Government Executive - Authors - Susannah Zak Figura

Travel Advisory

Susannah Zak Figura — Sun, 15 Apr 2001 00:00:00 -0400

Management improvements at the Bureau of Consular Affairs rest on a shaky funding base.

he State Department's Bureau of Consular Affairs operates in the unenviable world of no-win situations. If the agency does its job well, almost no one notices. But a single mistake can bring heavy scrutiny. Take the case of Charles Parish, who was chief of the non-immigrant visa section at the U.S. Embassy in Beijing from July 1994 to May 1996. Parish was accused of fraud for allegedly accepting cash in exchange for visas. He denied the charge and, after a joint investigation by the FBI and the State Department failed to find criminal wrongdoing, no disciplinary action was taken. Still, the episode triggered congressional hearings and extensive media coverage.

While the spotlight was shining on Parish, consular employees at more than 200 posts around the globe were doing their jobs without incident. They were reviewing the more than 9 million visa applications the State Department receives each year. They were helping American citizens replace stolen passports and inquiring about the whereabouts of abducted children taken abroad. They were arranging for the return home of Americans who died overseas and responding to disasters such as airline crashes and civil unrest. Stateside, bureau staffers were issuing passports, posting travel warnings and providing information on visas, passports and other travel matters.

Consular Affairs, one of several State Department functional bureaus, is charged with overseeing the issuance of passports and visas, and for providing services to American citizens overseas. About 1,000 civil servants staff the bureau's Washington headquarters and passport and visa processing centers across the country. About 900 Foreign Service officers carry out consular duties overseas, where approximately 2,500 foreign employees assist them. This relatively small workforce has had to meet an ever-growing demand for services. The economic growth of the last decade has spurred unprecedented levels of tourism. The more people who travel, the more passports, visas and travel advisories must be issued. In addition, increased attention from Congress to terrorist threats has led to tighter border security procedures that in many cases have further burdened already overworked visa officers.

Despite these challenges, Consular Affairs has developed a reputation for effective management within the State Department, thanks to strong leadership and an influx of funds brought by a 1994 law allowing the bureau to keep some of the fees it collects. The head of the agency, Mary Ryan, is among the most respected career Foreign Service officers at State. In 1998, she was awarded the coveted status of career ambassador, the highest rank in the Foreign Service.

Ryan has steered the bureau on a course of best practice reforms that have improved services globally. As a result, congressional staffers, union officials, consular officers and other observers say Consular Affairs has become a symbol of innovation within a huge State Department bureaucracy traditionally known more for its policy thinkers than its managers. Though Ryan is a Clinton administration political appointee, she remained in place during the early weeks of the Bush administration and was not expected to be replaced, according to a State Department spokeswoman. Regardless of who ultimately leads the agency, the consensus appears to be that it should continue on the path blazed by Ryan.

But Consular Affairs faces significant obstacles to further management improvement, and some observers question whether the agency can even sustain its current achievements once Ryan eventually leaves office. Bureau officials admit that they do not chart and track goals and objectives tied to a comprehensive strategic plan. Therefore, they don't have a solid sense of what their future management challenges may be and how they will attack them. Many even worry that because Congress has capped the amount of revenue the agency may keep from fees, the bureau's already tight budget soon may be seriously inadequate. Without a strategic planning process in place to document what's being achieved -and what's going undone-the bureau will face an uphill battle trying to convince Congress that it needs more money. Given these realities, and the fact that the Federal Performance Project's management criteria put a premium on managing for results, Consular Affairs could earn no better than a C when compared with other agencies more successfully using strategic planning not only to manage current operations but also to map out plans for the future.

The Big Picture

To fully understand the challenges facing the management team at the Bureau of Consular Affairs, first consider the broader situation of the State Department as a whole. State long has been plagued with funding, management and morale problems. In recent years, foreign affairs experts have documented these shortcomings in report after report. "No government bureaucracy is in greater need of reform than the Department of State," concluded a task force of the Council on Foreign Relations and the Center for Strategic and International Studies, led by former Defense Secretary Frank Carlucci. The task force issued a 12,000-page report documenting State Department woes to incoming Secretary of State Colin Powell in January. The U.S. Commission on National Security, headed by former Senators Gary Hart, D-Colo., and Warren Rudman, R-N.H., told Powell in February that the department is "demoralized and dysfunctional."

The Overseas Presence Advisory Panel reported in November 1999 that "insecure and often decrepit facilities, obsolete information technology, outmoded administrative and human resources practices, poor allocation of resources, and competition from the private sector for talented staff threaten to cripple our nation's overseas capability, with far-reaching consequences for national security and prosperity."

Earlier in 1999, a study by McKinsey and Co. uncovered significant employee frustration with poor management practices. "You've joined the supposedly elite Foreign Service, and you have terrible managers-people who've been promoted to get them out of other people's hair," one officer told McKinsey. Employees also complained about the performance appraisal system. "Our system is a real equalizer," one person wrote. "There's just not that much difference between what happens to a high performer and what happens to a low performer."

Compounding these problems in consular sections at many overseas missions are excessive workloads. For example, because staffing levels are often inadequate, individual visa officers at high-volume posts must interview as many as 200 job applicants a day. They also face pressures unparalleled in other State job categories because by law, consular officers are judge, jury and appeals court to visa applicants. Their split-second decisions stand as the official, and final, U.S. government decision in a case. "The pressure overseas on consular officers is just terrible," says Marshall Adair, president of the American Foreign Service Association, a union representing Foreign Service officers.

Further complicating the matter is the fact that the bureau does not directly control funding or staffing of consular work around the world. Rather, the State Department's geographic bureaus do. As a result, staffing decisions are not always made by the people with the most expertise in consular affairs. In years past, the bureau has asked for full authority over staffing, a proposal endorsed by the Overseas Presence Advisory Panel report. But the department has resisted, insisting that the geographic bureaus are in better positions to oversee all functions at diplomatic missions abroad. That Ryan has been able to make any headway given these broader problems is remarkable. The extra revenue the bureau received has been a major factor in her success. Also helpful have been the length of Ryan's tenure-she's been in office since 1993-and the fact that she is a career Foreign Service officer well-versed in the nuances of the State Department bureaucracy.

Additionally, Ryan has sharp management skills, observers agree. Clearly, her efforts have helped the bureau do its job better. She has boosted morale and raised the prestige of consular work, which traditionally has been overshadowed by the more popular political and economic reporting career tracks. As the head of non-immigrant visas at a high-volume embassy says, "Mary Ryan is the best thing that has happened to the Department of State in my 18 years of service. She cares about each of us but also cares about our customers. She is constantly cajoling us to improve but also lauding our successes."

Money Matters

It often takes a tragedy to make Congress pay attention to underfunded government programs. In the case of Consular Affairs, it was the 1993 bombing of the World Trade Center in New York, which killed six people.

Muslim cleric Sheik Omar Abdel Rahman, who later was convicted of masterminding the terrorist attack, had been granted a visa at the U.S. embassy in Sudan, despite having been on an official list of foreigners ineligible for entry. The episode brought to light significant security problems in the bureau's visa processing system. Checking applicant names against the list of ineligible people required using an antiquated microfiche system, a labor-intensive step that was relatively easy to skip since no record was made when a name was checked. In the Rahman case, the Sudanese clerk responsible for checking the name against the list apparently didn't do so, though he signed off declaring that he had. The consular officer adjudicating the application then approved the visa.

During hearings, Congress learned that without more money for computer, training and staffing upgrades, similar mistakes were certain to be made again. The bureau, to its credit, had been installing machine readable visa (MRV) systems overseas in an effort to cut down on fraud-it's harder to counterfeit a computer-generated MRV that is printed directly into an applicant's passport than it was a traditional paper visa that was stapled into a passport. But because of resource constraints, the bureau was only able to install systems at about six posts a year. With more than 200 posts issuing visas, the agency could not have expanded the effort worldwide without extra revenue, says Frank Moss, the bureau's executive director.

So Congress granted State the authority to charge and keep fees for the new machine readable visas that then could be reinvested to pay for such things as installing and operating MRV systems, automating the name-check process, improving passport quality and security, conducting fraud investigations and putting in place the computer infrastructure to support and operate the programs. In the past, all fees collected for consular work-which in fiscal 1999 amounted to nearly $1 billion-were deposited in the Treasury. Now, Consular Affairs keeps about $220 million of those fees. In fiscal 2001, the agency will receive an additional $18 million in appropriated funds.

Spending Spree

Meeting the deadline set by Congress, the bureau had installed MRV and automated name-check systems at every post within two years. They now have computer access to a massive database housed in Beltsville, Md., that can be checked in a matter of minutes. In fact, a machine readable visa cannot even be generated until the database has been checked, making it more difficult for someone like Rahman to enter the country.

These systems introduced a new era of information technology in consular work. "The MRV money has allowed us to buy a whole new generation of computer equipment," says John Caulfield, consul general in Manila.

MRV money has had a significant impact on passport operations, enabling State in 1998 to unveil an anti-fraud digitized passport. A security film with a hologram-like image protects the digital photo and personal data. Tiny wavy lines printed behind the photograph also make counterfeiting more difficult. These passports are now issued by the National Passport Center, a processing center in Portsmouth, N.H., and the New Orleans Passport Agency, which together process about half of all U.S. passports. Eventually, all passport agencies will issue the digitized version.

MRV revenue is funding a major effort to issue a more secure border-crossing card to Mexican citizens who enter the United States frequently to visit relatives and to work. In 1996, Congress passed a law requiring State and the Immigration and Naturalization Service to implement the Border Biometric Program, which will incorporate a biometric identifier such as a fingerprint or handprint into new border crossing identification cards.

Unpredictable Workload

The extra funding has made it easier for Consular Affairs to respond to staffing emergencies triggered by unexpected surges in service demand, especially for visa work. Though consular officials try to plan staffing needs two years in advance, in reality, "it's hard for us to predict visa demand six months out," Moss says. The economic situation of a nation plays a large role in determining visa demand, but a single unexpected event can throw a projection out the window. In Islamabad, Pakistan, for example, demand for non-immigrant visas more than doubled from 1999 to 2000. Bureau officials suspect the increase was caused by a baseless rumor that State was moving visa operations out of the country to a regional center, as has been done in some parts of the world.

Slightly more predictably, though just as troublesome, consular shops often are shorthanded during the summer, when demand for overseas consular services usually is at its highest and State's reassignment process unfolds. Precisely at the time more consular officers are needed, fewer are available, as officers whose multi-year tours have ended pack up and move to their next duty station. At the same time, new arrivals are hit with excessive workloads before they are even familiar with their new posts. The reassignment scheduling is unlikely to change, for State plans it around the academic school year to make major moves less disruptive to families.

Though the bureau doesn't have the authority to reassign people from country to country as needed, the agency has come up with short-term solutions to staffing deficiencies. For example, posts can request extra money to hire family members of Foreign Service officers to serve as consular associates. These associates, once trained, can adjudicate visa applications just as a consular officer can. In other cases, Consular Affairs might send civil service staffers to a post on a short-term assignment or send a foreign language fellow to help pick up extra work.

Best Practices

At the same time the agency was busy putting MRV money to work, Ryan's team was promoting the concept of best practices to help improve efficiency and customer service. By bringing people from individual posts together to share innovative ideas and by studying private industry practices, the agency created momentum for improving management. The best practices coordinator, John Arndt, collects ideas from the field and shares them with other posts. "These are ideas," Arndt says. "Consider them. If one doesn't work now, reconsider it later." As following best practices becomes more ingrained in day-to-day management, Arndt says, consular staffers are increasingly receptive to trying new ideas.

One of the most noticeable changes has involved appointment systems. Embassies with busy consular sections often had thousands of people line up outside awaiting an interview with a visa officer. In Mexico City, the line started forming at 5 o'clock-the afternoon before. These lines "started a cottage industry," Moss says. The captive audience supported everyone from taco vendors to people selling fraudulent visa documents, he says. Manila faced similar crowds. "We had people lining up 48 hours in advance," Caulfield says. "It was depressing for the consular officers. And it was embarrassing for the U.S. government."

But with appointment systems in place at both posts, embassy staffers no longer have to navigate throngs of visa applicants as they make their way to work each day. Nor must visa officers face a seemingly endless line of people who must be interviewed before the work day is out. Now, applicants make interview appointments by mail, phone or fax, depending on the post, allowing consular officers to know exactly how many cases they must adjudicate on a given day. With the appointment system, "we were able to take control of our workload," Caulfield says.

These systems also have made the passport application process more convenient. Any American who has had a passport for more than 10 years can remember the days of waiting in long lines for a renewal. But now, appointment systems have eliminated those lines at the largest passport agencies. As of December, appointment systems were in place in New York; Miami; Los Angeles; Washington; Stamford, Conn.; Chicago; Houston; and San Francisco. At other sites, customers now receive a number upon entering and can wait in a lounge and watch electronic updates on the estimated waiting time. Appointment systems, as well as some other best practices, have been implemented at no cost to the government. The appointment system in Manila, for example, is paid for entirely by telephone fees applicants incur when they call a 900 number to make their appointment. The calls, which are fielded by a contractor, cost about $5, significantly less than the $100 many people used to pay others to wait in the visa line for them, Caulfield says. It makes sense that foreign applicants, not U.S. taxpayers, are paying for the service, he adds. Also by incorporating third parties into work processes, other best practices are saving visa staff time. At many posts, applicants are encouraged to apply for visas through their travel agents and to pay fees at banks or other authorized financial institutions, leaving consular officers to focus on adjudication. And rather than have applicants return to the embassy or consulate in person to pick up their visas, thereby adding to the congestion, visas now are sent by courier, at the applicant's expense.

