of base commanders by creating two new agencies, the Installation Management Agency and the Army Contracting Agency.
Both actions are part of White’s transformation effort, which is intended to make the Army more efficient by adopting the business practices of corporations.
The war on terrorism also is spurring the action, said John Anderson, who manages manpower issues for the Army.
"We must transfer highly trained military personnel back in positions where their military competencies can be best used," Anderson said.
This could be easier said than done, because many of the alternatives to competitive sourcing will require legislation, which Wakefield said the Army would push. Options could include abandoning some activities altogether, allowing federal workers to create companies that would perform the functions they now do, or allowing cities and towns near Army bases to collect trash, fix streets and provide other base-support services.
OMB’s Styles also faulted public partnerships, so far considered for only a small handful of military bases, as "almost sole-source contracts."
The Army will begin the effort by using traditional competitive sourcing and direct privatization, Wakefield said.
The Army’s initiative is sure to face stiff opposition from federal workers’ labor unions."We expect support for ending the Pentagon’s privatization quotas to command even more bipartisan support," said Bobby Harnage, president of the American Federation of Government Employees.
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