The Bureau's American Citizen Services sections, which handle such matters as visiting Americans in prison abroad, and notifying next of kin and helping make burial arrangements for people who die overseas, generally have won high marks for service. In fact, the most recent review of these activities by the State Department inspector general found that overall, consular officers and the local hires who help them go "above and beyond the [Foreign Affairs Manual] requirements to provide assistance to Americans in need." Viewing these tasks through the lens of best practices has allowed Consular Affairs to further improve customer service. For example, in the past, Americans traveling abroad had to go to an embassy or consulate in person to register their arrival, so that they or their families could be contacted in the event of an emergency. Now, they can register with some embassies online.

An effort to simplify passport application for new citizens has linked the bureau with the INS-which has authority over foreign visitors and immigrants as soon as they reach the United States-and community groups. In cities where the effort is in effect, prospective citizens receive their passport applications at their last INS interview prior to being naturalized. This saves them a trip to the passport agency.

A Money Issue

No doubt, best practices have improved consular operations. But it's the machine readable visa money that has made many of the staffing and technical innovations possible. In fact, most bureau operations now depend on this funding stream. As a 1998 State Department inspector general's review (98-FM-018) of MRV fees found, so much of the bureau's activity has come to rely on MRV money that unless the fee-collection authority is made permanent, the agency could face serious funding shortages in the future.

This dependence worries some observers because each year Congress has the power to revoke the authority and redirect the money, casting a shadow of doubt during every appropriations cycle as to whether Consular Affairs will get the funds it needs. The Overseas Presence Advisory Panel's report urged Congress to make the authority permanent. "The panel is convinced that resources available to the department for consular activities fall seriously short of what is needed," the report said. Panel members recommended abolishing the current cap of $316 million on the amount of MRV fees Consular Affairs may keep. Though the agency never yet has collected that much, if it does reach that level, the bureau will have to send the extra money to the Treasury unless Congress explicitly says otherwise. In other words, even though the demand for MRV services may keep rising, Consular Affairs may not be able to get the needed funds to meet that demand. But without the cap, the advisory panel wrote, "This funding would be directly tied to the increasing levels of consular activities, one that adjusts as workload fluctuates."

Several years ago, Consular Affairs asked for permanent authority to keep MRV fees; Congress did not grant it. Reauthorizing the authority is one of the main ways Congress oversees Consular Affairs programs, and legislators do not want to give it up, says a congressional staffer. The bureau did not formally request permanent authority during the last appropriations cycle.

While bureau and State Department officials battle with Congress for more money and cases of visa fraud get dissected by the media, consular officers around the world continue to keep the consular gears of the U.S. government turning. A lot of them wouldn't have it any other way. "Consular work is often seen as unattractive and mind-numbing to those doing other work, and honestly, it is not fun to spend eight hours a day at the [visa] window refusing 60 percent of the applicants who come for a visa," admits one seasoned consular officer. "However . . . there are no jobs in the Foreign Service that impact on more lives every day," he adds.

"When we help a destitute [person] get home, improve conditions for a long-term American prisoner, help a family who has just lost a loved one, finally issue a visa to someone who has had a difficult and drawn-out case, or even stop someone who threatens the safety or security of our country from getting a visa, we know that our day has been well spent in service to our country. To do this in a foreign environment, perhaps in a foreign language, is an opportunity of a lifetime that we have every day. I can't say that every day is wonderful, but I can say that while consular work is not for everyone, many of us who do it wouldn't do anything else."

Susannah Zak Figura is a Washington-based freelance writer.

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Fighting for Talent

Susannah Zak Figura — Sun, 15 Apr 2001 00:00:00 -0400

Poorly planned downsizing and the coming wave of baby boomer retirements have agencies battling to attract, train and keep sufficient staff to accomplish their missions.

t was bound to happen. Federal agencies could only downsize so much, take on so many new responsibilities, slow recruiting to a virtual standstill and pare training resources to the bone before the civil service would experience what many consider a crisis. The situation is so dire, General Accounting Office officials say, that, in January, they added human capital to their list of high-risk management issues facing government (GAO-01-263). The government has "acted as if people were costs to be cut rather than assets to be valued," the report says. "Human capital shortfalls are eroding the ability of many agencies-and threatening the ability of others-to effectively, efficiently and economically perform their missions."

These problems took root in the early years of the Clinton administration, when downsizing ordered by government reinvention plans occurred haphazardly, without consideration of whether remaining staff would have the needed expertise. Agencies saw some of their best talent, especially in the technical fields, accept buyouts and flock to higher-paying private sector jobs. Eight years later, with baby boomers on the cusp of retirement age, many agencies fear they will lose so much institutional knowledge as these older workers leave that government's ability to do its job will be seriously hampered. Indeed, by 2004, nearly one-third of the federal workforce will be eligible to retire and another 21 percent will be eligible for early retirement. Though not all of them will retire at the same time, that's more than 900,000 people that could leave the workforce.

Fearing the impact of such an exodus, a handful of highly placed policy-makers have focused their attention on the problem in the last couple of years, helping to make "human capital" the new buzzword in public administration circles. Experts have realized that the results-oriented management so feverishly pushed on agencies during the 1990s cannot be fully achieved without good human resources management-that is, without workforce planning and considerable investment in recruiting, training and retention, so that agencies have the right skills on board.

GAO chief David Walker, for example, has made improving federal human capital management one of his priorities. He has spent much of his more than two years in office giving speeches, congressional testimony and media interviews on the subject. In addition, GAO has published guidance to help agencies learn how to strategically manage their workforces. On Capitol Hill, Sen. George Voinovich, R-Ohio, chairman of the Senate Governmental Affairs Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia, has held several hearings on federal human capital matters. He, too, considers human capital management one of the most pressing issues facing government. "This whole area [of management] has been ignored," he says. "We do have a human capital crisis. There's no question about it." Substantial change is critical "if we are to achieve real and lasting improvements in government operations," he says.

Even the Clinton administration addressed the issue during its waning months. In June, Clinton issued a memorandum to agency leaders instructing them to "recognize and reinforce the critical role human resources management plays in achieving each agency's mission and strategic goals." The memo further directed agencies to integrate human capital matters into their planning, budgeting and mission evaluation efforts, and, beginning in October 2000, agencies were to include HR management objectives in their annual performance plans. Most important, growing evidence shows that top managers at individual agencies-including at some of this year's Federal Performance Report agencies-are hearing the call and integrating human capital management into strategic planning.

How things proceed depends on whether the Bush administration continues the push for human capital changes. Federal human resources issues are not politically sexy topics, and during his campaign, Bush seemed more concerned with further reducing the number of federal employees than with how best to manage government workers. But the high-profile push for better human capital management may already be on an irreversible course that may lead to long-needed and ultimately positive changes.

In the Spotlight

Both Voinovich and Walker-the most visible and potentially influential people on the human capital crusade-admit they have a big job ahead of them. Still, they are determined, for both come to the task after having seen effective HR practices transform public and private sector organizations. Walker saw dramatic paybacks at various organizations as head of the human capital services practice at Arthur Andersen LLP from 1989 until he joined GAO in 1998. He even co-wrote a book on the subject called Delivering on the Promise: How to Attract and Retain Human Capital (Simon and Schuster, 1998). Voinovich became a believer as mayor of Cleveland from 1979 to 1989 and later, as governor of Ohio from 1991 to 1998. Soon after taking his city and state positions, Voinovich realized that in terms of pay, benefits and training, public employees had been taken for granted for years. The result was general apathy within the workforce that hampered public services. Voinovich worked with labor unions to revamp classification systems and empower staff, boosting morale along the way. One notable change: Ohio workers are entitled to up to $2,600 a year for training and education. Unions helped pay for the benefit by accepting lower pay raises.

Lobbying Washington in one way or another for 18 years before he joined the Senate, Voinovich had long seen similar problems at the federal level. "I've never seen an organization as screwed up as the federal government," he says. "The civil service has been ignored" so that today, the personnel system is outdated and overly rigid, he says. For example, the generally slow hiring process puts government at a disadvantage when competing for top talent, he notes, recalling testimony from NASA Inspector General Roberta Gross in May 2000. "It is my experience that it just takes too long to hire staff," she said. "We have lost leading candidates . . . to private sector competitors because companies can hire top-performing candidates faster than we can." It takes an average of four to six months to hire someone in her agency, Gross said. Voinovich has held six hearings over the last two years highlighting the problems caused by such an inflexible system, as well as by inadequate workforce planning and not enough training. Because agencies essentially did no planning when they made staffing cuts to meet Clinton administration downsizing targets, in some cases they now face debilitating gaps in skills. "Some agencies have hollowed out their core capabilities," Voinovich notes. "They have a skills imbalance."

As GAO notes in its high-risk report, the skills needed for monitoring and evaluating work done by contractors are among those that agencies most severely lack. The Energy Department, the Housing and Urban Development Department and the Health Care Financing Administration, among others, "have experienced costly performance problems" because they lacked sufficient in-house expertise to oversee financial and other elements of contract work.

Agencies give so little priority to training that they do not even have a line item in their budgets dedicated to it, Voinovich notes. He concedes that in most cases agencies have tried to hide their training money in operations budgets for fear of Congress further slashing what has traditionally been an easy budget-cutting target. "There's no question that Congress is responsible [for skill shortages that have resulted from insufficient training] to a large degree," he says. But Voinovich insists that agencies have a responsibility not only to make training a priority, but to make a business case to appropriators about why training is important.

Drawing from evidence presented by civil service experts at his hearings, Voinovich released in December his "Report to the President: The Crisis in Human Capital," which he hopes the new administration-and Congress-will use as a blueprint for reform. Among the recommendations that don't require legislation are those urging agencies to conduct workforce planning and automate hiring systems to speed up the process. Those requiring legislative action include one to make the pay system more flexible by allowing broadbanding, as agencies such as the Forest Service, GAO and the Federal Aviation Administration have done under special waivers from the rigid General Schedule pay structure. Broad-banding typically establishes four or five pay ranges and gives managers more power in setting salaries within those ranges.

New Tools

Casting light on the issue is one thing, but getting agencies to actually integrate human capital into broader management efforts is another matter. This is new terrain for most human resources staffers. But GAO and the Office of Personnel Management have developed a number of documents and computer tools to help agencies. GAO's "Human Capital: A Self-Assessment Checklist for Agency Leaders," published in September 1999, encourages agency managers to study their workforce needs and determine whether they have the requisite skills on board. If not, they are to devise a plan to get them by recruiting, retraining or shifting resources. The checklist provides pertinent questions that should be answered in making these decisions. They relate to such things as aligning human capital strategies with core business practices; recruiting, hiring and developing staff; and motivating performance while maintaining accountability and fairness. Early last year, GAO released another report designed to help agencies learn from top-performing private companies known for their effective human capital practices. "Human Capital: Key Principles from Nine Private Sector Organizations" (GGD-00-28), which highlights strategies that can transfer to the federal sector, studied such companies as Sears, Roebuck and Co.; Southwest Airlines Co.; Federal Express Corp.; and IBM Corp. Each one has recognized that while good human capital management alone can't guarantee high performance, it is an essential element to meeting organizational goals and objectives. GAO identified common themes of the programs, including:

Treat human capital management as fundamental to strategic business management.
Integrate human resources staff into management teams.
Identify leadership characteristics essential for achieving mission, and hire, develop and sustain leaders accordingly.
Create line of sight between individual work and agency's overall results.
Identify key competencies-knowledge, skills, abilities and behaviors-and hire, train and retain accordingly.
Hold employees accountable for achieving results, and use financial and other incentives to reward good performance.
Encourage a team culture where individuals learn from each other and, together, achieve high performance.
Evaluate human capital practices and make changes based on results.

For its part, the Office of Personnel Management has spent the last couple of years developing a workforce planning model for all agencies. Why didn't OPM provide such assistance years ago to help avoid the current problems? OPM had proposals on the table five years ago to put the necessary data sources together to make a model possible, says an OPM official.

"But people were so caught up in the [downsizing] situation at the time and it didn't get the kind of focus it should have had," he says. In the closing months of the Clinton administration, the workforce planning model became an OPM priority. One of the most useful elements available so far is an online tool, called FedScope (www.Fedscope.opm.gov.), which gives agencies access to the Central Personnel Data File. This file includes data on the age, gender and education level of federal employees-information that can help agencies as they analyze workforce trends in an effort to predict future needs. OPM also dedicated a section of its Web site (www.opm.gov/workforceplanning) to sharing best practices.

OPM expects the trend toward better workforce planning will continue under the Bush administration. With the 1993 Government Performance and Results Act on the books, agencies have to have workforces that can meet their goals and mission needs, says the OPM official. "This isn't a Democratic or a Republican issue. This is about giving good government service."

On the Front Lines

On its face, workforce planning-and related elements such as seeing that employees get necessary training-seems remarkably simple. "So much of it is just common sense," says Rosslyn Kleeman, distinguished executive-in-residence at George Washington University and former director of workforce issues at GAO. "What do I need in the future and what have I got, and what do I have to do to get to where I want to be in the future?" Still, agencies have never had to think this way, she says. Indeed, because many agency personnel shops have been so focused on procedural regulations related to hiring, firing and benefits, they don't have strategic thinkers on board. In addition, downsizing has left many HR shops with bare bones staffs.

"There's no question that some agencies don't have either the people or the resources to do what needs to be done," GAO chief Walker says. Agencies in that situation need to contract out to get the necessary expertise or concentrate on hiring people who have the necessary skills, he says. If that means diverting money from another source, he adds, then so be it. Practically all agencies now are addressing workforce planning, says the OPM official. Among the agencies giving the matter serious attention is NASA, one of the agencies included in this year's Federal Performance Report. NASA lost 25 percent of its workforce during the downsizing years and, because no planning was involved in deciding what skills could or should be let go, the agency has since found itself largely ill-equipped for some of its high-tech work. Among the unfortunate results were two failed contractor-run missions to Mars in 1999-one for a weather satellite and one for a polar lander-that were blamed in part on NASA's lack of expertise needed to properly oversee the work being done. The experience made agency officials realize that "we need to have skills in the right areas," says Brian Keegan, NASA's chief engineer.

Why didn't NASA foresee that such problems could result from job cuts? "It's probably human inclination to focus on the near term and maybe in the process pay insufficient attention to the long term," Keegan says. NASA now understands that the best way to solve near-term problems is to meet long-term skill needs, Keegan says. But he admits that, although NASA's top management has endorsed this "strategic capability planning," the agency still faces a challenge in bringing all senior managers on board. "Planning for the planning becomes an important aspect" of ensuring success.

The Forest Service has trouble ensuring that people with the right skills are on staff to fulfill the agency's many missions, including harvesting timber, fighting forest fires, forest planning, law enforcement, recreation and wildlife and fisheries management. The agency struggles in particular to keep enough firefighters, but officials are trying to anticipate and meet needs. Each year, they develop a workforce plan that identifies needed skills during the upcoming year as well as during the next five years.

Elsewhere, planning can seem fruitless because of challenges beyond agency control. At the Bureau of Consular Affairs, officials try to plan staffing needs for overseas operations two years out, but actually, "it's hard for us to predict visa demand six months out," says Frank Moss, the agency's executive director. In Islamabad, Pakistan, for example, demand for non-immigrant visas more than doubled from 1999 to 2000 because of a baseless rumor that the State Department was moving its visa operations out of Pakistan to a regional center. In addition, the agency does not directly control funding or staffing of consular work around the world.

The Road Ahead

Whether agencies continue improving personnel management long enough for their efforts to make a difference depends on both the Bush administration and Congress. Observers say the Office of Management and Budget, for example, must treat human capital as a priority management issue. Congress, which historically has shown very little interest in federal personnel issues, also has a big role to play. Voinovich is convinced that legislators gradually will recognize the importance of human capital matters. Kleeman has her doubts. She commends Voinovich for his efforts. "But he can't do it by himself," she says, noting that in the House, there's little interest in carrying the human capital banner.

Still, Walker insists even a quiet momentum can lead to dramatic changes. "Great movements start with a single person," he says. Walker expects human capital management's placement on GAO's high-risk list will provide incentive for change. "History has shown that when something appears on our high-risk list, that generates heat," he says. "Action usually follows."

An experienced political player, Voinovich knows that victories will be few and infrequent. "I know it's not going to get done in one year, and it's not going to be an easy task," he admits. "But this is not another flavor of the month for me."

Susannah Zak Figura is a Washington-based freelance writer.

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The Human Touch

Susannah Zak Figura — Fri, 01 Sep 2000 00:00:00 -0400

sfigura@govexec.com

he General Accounting Office-that bastion of knowledge that reports to Congress on all things going wrong at federal agencies-has often been a thorn in the sides of seasoned government executives. Over GAO's 80-year history, many a federal manager has received a pounding from his or her agency's authorizing committees because of alleged mismanagement uncovered by GAO auditors and investigators. Critical reports are still a big part of what GAO does, but the agency also is generating an increasing number of reports highlighting good federal and private-sector management practices that agencies can emulate. In the process, GAO is spurring high-level debate about the fundamental systems that define a well-managed agency.

These days, Comptroller General David Walker-an outspoken, gregarious leader, by all accounts-is focusing that debate on federal personnel. He has spent the better part of his nearly two years in office proclaiming "human capital" as one of the most pressing federal management concerns.

"The federal government faces a human capital crisis of significant proportions," he says. "The federal workforce is smaller. It is older. It is, in many cases, out of shape and faces serious succession planning and skills imbalance challenges. Steps need to be taken to recognize that in order to maximize performance and ensure the accountability of government, you can't do it without people, and you can't do it without making human capital strategy a top priority."

But Walker is doing more than just preaching the perils of overlooking human capital matters. He is leading a quiet but vast transformation of GAO's structure and management culture in an effort to lead by example. Central to his reforms has been serious attention to GAO staff-who they are, what their skills are and how much they contribute to the agency's mission. Having studied who's there, by late July he was deep in the process of reconfiguring and streamlining the agency. He also was awaiting congressional action on a package of proposed personnel flexibilities that would give him considerable power to shape his workforce to more effectively do the agency's work. Walker's plans, which haven't come without controversy, may offer valuable lessons and, indeed, a preview of what could be in store for agencies across government.

It's Philosophical

Walker's motivation is "more philosophical than anything else," he says. "We are the agency that has the responsibility to review and evaluate others. In order to be credible and to otherwise be effective, it's important that we be as good or better than anybody we review. Otherwise we're hypocrites." One of the first things he discovered upon joining GAO was that the agency often didn't apply to itself the various recommendations put forth in its reports. "But now it is the rule and not the exception that we apply these tools and methodologies to ourselves as well," Walker says.

Given GAO's unique strengths-more than half its workforce has master's degrees or doctorates, and the agency staff is a manageable size at 3,200-Walker feels obligated to create a model of good government management. At the broadest level, this means overseeing changes of structure and mindset. In the past, "GAO tended to be more hierarchical, more process-oriented, more siloed, more inwardly focused than it should be," he says. "I am trying to work with our leadership team to [make the agency more] results-oriented, integrated and externally focused," and to encourage partnering between groups within GAO and between GAO and outside organizations.

For starters, Walker has injected private-sector lingo into the agency's management vocabulary. He refers to himself as the chief executive officer and wants congressional permission to rename certain Senior Executive Service positions with titles such as chief operating officer and managing director. He's also pushing the "team" concept and has cut GAO's 31 issue areas to 11 teams, though the agency's work still covers the same breadth of subjects.

The team leaders report directly to Walker and his deputy, as do the heads of several new units focusing on agencywide challenges-including one devoted to strategic studies and one for product and process improvement. Having eliminated one layer of management, Walker hopes GAO staff can spend more time performing important studies and less time reviewing them. He also has cut the number of field offices from 16 to 11 as part of the reorganization.

At a micro level, becoming a model organization means repairing damage wrought by the downsizing and hiring freezes of the mid-1990s. Beginning in late 1998, Walker began assembling a human capital profile of his workforce. His management team studied the size, shape and makeup of GAO back as far as 1989 and projected forward based on historical trends. They discovered many of the same problems now facing most of government.

"We found that the average age of our workforce has increased six years in the last six years, that the average age of the GAO worker is 48, that 55 percent of our executives will be eligible to retire within four years, and that a third of our workforce will be eligible to retire in four years," Walker says. Also apparent were gaping holes where GAO needed more experts-in the health-care and information technology areas, for example. In addition, over the years GAO had become a top-heavy organization, with lots of experienced staff but less young talent. The conclusion: Unless GAO revamps its methods of recruiting, training and evaluating employees and sets up a succession-planning framework to cultivate future leaders, the agency could be at risk of long-term failure.

A big part of the solution, in Walker's view, is a new performance appraisal system. "We found that we had suffered from grade inflation in our performance evaluation program over the years in a way that the result of the program did not provide enough meaningful information to individuals or to management and that we needed to basically scrap the [program]," he says.

Walker discounts rumors that under the new approach, for every person who receives the highest rating someone would have to receive the lowest rating. "I don't believe in forcing bell-shaped curves," he says, but adds: "I do believe it's important to get some dispersion. Therefore, you have to look at how individuals do based upon the [competency] standards, and you also have to consider their performance relative to their peer group." The new competency-based system, which is being designed by a contractor, should be in place for evaluators, investigators and auditors by January 2001 and soon after for lawyers and administrative staffers.

Employee Concern

Walker has convinced some influential lawmakers on both sides of the aisle that he can't properly modernize GAO without exemptions from certain civil service rules. Included in his proposal-which has been sponsored by Sens. Fred D. Thompson, R-Tenn., and Joseph I. Lieberman, D-Conn. (S 2595), and Reps. Dan Burton, R-Ind., and Joe Scarborough, R-Fla. (H.R. 4642)-are provisions to create an SES-equivalent supergrade for technical talent and to offer voluntary early retirements and buyouts to people whose skills are overrepresented or no longer needed. He also wants to revise the current rules governing reductions in force so that layoffs can be based on skills and performance rather than length of service, a request that has created anxiety among some employees.

Walker insists the change is critical not just to making his transformation work but also to preserving the agency. "We cannot afford, if we ever have to run RIFs again, to run them on the basis of the existing rules, because the existing rules serve to compound our injuries," he says. "They serve to make our workforce older, they serve to further increase our succession planning challenges, and they serve to decrease our ability to effectively recruit and retain new workers at any level for the future. My job as the head of this agency is not just to make sure GAO can get its job done today, but to make sure we can get our job done tomorrow."

The original proposal had been attached to the legislative branch appropriations bill but was dropped in late July. It is expected to be reconsidered as a stand-alone measure later this year. Given that there are Democratic and Republican supporters of the proposal in both houses, Walker is confident of its eventual passage.

Because GAO employees are not represented by a union, there has not been any large-scale mobilization against the RIF proposal. Still, unsettled employees contacted their elected representatives, who in turn registered the concerns with relevant committee chairmen. It's the uncertainty about exactly how the RIFs would take place that has caused the most concern, says Kyle Adams, chief of GAO's personnel operations branch and a member of the agency's Employee Advisory Council. "If there were more details, I think people would feel better about it," she added. GAO employees clearly are uncomfortable about the possible changes, says another staffer, but there's a general feeling that Walker "has done his due diligence" and is honestly trying to improve the agency.

Reacting to employee concerns, Sens. Paul S. Sarbanes, D-Md., Charles S. Robb, D-Va., and John W. Warner, R-Va., wrote a June 22 letter to Sen. Robert Bennett, R-Utah, chairman of the Appropriations Legislative Branch Subcommittee, stressing the need to hold hearings on the legislation, given that it could set a precedent for executive branch agencies. A similar letter signed by Washington-area congressmen went to Rep. Charles Taylor, R-N.C., who oversees the House legislative Appropriations panel.

Although the American Federation of Government Employees, the largest federal union, has not opposed Walker's legislation, union leaders have made it known that their stand would be different were AFGE-represented employees being directly affected. "If we did represent these workers, I can assure you that we would be up in arms about this," says Beth Moten, legislative director for AFGE. In her view, by implementing the RIF change, "you're basically trying to create a disposable workforce." Federal employees who have devoted long careers to public service should be rewarded for their loyalty, the union argues.

The Office of Personnel Management has also refrained from outright opposition to the legislation, but has expressed concerns. In June, when it appeared the House might soon take up the measure, OPM Director Janice Lachance wrote to members saying that although Congress may decide the changes are appropriate for GAO, "they would be inconsistent with the administration's policies for the executive branch. If Congress chooses to allow these changes for GAO, it must be clear in the legislative history that it has done so without precedence for the executive branch."

Misplaced Suspicion

All the negative attention has resulted from misunderstandings of his proposal, Walker believes. He fully intends to enforce employee protections such as veterans preference and appeal rights if he ever does have to carry out RIFs, he says, and the authority would be used only as a last resort. GAO management first would reassign staff based on individual skills and interests, provide "reasonable retraining" and conduct voluntary early outs and buyouts, he wrote in a June internal agency memo. "If after these actions we still had significant organizational skills and knowledge imbalances that needed to be addressed and that would not be corrected through normal attrition within a reasonable period of time, I would then consider using this additional authority," he wrote.

The suspicion that GAO's changes may set a precedent for other agencies is misplaced, Walker says. "What we are asking for is appropriate for GAO but may or may not be appropriate for other agencies within the executive branch," he says. Though he wants GAO to be a model of good management for all of government, Walker points out that, because GAO is a legislative branch agency with some attributes that are distinctly different from those of executive branch agencies, some of his changes may not make sense for other agencies.

"The comptroller general is a nonpartisan professional with a 15-year term who by definition will have to live with the results of any human capital actions," Walker notes. "Most executive branch agency heads are political appointees of a particular political party who have an allegiance to that party and that administration and who have an average term of two to three years. The opportunity for abuse in the executive branch is much greater, and the checks and balances are much fewer, because the agency head in many cases will not have to live with the consequences of [his or her] actions."

He understands the concerns, though. "Any time you have change, there's fear," Walker says. "But without change, there's no innovation. Without risk, there's no return."

Broader Implications

Walker may say his proposal is intended solely for GAO, but observers agree that the change indeed could set a precedent for other agencies. "It's not designed to be a precedent, and there are no plans to use GAO's experience as an exact model for executive branch activity," but if new RIF rules were to prove successful at GAO, other agency heads might request and receive the same power, says a House staffer.

That's exactly what many human resources experts would like to see. "It's every manager's dream to be able to make this kind of change," says Rosslyn Kleeman, executive-in-residence in The George Washington University's public administration department and former director of workforce issues at GAO. "I think it would be great for the whole executive branch." Kleeman doesn't buy the argument that longtime federal employees deserve extra job protections simply because of their seniority. If their skills are no longer needed and they are not willing or able to be retrained, she says, "they deserve a thank you for everything they've done," but not a guaranteed job.

Sally Marshall, a senior consultant with the National Academy of Public Administration and a former federal human resources executive, agrees. Managers must have the ability to hire and release people in a way that makes sense for an agency, she says. As long as adequate appeals protections are in place, skills and competency should be valued over seniority, she says. Marshall views GAO's effort as a pilot project that, if successful, "absolutely" should be expanded to other agencies.

GAO specifics aside, Marshall believes Walker's focus on human capital could lead to positive changes for all agencies. "It's going to make a major difference in people's opinion and the necessity to pay attention to these human resources and human capital issues," she says, noting that Walker's rounds on Capitol Hill are creating a groundswell of interest. Walker is making it clear that top management must be involved in personnel matters to rectify the current skills imbalances and help avoid future ones, Marshall adds.

Turning Heads

There's no doubt that Walker's message is compelling. Although there's been considerable attention to strategic planning, information technology and financial management in recent years, there's been virtually no focus on human capital, he repeatedly has told lawmakers. Indeed, the federal government still treats personnel as primarily part of the administrative domain. "What I'm talking about is something fundamentally different," Walker says. "I'm talking about human capital, or people, as the key enabler, as a critical part of overall strategic planning and effective performance management."

People in high places appear to be listening. In his fiscal 2001 budget request, President Clinton declared strategic human capital management an administration priority. And in June, he issued a memo to agency heads ordering them to incorporate human resources management goals into their annual performance plans beginning in October.

Congress, too, appears to be more engaged in federal personnel matters than it has been for some time. Civil service reform may be a long way off, but the issues are at least being aired. Sen. George Voinovich, R-Ohio, chairman of the Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia, who has held a series of hearings focusing on federal human capital issues, shares Walker's concerns. "I believe the human capital crisis is one of the most urgent problems facing the government," Voinovich said during a May hearing that highlighted training shortcomings at agencies.

The attention clearly pleases Walker. "There's increasing recognition of the importance of this issue," he says. "There is also increasing recognition that agencies need to be doing more within the context of current law in this area." His hope is that by focusing on human capital matters at GAO, he can spur other agencies to take a hard look at their own challenges and try to address them within the confines of existing civil service rules. Gradually, common themes will emerge regarding what the problems are and how best to attack them. At that point, governmentwide reform will make sense.

For now, Walker is content with small victories. "I am very, very encouraged by recent actions, and I am very hopeful that we'll continue to make progress in this area," he says. "But it's going to take years. Fortunately, I have a 15-year term."

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Contract Reform Still on the Front Burner

Susannah Zak Figura — Tue, 15 Aug 2000 00:00:00 -0400

letters@govexec.com

When Energy Department Secretary Bill Richardson announced he would pursue further management reforms in March, high on the list once again was contract management, an issue that continues to pose significant challenges for the agency. In January 1999, the General Accounting Office declared DOE's contract management a "high-risk area" needing close observation.

Agency officials launched reforms in 1994 to boost competition in the awarding of contracts. Since then, the agency has competed 28 major contracts worth more than $40 billion to manage and operate agency facilities across the nation.

Nevertheless, Richardson said further reforms were needed. In May, he unveiled the Improve Contractor Accountability and Performance initiative, which includes:

Having the DOE Secretary conduct annual performance reviews with chief executive officers of key contractor organizations;
Adding a clause to all facility management contracts permitting the Secretary to direct a contractor to remove its top manager for poor performance;
Holding DOE senior executives accountable for good contractor management through their own performance plans; and
Notifying the Secretary of contractor performance assessments and proposed performance awards before they are paid.

Ensuring that these reforms stay on course will be challenging given that more than 50 percent of the procurement workforce will be eligible to retire within five years, notes Richard Hopf, DOE deputy assistant secretary for procurement. DOE is working with companies such as Federal Express and Oracle to create career development programs for those who remain, but tight resources mean recruitment will remain a challenge. "Budget restrictions still limit the procurement community's ability to replace skills lost in downsizing and bring new blood into the organization," he says.

This year, DOE is competing several major contracts, including one to operate the Waste Isolation Pilot Plant in Carlsbad, N.M., where DOE disposes of nuclear waste. Current operator Westinghouse (which was purchased by BNFL Inc. and Morrison Knudsen in March 1999) did not have to compete for its original contract in 1985, but because of recent reforms must compete to win renewal of the contract, which expires Sept. 30. Fluor Daniel Environmental Management Corp. will be in a similar position when its contract to manage the Fernald Environmental Management Project in Ohio expires Nov. 30. Other major management and operating contracts being competed this year include those for the Oak Ridge Y-12 Plant in Tennessee, the Knolls Atomic Power Laboratory in New York and the Yucca Mountain Repository in Nevada.

DOE officials requested $18.9 billion in funding for fiscal 2001, nearly $1.6 billion more than this year's appropriation. About a third would go to restoring contaminated land and managing toxic wastes left behind by nuclear weapons production during the Cold War.

Another third of DOE's budget would go to national security programs that focus on maintaining the security and reliability of the nation's nuclear weapons stockpile, as well as to those that reduce nuclear proliferation and the spread of other weapons of mass destruction worldwide. These activities are now managed by a semi-autonomous agency within DOE called the National Nuclear Security Administration. Congress ordered the agency created in the National Defense Authorization Act for fiscal 2000 after alleged security lapses were uncovered at the Los Alamos National Laboratory in New Mexico, where top-secret information on nuclear warhead technology is stored.

The remainder of DOE's budget would support science programs and energy research and development.

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Faster and Cheaper, but Not Better

Susannah Zak Figura — Tue, 15 Aug 2000 00:00:00 -0400

letters@govexec.com

ince NASA Administrator Daniel Goldin introduced his "faster, better, cheaper" management philosophy in 1992, the space agency has had some impressive achievements. As Goldin told a Senate appropriations panel in April, NASA launched 146 payloads valued at a total of $18 billion in the past eight years; all but 10 missions were successful.

But after two recent high-profile failed missions to Mars, NASA has come under fire for perhaps reaching too high with its limited resources and for not holding contractors to their obligations. Even Goldin admitted to a Senate panel that "the warning bells of a trend are sounding." He added, "In my effort to empower people, I, Dan Goldin, pushed too hard, and in doing so, stretched the system too thin. . . . Mistakes were made that could have been avoided and must be corrected."

The $125 million Mars Climate Orbiter, which was to orbit Mars as the first interplanetary weather satellite, was lost on Sept. 23, 1999. An independent investigation found the main cause was that subcontractor Lockheed Martin had failed to convert English units to metric units when coding critical software. Then on Dec. 3, Lockheed Martin's $165 million Mars Polar Lander, which was to launch two softball-sized microprobes worth $28 million, also was lost. The mishap also was attributed to software errors.

An independent review of the Mars projects found that the lack of guidelines and policies to implement the "faster, better, cheaper" concept led to project managers "having different interpretations of what is prudent risk." In addition, the Mars program was underfunded by at least 30 percent, the report said, adding, "If adequate margins are available, risk can be effectively managed; if not, risk will grow to an unacceptable level."

Because of the Mars experiences, NASA officials plan to put less emphasis on "faster" and "cheaper" performance and more on better subcontractor oversight, says Thomas Luedtke, NASA associate administrator for procurement. Subcontractors will be expected to have stronger test programs and to ensure proj- ects are managed within prudent levels of risk, he says.

For the first time in seven years, Goldin has asked Congress for a budget increase. The agency's budget has dropped about 5 percent since fiscal 1993. Goldin wants $14 billion, about 3.2 percent above the fiscal 2000 level. Most of the increase would be earmarked for Space Shuttle upgrades and second-generation Reusable Launch Vehicles. Space science and safety-related projects would also see increases. Among NASA's fiscal 1999 contracts, the largest went to Thiokol Propulsion of Brigham City, Utah, for 73 Space Shuttle Reusable Solid Rocket Motors. The contract will be worth as much as $1.73 billion over the next five years.

The next-largest awards were two contracts worth up to $400 million each over five years to provide launch services for NASA and NASA-sponsored small-class payloads. The selected companies were Coleman Research Corp. of Orlando, Fla., and Orbital Sciences Corp. of Dulles, Va.

In an effort to further simplify its contracting process, NASA this year will open its new Virtual Procurement Office, which Luedtke describes as "an electronic method to give the operational procurement people at NASA command of the vast array of acquisition tools available on the Internet in an easy-to-use format." The approach will help procurement officers "leverage the resources of the Internet to better meet their customers' needs," he says.

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Better Spacecraft

Susannah Zak Figura — Tue, 15 Aug 2000 00:00:00 -0400

sfigura@govexec.com

NASA's Rapid Spacecraft Acquisition program is the latest in a long line of innovative contracting strategies at the agency. The RSA program, based at Goddard Space Flight Center in Greenbelt, Md., was born in 1996, when Goddard top management issued a challenge to reduce the lead time of awarding spacecraft contracts from an average of one year to just 30 days. The procurement shop formed a task force to determine how best to meet that goal and within six months had come up with a plan and established a new office-the Rapid Spacecraft Development Office (RSDO)-to implement it.

The results have been impressive. Not only did the office meet the 30-day goal for awarding contracts, it also sped up delivery time from four to seven years to 18 to 36 months. As a result, NASA has been saving upwards of $20 million per mission. NASA officials are now using the RSA program as a model for purchasing launch services and possibly other services in the future, says Thomas Luedtke, NASA associate administrator for procurement.

The impressive numbers stem from the use of firm fixed-price, performance-based, indefinite delivery/indefinite quantity contracts that allow NASA to buy commercial spacecraft that, with minor modifications, can support space missions. In the original solicitation, NASA simply said it needed small to medium-sized spacecraft and related services, and then let private firms tell what they had available to meet the agency's requirements. RSDO staffers then compiled the selections into a catalog from which NASA project managers and other customers can select. In the past, all spacecraft were custom-ordered on a cost-reimbursement basis.

Under the new contracts, customers have access to multiple suppliers. New vendors and products can be added to the catalog through an "On-Ramp" process without undergoing new competitions. On-Ramp proposals are accepted semi-annually over the life of the five-year contracts. Other contract innovations include: Allowing annual updating of technical details and options; Providing the option to have vendors launch the spacecraft, in effect delivering it in orbit; Making it possible to buy individual spacecraft components on an emergency basis.

The contract structure "allows us to keep pace with new technology," while staying flexible enough to meet varying customer needs, Luedtke notes. Because the procurement process now demands fewer NASA resources, the contracts also allow NASA to spend more money than it otherwise could on designing the scientific instruments that will be attached to the spacecraft for data gathering in space. The RSA approach represents a culmination of federal acquisition reforms, and the associated innovative thinking, put in place in recent years, Luedtke adds.

Treating spacecraft as a commercial commodity represents a major "paradigm shift" in the way NASA buys spacecraft, says Bill Watson, current chief of RSDO. In the past, program offices issued specifications for customized spacecraft and paid contractors whatever it took to build them. Now the philosophy is to let industry tell NASA what is available, and then the space agency can determine whether the spacecraft fit its needs, he says. Along the way, commercial providers assume the financial risk in designing and building spacecraft. "If the spacecraft does not work in space, we get all that money [we paid for it] back" or a replacement spacecraft, says Jim Adams, RSDO chief from the office's inception until May, who now works as project formulation manager for NASA's Global Precipitation Measurement Mission. Understandably, contractors haven't welcomed this transfer of risk. "It's been a contentious issue," admits Sharon Collignon, an RSDO contracting officer. But contractors can buy insurance and account for its cost in their proposals, she says.

Not everyone at NASA believed the new approach would work. "There were several project managers who thought I would not succeed," recalls Adams. But they overcame their resistance once they saw how much their own risk was lowered by buying already tested and proven spacecraft, he says. Even the RSDO staff was a little surprised at the quick success. "I thought we would be fortunate if we could hit 90 days," Adams says. "But we beat the 30-day [target] on the first satellite that we offered."

That first satellite was called the QuikSCAT, a satellite with instruments attached to measure the speed and direction of winds over the surface of the oceans. NASA had been flying similar instruments on board a Japanese satellite that had been lost in space. With it went the valuable data stream that NASA had been collecting. At the time, El Niño, a disruption of the atmosphere system over the Pacific Ocean, was playing havoc with weather patterns on the West Coast of the United States, as well as in other parts of the world, causing NASA to want a replacement as soon as possible.

The program managers at NASA's Jet Propulsion Laboratory in Pasadena, Calif., selected the spacecraft they wanted from RSDO's catalog, and within three weeks, the delivery order had been placed. Eleven months later, the satellite was ready for launch. (It didn't launch for another six months, though, because of a backup of other scheduled launches.) "It was amazingly short," recalls Jim Graf, QuikSCAT project manager. Graf notes that there was no request for proposals, no assessing proposals, no negotiations-none of the time-consuming activities typically associated with procuring a spacecraft-allowing the mission to move forward quickly.

Graf says he was a reluctant participant early on. During the first meetings with RSDO staffers, "I sat there with a certain amount of queasiness," he says. Graf feared that the contracts would be too rigid to allow for purchase of a spacecraft that was truly tailored to his mission's needs. But he did find adequate flexibility, and the process ran so efficiently and the results were so successful that Graf was soon a supporter. The RSA program "is a model for innovation and it should be used by others," he says. The savings, speed and lowered risk factor fit well into NASA Administrator Daniel Goldin's philosophy of "faster, better, cheaper," NASA officials say. At Goddard alone, where RSDO placed delivery orders for four of the five small and mid-sized spacecraft launched since 1997, an estimated 28 civil servant work-years have been saved.

The RSA process also allows for a "more agile approach" to carrying out individual missions, Adams says. Under the old system, NASA typically attached 10 to 12 measuring instruments to each spacecraft; it took so many years to design and build one that scientists were eager to have their instruments attached for fear they'd have to wait another several years for another launch chance. Now, only one or two instruments are attached to the RSDO catalog spacecraft; program managers know they'll be able to procure another spacecraft quickly when they need it.

Although the end result may be that NASA buys and launches more spacecraft overall, the agency still saves time and lowers risk, Luedtke says. For one, the commercial spacecraft are significantly less expensive. In addition, if a spacecraft fails, fewer instruments-and therefore less critical scientific data-will be lost.

So far, only small and medium-sized spacecraft are included in the RSDO catalog because those are the items readily available on the commercial market. It will probably be a long time before spacecraft capable of landing on planets will be in the catalog, simply because there's no current commercial need for such equipment, Adams says. The point of the RSA process, Watson adds, is to wait until commercial vendors design, test and build a spacecraft and then buy that proven item.

Luedtke isn't sure NASA will ever be able to buy all its spacecraft via the RSA catalog. But he predicts that as the commercial market expands and NASA program managers see more successful missions launched using catalog spacecraft, the agency will buy less and less custom-built equipment, ultimately saving taxpayers considerable amounts of money.

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Small Government, Big Business

Susannah Zak Figura — Tue, 15 Aug 2000 00:00:00 -0400

letters@govexec.com

he federal market provided lucrative opportunities for contractors in 1999, as vendors tapped into the outsourcing needs of a slimmed-down government. Agencies now rely on private companies to do significant portions of their workloads. NASA, for example, buys off-the-shelf satellites rather than designing and building its own. The Energy Department depends almost exclusively on contractors to clean up nuclear waste. And many agencies use outside groups to maintain and provide support for their computer networks.

The $185 billion pie of large prime contracts for goods and services grew slightly from $182 billion in fiscal 1998. The Defense Department accounts for 67 percent of the contracts, up from 65 percent in 1998. Of the civilian agency purchasers, the Energy Department led with $15.6 billion in contracts, followed by NASA with nearly $11 billion. The General Services Administration was the next-largest purchaser, with nearly $7 billion in contract awards.

The top five contractor powerhouses-Lockheed Martin, Boeing, Raytheon, General Dynamics and Northrop Grumman-remained in their positions. These companies, which do most of their government work for DoD, accounted for nearly $50 billion in federal contracts in fiscal 1999. Lockheed alone represented more than a third of that amount.

Among the most notable changes among the top 20 contractors is the jump of two Energy Department contractors, Morrison Knudsen and BNFL. Morrison Knudsen rose from number 74 in fiscal 1998 to 15th place in 1999, while BNFL jumped from position 106 in 1998 to number 23 in 1999. The shift largely reflects the March 1999 purchase by the two firms of Westinghouse Electric, which was the eighth-largest contractor in 1998.

BNFL's position may be lower on next year's ranking because DOE recently terminated a contract awarded to the company in August 1998. BNFL was to design, build, own, operate and finance a waste vitrification plant at DOE's site in Hanford, Wash. The company said it could do the job for $6.9 billion. But in April, BNFL revised its price tag to $15.2 billion, a move Energy Secretary Bill Richardson called "outrageously expensive and inadequate." DOE plans to conduct an expedited competitive bidding process for the job and make a new award by the end of 2000. The other major shift on the list is Honeywell, which was 17th in fiscal 1999, up from 94th the previous year. The change reflects the December 1999 merger of Honeywell and Allied-Signal, which was ranked 14th in 1998. Although the merger was completed after the end of the fiscal year, both companies' federal contract commitments for fiscal 1999 have been combined under the Honeywell label. Allied-Signal no longer appears on the list.

Slightly higher in the ranking is Computer Sciences, up to 11th from its fiscal 1998 place of 16th. CSC is likely to remain high on the list: In December 1999, the company won a 10-year, $680 million contract to modernize the Army's wholesale logistics operation. CSC will use best commercial business practices and associated technologies to generate efficiencies.

The Bechtel Group climbed from 21st to 13th place. In September 1999, the company won a $3 billion contract to manage and operate DOE's Idaho National Engineering and Environmental Laboratory.

Earlier in the fiscal year, a Bechtel-led team of contractors also won a seven-year, $306 million contract to build a facility for destroying mustard gas containers now stored at DoD's Aberdeen Proving Ground in Maryland. Aberdeen houses more than 1,800 containers-each holding an average of 1,787 pounds-of mustard agent. Other members of the Bechtel team include Battelle Memorial Institute, Horne Engineering and Upper Chesapeake Medical Services.

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Putting Performance Into Practice

Susannah Zak Figura — Tue, 15 Aug 2000 00:00:00 -0400

author@govexec.com

ew aspects of government management have been as transformed in the last few years as procurement. In implementing the 1994 Federal Acquisition Streamlining Act, agencies have injected a considerable amount of performance pressure into procurement activities. Not only must contractors now compete for agency business based on cost and past-performance records, but in order to get many of the fees associated with individual contracts-and indeed to win contract renewals-companies must provide top-notch service.

The transition to this new procurement style hasn't been easy for agencies or contractors. But based on lessons learned by agencies so far, the Office of Procurement Policy has developed a guide to the new approach. The document- "Best Practices for Using Current and Past Performance Information"-was released in draft form for stakeholder comment in March. According to the guide, agencies successfully implementing the new approach with multiple award task- and delivery-order contracts are doing such things as:

Using past performance information to screen which awardees will get further consideration for new orders.
Conducting customer surveys and doing interim evaluations.
Meeting with contractors who are not performing satisfactorily.
Collecting past performance information in a database to use for future awards. The document, a final version of which was expected out this summer, can be found at http://www.arnet.gov/Notes/ performance.doc.

While making the shift to more competitive practices, procurement officials have also been moving toward adapting e-commerce technology to government procurement. The goal is "to create a single, governmentwide point of electronic entry for accessing notices of solicitation, solicitations and related procurement information," Deidre Lee, former OFPP administrator, told a House Small Business Committee panel in April.

The so-called single point of entry, or SPE, would build on other electronic procurement initiatives of recent years. In the mid-1990s, the Federal Acquisition Computer Network began providing notice of solicitations for purchases between $2,500 and $100,000 electronically, Lee noted. Then in 1996, the Commerce Business Daily Network posted electronically all open market contract opportunities previously published only in the print version of Commerce Business Daily. But the CBDNet wasn't designed to provide easy access to solicitations and other important information, Lee said. The SPE will include information on all government contracting opportunities valued above $25,000.

Pilot tests of the concept over the last few years by a number of agencies-including NASA, the General Services Administration and the departments of Transportation, Treasury and Commerce-have yielded encouraging results, Lee said. Users said the system saved them time and improved efficiency. OMB officials say they hope to have SPE fully operational by October 2001.

The Energy Department once again led civilian agency contract spending in fiscal 1999, with $15.6 billion in purchases under prime contracts of $25,000 or more. In April, Energy Secretary Bill Richardson announced a plan to boost contracting opportunities for small businesses through set-aside programs. In addition, large companies interested in new major facility management procurements will have to include small and disadvantaged businesses as prime contract team members and as subcontractors, Richardson said.

NASA was the second-highest civilian spender in fiscal 1999. The agency spent nearly $11 billion in prime contract awards, about the same as the previous year. The General Services Administration followed in third place, with nearly $7 billion in awards.

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High-Tech Hiring

Susannah Zak Figura — Tue, 01 Aug 2000 00:00:00 -0400

sfigura@govexec.com

obert Hosenfeld, personnel officer for the U.S. Geological Survey, has grand ambitions. He envisions a day when hiring someone to fill a USGS job will be almost entirely in a manager's control. With a few clicks of a computer mouse, managers will be able to classify jobs, post vacancy announcements, collect resumes and applications, and get a list of qualified candidates who have been rated and ranked according to their skills whom they can then interview. The whole process will be finished in a matter of days.

To managers who know firsthand the frustrations of navigating the slow, bureaucratic federal personnel system, this scenario may seem too good to believe. But under Hosenfeld's leadership, the USGS has developed an automated recruiting and hiring system that nearly accomplishes that goal. Human resources specialists are still integral parts of the Online Automated Recruitment System (OARS), which was launched in February, but assuming OARS proves successful, it won't be long before human resources staffers are largely out of the equation. And although the USGS still must abide by cumbersome personnel regulations&:151;for example, the Rule of Three, which requires managers to select one of the top three candidates listed on a hiring certificate&:151;managers say automation has made these rules decidedly more palatable.

Other agencies, such as the Defense and Commerce departments and the Federal Aviation Administration, also have been shifting their hiring processes from the paper- and time-intensive manual mode to an automated one. Their goal: to save time and money and to boost productivity by leaving positions vacant for shorter periods of time. The efficiency benefits are clear, but the trend toward automation raises questions of fairness. Should government be entrusting computers with such an inherently human task&:151;that is, evaluating a human's skills and abilities? Then there are quality concerns. Can computers be programmed to pick up on the subtleties that so often are important in distinguishing top candidates from average ones?

Those questions remain to be answered, but for the time being, the prospect of a simpler, faster system alone seems a worthy goal for managers, employees and human resources professionals. "There is a war for talent these days," and automation is helping agencies fare better in that war, says Richard Whitford, director of the Office of Personnel Management's Washington Service Center Employment Information Office. "You can't take months and months and months to fill jobs."

The move toward automation couldn't be coming at a better time: Agency human resources staffs are down as much as 40 percent since 1993, and there is a heightened need for them to focus on strategic workforce planning as federal workers age. Automation frees HR staff from processing personnel paperwork, allowing them to focus on crafting the future workforce.

A New Process

The new systems are taking various forms across government. DoD, for example, uses an "intelligent" search mechanism that electronically reviews resumes and rates and ranks applicants' qualifications based on the presence of keywords in their resumes. USGS and others use a questionnaire with multiple-choice or yes/no questions designed to determine applicants' precise skill levels. Although USGS is not the first to use this approach, OARS is without doubt one of the most comprehensive automated hiring systems in government, with virtually all hiring now going through the system.

Hosenfeld conceived of OARS a few years ago, when he'd reached the peak of his frustration with the labor-intensive federal hiring process. He knew automation would be part of the solution, but he did not just want to automate the existing processes. After seeing private Internet job sites such as Monster.com, which allows people to electronically post resumes that can be viewed by employers, he believed there had to be a better way for the USGS to recruit and hire. OARS "is not a bad process automated," he says. "This is a whole different way of doing business."

Here's how it works. People interested in applying for a USGS job first must register in OARS. As part of the registration, a prospective applicant must post a resume and answer 25 basic questions on subjects such as federal employment experience and veteran status. The computer then reviews the information and tells the registrant what types of jobs he or she can apply for. OARS will make it clear, for example, that someone who does not currently work for the USGS cannot apply for a position that is open only to internal candidates.

"We don't want people applying for jobs they don't qualify for," Hosenfeld says, noting that in the past, people were often unsure which jobs they qualified for and so wasted time and money submitting applications that could not be considered. Human resources staffers, in turn, wasted time reviewing these applications.

Once in the system, registrants can search available job listings and apply online. Applications consist of a series of questions&:151;the number ranges from 15 to more than 100 depending on the job&:151;about one's proficiency in various skills. For example, a question about oral communications skills might ask whether an individual has experience presenting technical information to external groups. Applicants would have to choose from five multiple-choice ratings ranging from "I have not had education, training or experience in performing this task" to "I have supervised performance of this task and/or I have trained others . . . and/or am normally consulted by others as an expert for assistance in performing this task." A traditional application would merely state that good oral communication skills are important for the job, leaving it to the applicant to describe experience he or she considered relevant.

Using the completed application, OARS tabulates a score for each person, much as peer review panels and human resources specialists do under the traditional system. For example, applicants get a certain number of points depending on their skill level and extra points if they are veterans. Almost instantaneously, the computer generates a hiring certificate that ranks applicants according to their scores. At a manager's request, individual questions can be weighted more or less depending on their importance.

Before OARS, it generally took between 32 days and 63 days after a vacancy announcement closed before a manager received a certificate, Hosenfeld notes. Today it takes about four days. The personnel office uses that time to do a quality control crosswalk between the ranking results and applicant resumes to make sure there are no obvious errors. For highly qualified candidates who are likely to be interviewed, human resources staffers also may request transcripts, a curriculum vitae or other paperwork. Once applications are complete and the hiring certificate is prepared, managers can use their computers to gain access to a candidate's questionnaire and resume.

From the applicant's perspective, the process is notably easier. First, it takes only an hour or two to complete a multiple-choice application. Thoughtful applicants have been known to spend days drafting answers to questions about their "knowledge, skills and abilities," or "KSAs," as they're known on traditional applications. Second, because resumes and applications are submitted electronically, there are no photocopying or postage expenses. OARS also will e-mail registrants about new job openings in their areas of interest. Under the old system, the best way to find out about available jobs was by reading bulletin board postings outside the personnel office, Hosenfeld says. Applicants can check the status of their applications online at any time.

Questions Are Key

OARS has seen a considerable amount of interest from job applicants. As of late June, there were more than 11,000 registered users and the number was increasing by about 100 per day. "Man, are we getting applications," Hosenfeld says. "It's like I died and went to heaven."

For a GS-5 hydraulic technician job in Montana, for example, USGS might have received about five to seven applications under the old system. The same job recently posted in OARS attracted 145 applicants. The same goes for hard-to-fill information technology jobs. Before OARS, USGS was lucky to get two or three applicants for a computer specialist position. Now the number is closer to 25. Hosenfeld attributes the high response rate mostly to word-of-mouth recommendations, because he hasn't done any marketing of the system beyond some internal agency presentations.

The numbers are especially impressive given that the agency is seeing candidates of high quality, perhaps even higher quality than before OARS, Hosenfeld says. He believes the process of answering specific job-related questions steers away people without the necessary skills. At the same time, those with high skill levels stand out, he adds.

Pinpointing top candidates, however, is dependent upon asking well-designed questions, OPM's Whitford notes. "The questions should be grounded in an occupational analysis." OPM, which offers automated hiring services to agencies for a fee through its USA Staffing system, pioneered the questionnaire approach.

"The bottom line is, if you ask great questions, you are going to differentiate the great candidates from the not great candidates," Hosenfeld adds. So far, human resources staffers have been the primary drafters of USGS' questions, but they encourage managers to help with the process. Applications that don't have manager input can't be as good, says Sally Lyberger, personnel management specialist at USGS. "This system puts the onus on the manager, and that's where it should be," she says.

Tim King, a research fishery biologist at USGS' Leetown Science Center in West Virginia, knows this firsthand. The first time he advertised an open position for a biologist at his laboratory, none of the five candidates on the OARS-generated certificate were qualified, King says. Most of them had never worked in a genetics laboratory, yet he needed someone to run a genetics laboratory. King hadn't been aware that he could write questions for the application and so had relied entirely on HR office-provided questions that proved too general for his needs. The second time he advertised the job, he helped draft very specific questions about laboratory experience. The resulting certificate yielded four excellent candidates, any of whom could have done the job, he says.

As they gain more experience filling jobs through OARS, USGS personnel staffers are assembling a library of questions from which managers will be able to draw. Eventually, managers will be able to assemble their own applications using proven questions. The human resources staff will be available to address problems and answer questions.

Is It Fair?

Pluses aside, the very idea of having computers assess a person's skills and determine whether he or she is worth interviewing for a job seems inherently inconsistent with what the human resources profession is all about&:151;people. Yet proponents of automated hiring insist the high-tech systems, because they've been designed by and are overseen by human resources professionals, are every bit as people focused as the traditional way. They also are more objective and therefore fairer, proponents say.

"We've not taken the human out of human resources," Hosenfeld insists. "We've actually changed the paradigm" of making hiring decisions. In the USGS case, OARS has made it possible to abolish the peer review panels that used to score applicants based on their answers to vague questions about their knowledge, skills and abilities. That process, done behind closed doors, was often criticized as arbitrary and unfair. "There's so much human error in that" process, Lyberger notes.

Human resources officials across government agree. At the Commerce Department, where merit promotions are automated and systems for hiring senior executives and external applicants are in the works, employees consider the new approach more transparent, says Debra Tomchek, director of human resources management at Commerce. Because the rating and ranking process happens through the automated system rather than review panels, there's less chance for subjective judgments, she says.

Automated review of job applications may be too rigid to pick up on every attribute of a job candidate, adds Mike Edwards, director of personnel for the Federal Aviation Administration. But supervisors can usually uncover that information during the interview stage, he says. The FAA has had an automated system in place for certain occupations since 1996.

There's also the matter of whether a list of multiple-choice or yes/no questions really can identify the best of a group of applicants, especially when they are assessing their own skill level. With OARS, the initial evaluation is based almost totally on the applicant's word, notes Laurel Bybell, associate chief scientist with the USGS Eastern Earth Surface Processes team in Reston, Va., who recently hired someone using OARS. "So I think the interview process becomes more important." Lyberger agrees. "People will always inflate," she says. "That's why you have the interview."

Even applicants see the potential for exaggeration. Robert Kratt, a computer assistant at the Upper Midwest Environmental Sciences Center in Onalaska, Wis., who was hired for his current position through OARS, says he was aware as he answered application questions that he was being ranked based on his answers. "Truth is a relative matter," he says. "I don't feel [the computer] made it more objective because it was the individual rating himself." Kratt knew he was qualified for the job, so if he hadn't gotten an interview, he would have thought it was because he hadn't rated himself highly enough, rather than because he wasn't adequately qualified for the job.

Unions have signed on to OARS, at least for now. "I'm trying to keep an open mind," says Glenn Holcomb, an offset lithographer and president of the American Federation of Government Employees Local 1309 at USGS headquarters in Reston, Va. Still, he's not comfortable with computers taking on a progressively larger role in hiring. A faster system has its merits, he says, but "I'm afraid you are going to lose some good candidates" without some human review. If that happens, Holcomb will be the first to complain, he says.

Payoffs

There remain several unknowns regarding how well automated hiring ultimately will serve agencies and their employees. For example, although OARS appears to be operating smoothly so far, as more people register and more jobs are posted, data management may become an issue, Hosenfeld says. Consistency and compatibility of systems also will need attention. At present, agencies are implementing systems largely without considering governmentwide needs.

As agencies gain more experience with automation, those matters likely will be resolved. In the meantime, the systems should yield a significant payoff, primarily because of saved labor costs. At the FAA, a collection of automated services that includes a rating and ranking system already is saving the agency nearly $2 million a year. Officials expect to save more than $220 million a year using DoD's Modern Defense Civilian Personnel Data System. It will include the resume search tool as well as personnel records and other human resources data and will be fully operational next summer. Hosenfeld says OARS&:151;which has cost about $500,000 to implement&:151;will pay for itself after the first year and generate savings from then on. The costs of recruiting and hiring should drop more than 30 percent, he says. These savings are critical, given the staff cuts human resources departments have seen in recent years.

The leaner staffs simply can't keep up with the paperwork required by a traditional hiring system. Besides, with baby boomer employees rapidly approaching retirement age and a highly competitive labor market, agency personnel shops need to redirect resources so they can play a strategic role in heading off a potential government brain drain. Thanks to automation, USGS staffers will be able to do this. Hosen feld says. "We're [no longer] concerned with the process. We're concerned with the quality of the human resource."

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GAO chief lobbies Hill for workforce flexibilities

Susannah Zak Figura — Wed, 19 Jul 2000 00:00:00 -0400

sfigura@govexec.com

Congress should give agencies the flexibility to do such things as forgive employees' educational debt and allow retirement-eligible workers to continue on a part-time basis without sacrificing pension benefits, Comptroller General David Walker told a House oversight panel Tuesday.

Although the General Accounting Office, which Walker heads, has a significant number of highly educated employees-more than half of GAO staffers hold doctorate or master's degrees-attracting such people may prove increasingly difficult because of the heavy debts many recent graduates carry, Walker said. Loan obligations and modest government salaries together strap new hires with "a double whammy," he told the House Subcommittee on Government Management, Information and Technology.

Agencies also should be allowed to let experienced staffers "retreat into retirement," whereby they could continue working a limited schedule without losing pension benefits, Walker said. Otherwise, as the huge wave of baby boomer employees becomes eligible to retire, agencies stand to lose considerable mission-critical skills and institutional knowledge.

Walker also stressed a need to grant small concessions that would make government a more attractive employer. For example, employees required to travel for their jobs should be allowed to keep the frequent flier miles they accumulate, he said. Many federal employees work as hard or harder than their private-sector peers yet receive considerably lower pay, he noted, adding, "It almost adds insult to injury to say you have to give those miles back."

During the hearing, Walker pressed lawmakers to support pending legislation that would give him the authority to offer early retirement and buyouts to employees whose skills are overrepresented at GAO, and to base any future reductions in force on skills and performance, rather than on seniority, a measure that has generated concern among some employees.

"We critically need this legislation" to overcome skills imbalances triggered by budget cuts and hiring freezes of the mid-1990s, Walker said.

The Senate passed its version of the bill (S. 2595) as part of the fiscal 2001 legislative branch appropriations bill, but the House has not yet voted on the proposal. The matter could be settled this week when the legislative branch funding measure goes to conference committee.

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Human Capital: The Missing Link

Susannah Zak Figura — Wed, 01 Mar 2000 00:00:00 -0500

sfigura@govexec.com

f Comptroller General David Walker has his way, human resources-or human capital, as he calls it-will never again be an afterthought in federal management. He laments that in the past, agencies haven't given their human resources the attention they deserved. In Walker's view, the government cannot maximize its resources and accountability without focusing on its most important asset: employees.

"The key competitive difference in the 21st century will be people," he told human resources managers at a September 1999 conference sponsored by the National Academy of Public Administration in Washington. "It will not be process. It will not be technology. It will be people. . . . The stakes are high." Walker also believes that personnel matters deserve the same level of congressional attention that performance, financial and information technology management have received in recent years. "We have not had significant legislation dealing with the missing link-the people," he notes.

There appears to be a growing realization among government executives that Walker is right. Having struggled through downsizing and budget cuts over the last several years, agency officials are now seeing the unfortunate results of not having given their personnel function adequate priority during those transitions. In fact, human resources departments were among the hardest hit by job cuts. In hindsight, agencies see that buyouts and reductions in force were done largely without planning, so that in many cases they lost some of their best employees and now don't have the skills they need on board .

Demographic and market trends make correcting past failures all the more difficult and important. The federal workforce is aging rapidly. By 2004, nearly 30 percent of federal employees will be eligible to retire, with 19 percent eligible for early retirement. For senior managers, the numbers are even more dramatic. In the next five years, 60 percent of Senior Executive Service members will be eligible to retire, with another 21 percent eligible for early retirement. Exacerbating the problem is the tight labor market, which makes attracting new employees-especially those in technical occupations-hard to do with government salaries. All these signs point to an emerging crisis in the federal workforce, Walker says.

But there is a solution, insist Walker and many within the human resources community. Aggressive recruiting, quality training and leadership development are part of that solution. But overshadowing these elements are the critical tasks of workforce analysis and planning to make sure skill needs are being met today and will be met in the future. "When we're coming out of a situation where we've been under constant streamlining and downsizing and rightsizing, as some people may call it, it's all the more important that we engage in this kind of analysis because our resources are fewer-both human and dollar resources-so we can't afford to make mistakes about what we're going to need in the future," says Evelyn White-Brown, deputy assistant secretary for human resources at the Health and Human Services Department. Indeed, workforce planning appears to be today's guiding principle for federal human resources managers.

Practical Steps

Walker realizes that many agencies may feel intimidated by the work they need to do, so the General Accounting Office is offering various forms of guidance. First, the agency is trying to lead by example, by making human capital matters a top internal priority. Walker himself has long been interested in the issue. "It's a topic I care about deeply," he says. Before taking GAO's helm, he headed the human capital services practice at Arthur Andersen LLP and has co-authored a book called Delivering on the Promise: How to Attract and Retain Human Capital (Simon and Schuster, 1998). Second, GAO is trying to raise the profile of the issue with Congress so that eventually there might be legislative reforms that can speed up federal hiring and fix other frustrations with the civil service system. In the next few years, GAO also will identify private-sector best practices that can serve as potential models.

Perhaps most helpful to agencies in the short-term is GAO's discussion draft document published last September called "Human Capital: A Self-Assessment Checklist for Agency Leaders." In his preface to the document, Walker argues that while legislative reforms ultimately will be needed to make the civil service system more flexible and competitive, stakeholders have yet to reach the consensus needed to achieve that reform. "But even in the absence of fundamental legislative change, agency leaders can still take practical steps to improve their human capital practices," he writes. "The first step to this end is self-assessment." Through this process, Walker believes, a consensus will develop on the changes needed in law.

The five parts of GAO's self-assessment framework are:

Strategic planning: to establish agency mission, vision, core values, goals and strategies.
Organizational alignment: to integrate human capital strategies with core business practices.
Leadership: to foster committed leadership and give continuity through succession planning.
Talent: to recruit, hire, develop and keep appropriately skilled staff.
Performance culture: to enable and motivate performance while maintaining accountability and fairness for all employees.

Implementing this framework requires an information system that allows managers to identify skills imbalances and project future needs, GAO notes. Also essential is a human capital strategy and workforce planning system that are directly linked to the agency's overall strategic and performance plans, things relatively few agencies have. According to GAO's July 1999 review of agencies' fiscal 2000 annual performance plans, many plans don't address human capital matters at all (GGD/AIMD-99-215). In addition, agency leaders must make sure sufficient development programs are in place to support a formal succession plan so they will not be faced with a leadership void once baby boomer managers retire, GAO notes. The framework is based on GAO's work with well-managed private-sector organizations, and state, local and foreign governments, as well as the Malcolm Baldrige National Quality Award Program and the President's Quality Award Program.

Data Driven

The Office of Personnel Management, too, is spotlighting workforce planning as a critical element in federal management. Agencies can't hope to achieve their strategic mission goals without paying attention to the talent factor, says OPM Director Janice Lachance. "There are no results without the people to put them in place," she says.

In an effort to provide leadership on the matter, OPM is developing a workforce planning model that agencies can tailor to their particular needs. The personnel agency started the project in late 1998, after an internal analysis showed it soon would lose large numbers of employees to retirement. The more research they did, the more OPM planners realized that all agencies would be facing similar problems, Lachance says. "The numbers [on expected retirements] are an urgent wake-up call for anybody who expects to lead an agency into the 21st century."

While the product is still in the design phase, the plan is to create a Web-based system that will prompt users with relevant questions guiding them through the following phases of the planning process:

Setting strategic direction: Establish agency vision and objectives, and position human resources to be a strategic partner in the process.
Identifying supply and demand: Analyze demographic and other data to determine workforce needs and the best sources from which to draw talent.
Scoping the discrepancies: Study gaps in agency skills base and needs, and how future demographics or other factors might change either.
Developing a plan of action: Determine strategy for filling needs via recruitment, succession planning, restructuring or other means.
Monitoring and evaluation: Constantly reassess plans based on successes, failures and changing agency needs.

The system will allow users to link to a library of helpful research. It also will be able to access various data from a single point of entry. These will include data from: the Bureau of Labor Statistics; OPM's Central Personnel Data File, which includes workforce data on diversity, educational levels and age; and the Census Bureau. Agencies will be able to pull their own human resources data into the system to do trend analysis and comparisons between the agency's workforce and the broader workforce. "It's going to be a one-stop shop for anyone who wants to do workforce planning," Lachance says.

Last September, OPM awarded a contract to the SAS Institute to develop a prototype that will be tested by OPM and the Social Security Administration. Once the kinks are worked out of the prototype, a larger pilot test with more agencies will begin. OPM hopes to have the system available governmentwide by late 2001. Unlike other OPM services, the data system will be provided free of charge to agencies.

Results from the Defense Department, which spent several years developing its own workforce modeling system, suggest OPM's effort could be a real boon to other agencies. DoD's model is built on the probabilities of various factors affecting a person with certain demographic characteristics. DoD officials can aggregate the data and then project future needs. "That is enormously helpful because we can see where we're going to be if we don't make any policy changes and if we don't like where we're going to be we can start making the changes now that give us a different result," says Diane Disney, deputy assistant secretary of Defense for civilian personnel policy. "We believe very strongly that you can't rely on anecdotes for something as important as the future of the workforce. You need to look at what the data tell you."

Time Is Right

This is not the first time GAO and others have stressed the importance of workforce planning. In fact, in 1980, GAO published a report on the same topic, yet little was done in response. But back then, no one really knew how to do workforce planning, says Rosslyn Kleeman, distinguished executive-in-residence at The George Washington University and former director of GAO's human resources division, which published the 1980 report. Besides, agencies had the luxury of having enough employees to do any necessary jobs, so no one thought planning was crucial. But now, "It's even more important with budget cuts and downsizing to identify where your needs are and where your priorities are," she says.

Kleeman and others believe federal managers are better equipped now to make the transition. There have been a number of related reports published over the last 20 years from GAO, the NAPA and the Merit Systems Protection Board that have contributed to the debate and helped educate agencies, notes John Palguta, director of policy and evaluation at the MSPB. A September 1999 NAPA study, for example, describes efforts at several agencies such as SSA-which was ranked highly by last year's Government Performance Project--where workforce planning is successful. In addition, the 1993 Government Performance and Results Act and the Clinton administration's reinvention effort have forced agencies to focus on performance and strategic planning as never before, Palguta adds.

At the same time, the federal personnel function itself has dramatically changed since 1980. In 1993, OPM abolished the massive Federal Personnel Manual and delegated most human resources duties-such as "examining" authority to decide which job applicants warrant serious consideration-to departments, many of whom then delegated down to bureaus and even lower levels. That decentralization has shifted human resources concepts to the minds of line managers. Now it's in their best interest to make sure human capital planning is done and that it takes their mission goals and objectives into consideration.

The fact that today's workforce is more mobile makes planning essential, Lachance says. "People don't stay in a single job in a single agency anymore." They not only move among agencies, but also between government and the private sector. In addition, government today must hire people who have specific task-related skills, but who also are team players and able to promote good customer service--qualities OPM refers to as "whole person skills." With all these changes, Lachance says, "agencies are facing a very, very different world and one that they can't deny is crying out for strong workforce planning."

Follow Through

Few federal officials would disagree with GAO's self-assessment principles. "But as with most good ideas and frameworks, of course, the hard part is putting them into practice," Palguta says. "I suspect that workforce planning in many agencies takes a definite back seat to the day-to-day operational concerns of human resources management." Lachance agrees. "Most agencies look at human resources as a support function," she says.

In many cases, it's all downsized human resources staffs can do to keep up with their daily responsibilities. Between September 1993 and September 1997, the number of employees in civilian personnel offices across government fell by nearly 9,000, or 21 percent, according to GAO (GGD-98-93). As a result, there are fewer knowledgeable people to do the analysis and planning. And because the system has been oriented more to process than performance for so long, most federal managers and human resources specialists are still more focused on short-term needs than long-term ones. The performance mentality hasn't yet permeated the workforce, Palguta notes, adding that such a culture change may take years.

Even agencies that are able to do analysis and planning aren't guaranteed results. For planning to be effective, officials must have "the will to follow through on those plans," Palguta says. "You need somebody who cares about these issues at the highest levels of the agency." The workforce planning process needs to be part of an agency's broader strategic thinking, adds Lachance. "It has to be integrated in any agency's [overall] planning effort." And plans must be routinely reassessed and updated, she says. "It's not something you can do periodically."

Agency Progress

No agency has mastered workforce planning-and the challenge of follow through-but some clearly are ahead of others. At the Coast Guard, the top performer among this year's Government Performance Project agencies, for example, human resources is considered one of the "Big Four" management priorities, along with operations; systems; and marine safety, security and environmental protection. The agency went through a major downsizing from 1994 to 1998 that cut 4,000 people from its ranks, including 18 percent of its human resources management staff. Despite the ensuing personnel staff and skill shortages, the agency continued workforce planning to determine where the most critical needs were and how to meet them. One planning document, "Coast Guard 2020, Ready Today...Preparing for Tomorrow," describes operational challenges the agency expects to face 20 years from now. Officials also have the capability to pull data-on topics such as personnel, payroll and available training funding-into predictive models so they can monitor and project needs.

The planning process highlighted the urgency for an aggressive recruiting program, prompting Coast Guard officials to actually divert resources from other programs to boost recruiting efforts. Because of the strong economy, they've had the most trouble attracting entry-level military recruits. So now they're strategically targeting their audience of potential candidates.

One of their more innovative tactics-and unusual for a government agency-was a six-month advertising contract with the World Wrestling Federation. "While there has been great concern among many that an association with the WWF might hurt the Coast Guard's image, marketing information showed that a significant percentage of the eligible recruiting population watches professional wrestling," agency officials note.

The Veterans Benefits Administration also is engaged in aggressive recruiting, primarily to prepare itself for the upcoming exodus of retiring baby boomers. In 1998, the agency developed a workforce succession plan and related national recruiting plan called "Opportunity 1998." Recruiting focused on key benefits-delivery positions such as veterans' service representatives and vocational rehabilitation counselors. They repeated the recruiting effort in 1999 and expect to continue doing so for the next several years.

At the National Park Service, a major shift in mission focus has made targeted recruiting essential. After more than 80 years, officials are refocusing the agency's primary management concern from recreation to conservation. The Natural Resource Challenge launched last August to jumpstart the change included a hiring plan to build the agency's natural resource management workforce. Officials are planning a brochure and a new Web site specifically designed to promote the resource management career field.

Once agencies have successfully recruited, they must develop staff skills and cultivate leaders-no easy task in these tight budget times. The Coast Guard complains that most of its training funds must go toward job-specific training, leaving too little for professional development.

Still, in 1998 the service created its Leadership Development Center, which provides leadership training for both civilian and military staff. Anticipating large numbers of retirements among senior staff, the Veterans Benefits Administration also is turning attention to leadership training. Last August, the agency launched an SES candidate development program.

Civil Service Reform

If one follows GAO's logic, once agencies perform thorough self-assessments and workforce planning, they'll understand exactly where the biggest barriers to effective HR management are and will be ready to agree on civil service reform. It's unclear whether stakeholders will ever reach consensus, however. The Clinton administration has tried to initiate reform, but each time failed to win sufficient stakeholder support. The latest attempt last year focused on a performance-based pay structure that would have established financial incentives for managers to achieve desired program outcomes. Clinton's proposal also would have increased delegation of human resources authority to line managers.

The proposal didn't get far. Unions refused to support it until Clinton forced agency leaders to expand the scope of issues addressed during labor-management negotiations, as called for by the 1993 executive order establishing labor-management partnerships. Agency managers, meanwhile, have opposed expanded negotiating. The proposal also failed to get the support needed in Congress for hearings, much less passage.

The administration hasn't given up, though, says Lachance, who insists, "this is a good time for civil service improvements." Negotiations are ongoing with all the stakeholders, she says. For his part, Walker is working to build awareness and support for changes in Congress. "You have to have a few seeds" of support, Walker says, adding that he's actively recruiting willing congressional sponsors. "I think we'll be successful. But we've got to walk before we run. The issue is not ripe for legislative change and it probably won't be for a while." GPP report card

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Human Resources

Management Grades
Army Corps of Engineers	A
Coast Guard	A
National Park Service	B
VBA	B
SFA	C

Rating Criteria
Conducts strategic analysis of present and future human resources needs and workforce planning. Able to obtain needed employees Able to maintain a workforce with a mix of skills that match its needs. Ability to motivate and reward employees to support strategic and performance goals.

Best Practices
Workforce planning to align staffing with mission goals. The Coast Guard has been planning its workforce needs as far as 20 years out to help avoid future skill shortages like those experienced when the agency downsized by 4,000 people between 1994 and 1998. Targeted recruitment to satisfy most critical skill needs. VBA is focusing recruiting on key benefits-delivery positions because so many of those who now hold the jobs will be retiring soon. Constant reassessment of workforce needs and trends. OPM officials urge agencies to routinely reassess and update their staffing and skill needs according to mission changes, demographics and other factors. Leadership development to promote effective management and improve retention. Both VBA and the Coast Guard have developed special programs designed to cultivate leaders in the hope of avoiding a future leadership void. Data systems capable of collecting and analyzing workforce data. OPM is developing a Web-based system that all agencies can use to help project workforce needs and analyze trends.

Best Practices

Workforce planning to align staffing with mission goals.
The Coast Guard has been planning its workforce needs as far as 20 years out to help avoid future skill shortages like those experienced when the agency downsized by 4,000 people between 1994 and 1998.

Targeted recruitment to satisfy most critical skill needs.
VBA is focusing recruiting on key benefits-delivery positions because so many of those who now hold the jobs will be retiring soon.

Constant reassessment of workforce needs and trends.
OPM officials urge agencies to routinely reassess and update their staffing and skill needs according to mission changes, demographics and other factors.

Leadership development to promote effective management and improve retention.
Both VBA and the Coast Guard have developed special programs designed to cultivate leaders in the hope of avoiding a future leadership void.

Data systems capable of collecting and analyzing workforce data.
OPM is developing a Web-based system that all agencies can use to help project workforce needs and analyze trends.

]]>

Progress in the Parks

Susannah Zak Figura — Wed, 01 Mar 2000 00:00:00 -0500

sfigura@govexec.com

n October 1991, in the picturesque Rocky Mountain town of Vail, Colo., National Park Service managers, environmentalists, scholars and other park enthusiasts gathered for an airing of the agency's woes. The goal of this 75th anniversary symposium was to reach consensus on the most pressing management problems facing the agency. What they came up with-and what's come to be known as the Vail Agenda-outlined problems with everything from natural resource protection to financial management. The "agency is beset by controversy, concern, weakened morale and declining effectiveness," the group concluded. "There is a wide and discouraging gap between the service's potential and its current state."

These were not new observations. Several reports released over the last 40 years have decried, for example, the fact that the Park Service rarely has based natural resource decisions on adequate scientific evidence. Although the Vail Agenda didn't break new ground, when viewed alongside other more recent reports, new laws and policy changes, the document appears to have launched the agency on a credible course of reform. Observers, who have seen other reform attempts tried and abandoned over the years, aren't celebrating yet. But as Phil Voorhees, senior director of park funding and management at the National Parks and Conservation Association, says, "A lot of things are in play that all lead in the same direction. They all point to a much tighter style of management across the National Park Service."

In structure, the Park Service is one of the most complex federal agencies. Its 378 units are divided into 20 separate categories, including national parks, national preserves, national rivers, national seashores and national monuments. The sites are spread over 83 million acres in every state except Delaware, and also in the District of Columbia, Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Mariana Islands. The agency has 23,000 employees to maintain and protect these areas and serve the more than 285 million visitors they receive annually.

Many parks have seen staggering increases in visitation in recent years, straining their natural environments-air, water and wildlife-and further complicating the job of managing the sites. At the same time, with laws such as the 1993 Government Performance and Results Act, as well as park-specific reforms included in the 1998 National Parks Omnibus Management Act, managers in the $1.8 billion agency today face extensive planning and budgeting responsibilities. "The demands placed on administrative staff have far outpaced our ability to deliver," says Park Service Controller Bruce Sheaffer. "It's very hard to keep up."

Nevertheless, many park managers are surprisingly accepting of their additional responsibilities. True, they feel overwhelmed at times by the demands, especially since a 1994 reorganization pushed many administrative duties from the regional level down to the parks. But overall, they see the value in holding park managers accountable for achieving results. "I think it's the reality of effective management," says Dave Mihalic, superintendent of Yosemite National Park. "There's more to operating a national park than putting the flag up and taking it down. If we were doing an adequate job, we wouldn't have these [law and policy] thrusts. The facts speak for themselves."

Rejuvenating Resources

One of the most significant changes under way at the Park Service is a shift toward a more science-based approach to decision making. The latest efforts were spurred largely by a 1997 book by Park Service historian Richard West Sellars called Preserving Nature and the National Parks: A History (Yale University Press). Sellers documented the agency's historical reluctance to seriously attempt science-based management. Both environmentalists and many Park Service employees embraced his conclusions.

Environmentalists have complained for years about the dearth of data on natural resources in the parks. "Scientific information is critical to effective management of park resources," noted a 1997 study, Reclaiming Our Heritage: What We Need to Do to Preserve America's National Parks, conducted by the Natural Resources Defense Council and the National Trust for Historic Preservation. "Without it, the Park Service cannot adequately assess the damage being done to park resources, let alone take the necessary steps to stop it. .... Many of the resources...are deteriorating and, in some cases, disappearing without anyone's knowledge."

"Most [Park Service] management practices seem to emphasize recreational pursuits over natural resource protection," argues Rose Fennell, director of the Wilderness Society's National Park Service program. For example, sand boarding-similar to surf boarding-is allowed at Great Sand Dunes National Monument in Mosca, Colo., she says. The Wilderness Society believes sand boarding may cause long-term damage to the dunes.

To be fair, since the creation of the Park Service, the agency has a dual mandate: to protect its natural resources but also to "provide for the enjoyment" of them. Back in 1916, the agency's first director, Steven Mather, considered attracting people to the parks critical for developing a national appreciation for them. For the most part, his recreation-focused philosophy has governed Park Service management ever since. Congress has reinforced this focus by directing its attention to visitor services, which are, after all, the most publicly visible-and therefore politically pertinent-elements of Park Service management. But this appears to be changing.

Last August, Park Service Director Robert Stanton committed the agency to a Natural Resource Challenge. "Throughout its history, the National Park Service has spent money on serving the people who visit the parks, resulting in excellence in visitor service," the challenge report notes. "The same level of excellence is now needed in natural resource management. . . . Decisions must now respond to the deteriorating state of our natural resources and our serious need for information and staffing."

Specifically, the plan promises to do such things as inventory natural resources, monitor air and water quality, protect the habitats of endangered and native species, remove non-native species, collaborate with outside natural resource experts and use parks as scientific laboratories and classrooms. Park Service officials also are planning an aggressive recruiting strategy to attract qualified people into the agency's natural resource management workforce.

Congress, too, has weighed in on the science-based management issue. The 1998 reform law requires the agency to establish baseline data and a system for monitoring natural resources. Under the law, the trend in resource conditions now will be a "significant factor" in the annual performance evaluations of each park superintendent. Destry Jarvis, assistant director of the Park Service, calls this a "wonderful" provision. "It's not just how many visitors you get and whether you get your [periodic] management plan done on time," he says. "It's the condition of your resources. That's a big deal."

The statute also sets up a procedure for establishing new park units, which must be created by Congress. Historically, decisions to create new units often have been based more on local politics than on a real need for a given site to become part of the national park system. Each new park puts more pressure on agency resources, and sometimes it makes more sense for a site to be managed by a state or local government or a private organization. Now, before Congress can establish a new unit, the Park Service must conduct a scientific review of the proposed action. Congress still has the ultimate say, but now legislators are supposed to base their decisions on science rather than politics. "This is attempting to add a little discipline to the process," Jarvis says.

Science and Management

The reform law and the natural resources initiative have the potential to transform how the agency manages its natural and cultural resources, says David Harmon, executive director of the George Wright Society, a professional association dedicated to the protection, preservation and management of cultural and natural parks through research and education. At least now there's an explicit mandate for the agency to base decisions on science, Harmon says. "Now there are arrows in the quiver. This thing is on the books." Stanton's resource challenge, he adds, is a sign that top agency officials are committed to implementing its new mandate.

Harmon's group is named after George Melendez Wright, the first chief of the Park Service's wildlife division, who was one of the agency's staunchest supporters of science-based conservation and management. He died in 1936 at the age of 32. Some argue that Wright's era was the last time the Park Service gave natural resource management serious attention.

Some park managers, however, have long understood the importance of effective resource management. For example, Marc Koenings, superintendent of Assateague National Seashore in Maryland, is a biologist by training and views environmental stewardship as a critical role for Park Service managers. "You need good practical science" to fulfill the agency's mission to protect resources for the benefit of future generations, he notes. Having that science and applying it to management decisions injects integrity into the process, he says.

A major hurdle to instilling this attitude agencywide has been the fact that relatively few of the highest ranked park managers have scientific backgrounds. But that, too, appears to be changing. Increasingly, the agency is acquiring the scientific skills it needs, says Charles Clusen, senior policy analyst at the Natural Resources Defense Fund. People with science backgrounds, he adds, are gradually rising up the ranks and becoming park superintendents, indicating that the agency eventually may fully adopt the new management philosophy.

Harmon agrees. The generation of employees that came of age during the environmental movement of the late 1960s is now reaching superintendent-level positions. A resource-management philosophy is "second nature to them," Harmon says. "You could see a generational flip-flop." Both Clusen and Harmon have seen the agency abandon promising reform drives in the past, however, so they are reserving their praise. But if officials follow through on their intentions, the agency may significantly improve its natural resource management practices in the next decade, they say.

Fiscal Frustrations

Park Service officials also are taking a serious stab at improving their budget process. Individual parks generally have been able to produce budgets useful at the local level. But because each park has its own way of documenting and justifying budgetary requirements, it's been difficult to get an accurate picture of servicewide needs, agency controller Sheaffer says. In addition, the agency simply hasn't had the financial management skills on staff to fully address the matter.

Agency officials and observers-including Congress, which has been highly critical of Park Service financial management practices-are cautiously optimistic that a business planning initiative launched in 1997 may yield improvements. In 1999, 12 parks participated in the initiative, which is still in the pilot stage. The effort is a joint project of the Park Service, the National Parks and Conservation Association and private foundations. Private funding has enabled graduate business students to spend summers at parks developing business and budgeting plans.

The goal is to create a process that will document in one place each park's financial activity-past, present and future-so it can account for every dollar spent. "It's a documentation process that says where they've been, where they're going and where they're going to be," Sheaffer says. Although it could take several years to fully refine the system, agency officials hope to create a prototype plan that other parks can use as a model, ultimately allowing the agency to collect uniform information nationwide.

This effort is important because tracking agency budget numbers has become more complex as the number of funding streams has increased. Not so long ago, parks were funded almost entirely by annual congressional appropriations. But now they're receiving increasing amounts from private foundations and citizens groups, and thanks to a special program authorized by Congress in 1996, many parks now keep most of the fees they collect from visitors. In the past, that money went directly to the Treasury.

To determine how useful the business planning initiative will be, agency officials will have to answer the question "Is this worth the price?" says Doug Morris, superintendent of Shenandoah National Park, who has participated in the pilot. Even with the help of the business students, managers need to devote a great deal of time and energy to the plans.

Some park superintendents question whether one prototype realistically can be applied to the varied inventory of Park Service sites, each of which has unique needs. The key to the initiative's success will be finding the right balance between a document that is useful to park managers and one that meets the needs of headquarters staff and Congress, says Yosemite's Mihalic. Park staff must be able to use the plans to better manage their own daily operations to give them the incentive to generate the credible numbers Congress wants, he says.

Also expected to improve financial management practices is a provision of the 1998 park reform law mandating more openness in the budget process. Now each park must publish its budget every January so that the public can see exactly how money is being spent. The agency welcomed the requirement, believing that more openness will be good for financial accountability, Jarvis says.

Burgeoning Backlog

Park Service progress appears to be considerably slower in the capital asset management realm. The 378 park units are home to more than 16,000 permanent structures, such as visitors centers; 8,000 miles of roads; 1,500 bridges and tunnels; 5,000 housing units; 1,500 water and waste systems; 200 radio systems; more than 400 dams; and more than 200 solid waste operations, all of which are valued at more than $35 billion. But funding shortfalls have made it impossible for the agency to keep the inventory in good shape, leading to a huge backlog of maintenance and construction projects.

Congress has grown increasingly frustrated with the situation. In 1985, after the General Accounting Office found that the Park Service had no means to centrally document and monitor maintenance, legislators ordered the agency to develop a comprehensive, standardized maintenance management system. The computerized system was to track maintenance needs on a regional basis and help with prioritizing projects. But the effort "failed miserably," as one park manager puts it. Indeed, a March 1998 review by the Interior Department inspector general review concluded that many park superintendents had abandoned the system because of inadequate technical support, system failures and inaccurate system-generated reports. Having handed over $6 million to create the system, Congress was none too happy.

As the Park Service struggled to get a handle on its maintenance needs, the problem only worsened. In 1987, the agency estimated it had a $1.9 billion backlog. Since then, estimates have exceeded $5 billion. Although they agree that the backlog is too high, legislators don't trust these numbers, for in 1998, GAO faulted the agency for basing backlog estimates on unreliable data that, like the budget numbers, are collected differently at each park.

There is "no common definition as to what items should be included in an estimate of the maintenance backlog," Barry Hill, GAO associate director for energy, resources and science issues told a House Appropriations subcommittee in February 1998. "The Park Service compiles its maintenance backlog estimates on an ad hoc basis in response to requests from the Congress or others; it does not have a routine, systematic process for determining its maintenance backlog."

GAO also criticized the agency for lumping construction needs into its maintenance estimates. More than 90 percent of the backlog estimate is actually for construction, Hill noted, adding, "Including these types of projects in the maintenance backlog contributes to confusion about the actual maintenance needs of the national park system."

During hearings on the agency's fiscal 2000 appropriations, Hill reiterated GAO's concerns. He credited the Interior Department with providing guidance to its agencies on using uniform definitions for maintenance data and on developing priority maintenance plans, but said the Park Service "still does not have accurate information on its maintenance needs."

Encouraging Signs

Park Service officials have a different view. Since 1995, they've been using a prioritization process called Choosing by Advantages, which carefully weighs a potential construction project's value on a point scale by considering how much it will contribute to the agency's goals and objectives, says Park Service Deputy Director Denis Galvin. The process yields a five-year priority list. A new Project Management Information System, created two years ago, holds data on each park's construction and maintenance needs. "It's better than previous systems in that it attempts to capture all the projects in one place," Galvin says.

Galvin gets frustrated when he hears strong criticism from congressional staff and GAO that seems to ignore these efforts. "It gets me damned mad," he says. With Congress only willing to invest about $125 million a year in construction projects, getting on top of the backlog is nearly impossible. Galvin can quickly list off a number of needed projects in Washington, D.C., alone that would cost well over $50 million. And with Congress adding an average of five units to the park system each year, the problem is likely to worsen.

Nevertheless, Rep. Ralph Regula, chairman of the House Appropriations Interior Subcommittee, says he's optimistic about the agency's efforts. "I've seen some encouraging signs," he says. For starters, there's more money available for maintenance now. During its first two years of operation, the recreational fee program brought an extra $182 million, much of which has been earmarked for maintenance. "That's helped a lot," agrees Galvin. In addition, the 1998 Transportation Equity Act for the 21st Century more than doubled the money available each year for park road repair.

Regula also is pleased with changes made at the agency's Denver Service Center, which traditionally was responsible for designing and supervising new building projects. Congress ordered drastic cuts at the center in 1998, after learning of excessive-and irresponsible, some thought-spending. Among the headline-grabbing projects triggering the reforms was a two-hole outhouse without running water at the Delaware Water Gap in Pennsylvania that cost several hundred thousand dollars to build. Park Service officials also were chastised for spending nearly than $600,000 to build single-family homes for staff in Yosemite National Park, considerably more than the average local home costs.

The National Academy of Public Administration published a review of Park Service construction policies in June 1998 that recommended ways to control costs. Based on those findings and congressional hearings on the topic, later that year legislators ordered that the center's staff be slashed in half and that 90 percent of design work now be contracted out to the private sector. Saving money on design and construction means the agency can spend more on maintenance, Regula says.

Building Relations

In the view of many Park Service managers, effective long-term management ultimately depends on more than just good internal systems. Building a stronger connection with the public, they say, is critical. To do this, the agency is embarking on what officials call a "messaging project." Using focus groups, they are assessing what the public knows about the Park Service, what people expect from their parks and how best to communicate with constituents. These efforts will help the agency better understand its future needs, as well as educate the public about the importance of natural resource stewardship, says Marie Rust, the Park Service's northeast regional director.

The agency needs to constantly inform people about the state of their parks, says Shenandoah Superintendent Morris. "The future of the Park Service depends on an engaged public," he says. "An engaged public engages elected officials." The nation's parks will forever need a concerned constituency, Morris adds. "The threats against parks never go away. It's not a job you do and it's over."

GPP report card

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National Park Service Report Card

Financial Management	C
Human Resources	B
Information Technology	C
Capital Management	C
Managing for Results	C
Agency Grade	C

NPS
National Park Service

Parent department
Interior

Created
1916

Mission
"To conserve the natural and cultural resources and values of the National Park System for the enjoyment, education and inspiration of visitors."

Top official
Robert Stanton

Did You Know?

National Park Service sites host about 275 million visitors each year. That's about the same number of people that live in the United States.
The three most visited park system sites are: the Blue Ridge Parkway, Golden Gate National Recreation Area and the Great Smoky Mountains National Park.
The Park Service's full-time staff level, which is about 23,000, swells by about 2,000 in the busy summer months.

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Safer Days Ahead

Susannah Zak Figura — Wed, 01 Mar 2000 00:00:00 -0500

sfigura@govexec.com

he Occupational Safety and Health Administration has made great strides toward improving management practices during the last year. Were the agency to be graded by the Government Performance Project again this year, undoubtedly its marks would rise. OSHA's goal in implementing recent changes has been to better achieve the goals and objectives set out in its strategic plan, says agency Administrator Charles Jeffress.

Take human resources management, for example. During last year's Government Performance Project, current and former OSHA officials expressed frustration that human capital issues had been largely overlooked by top management for years. Among their chief complaints was the fact that most OSHA supervisors are industrial hygienists or safety engineers who moved up the ranks but still lack many of the skills to be good managers. These and other concerns appear to have filtered up.

Last spring, Jeffress gathered his senior executives to discuss what needed doing to improve agency management. High on the list was more attention to training and to developing internal talent, Jeffress says. Among the new initiatives that grew out of that meeting is a one-year senior executive candidate training program designed to boost individuals' capacity to become senior managers. In addition, OSHA is setting up a management development program to train lower-level employees who aspire to the management ranks.

OSHA also is revamping training for compliance officers. Historically, they were taught strictly how to cite violations of standards. But now they also are taught how to evaluate workplace safety and health programs so they can help employers improve their performance. Better employer performance means better OSHA performance, since one of the agency's strategic goals is to reduce workplace injuries and illnesses.

On a parallel front, OSHA has devoted renewed attention to the performance appraisal process. A 1998 employee survey found that staffers were frustrated because appraisals weren't always done on time. The survey also detected that staffers felt awards didn't always go to the most deserving people and problem employees were not always disciplined. Last year, OSHA managers worked hard to get appraisals done by the deadline, Jeffress says. They also strived to give honest feedback-positive or negative. From now on, each December, OSHA will publish internally a list of which employees received awards and for what contributions so other staffers and managers can see what sort of performance warrants extra recognition, Jeffress says.

On the financial management front, progress is somewhat slower but nevertheless positive. In late 1999, OSHA became the first Labor Department agency to implement the department's new cost-accounting system. Jeffress says he expects it will take a year for OSHA to fully test the system and decide what specific activities should be tracked, but he's committed to making the process a success. It's important to know how OSHA spends its time and money to achieve results, he says.

Revamping Reinvention

OSHA also appears to have rebounded from a serious blow to its results-oriented reinvention plan. In April 1999, the District of Columbia federal appeals court struck down the Cooperative Compliance Program (CCP), an enforcement strategy that was the cornerstone of OSHA's reinvention effort. The program targeted employers whose work sites posted high injury and illness rates. OSHA gave these employers a choice between partnering with the agency to identify and correct hazards, or being put on a priority inspection list and potentially facing citations and fines. Companies that chose partnership had to exceed existing requirements by doing such things as creating formal safety and health programs. Piloted in Maine in 1993, the program was lauded by labor groups and many of the state's businesses. Vice President Al Gore's National Performance Review even gave the program a Hammer award.

But as OSHA started rolling out the program in other states, ultimately launching it nationally in November 1997, powerful Washington business lobbies cried foul. Led by the U.S. Chamber of Commerce, a coalition of employer groups sued OSHA, declaring that the CCP coerced employers to participate and therefore constituted a de facto regulation that hadn't gone through the public rule-making process. The court agreed. The CCP was "the practical equivalent of a rule that obliges an employer to comply or to suffer the consequences," wrote Judge Douglas Ginsburg.

OSHA did not appeal the decision. Instead, the agency put in place a two-pronged enforcement strategy designed to yield the same overall impact as the
CCP: focus OSHA's limited resources on the most dangerous work sites, and encourage better safety and health performance among employers.

Using injury and illness data collected directly from 80,000 employers in high-hazard industries-an effort begun in 1998 to help OSHA meet 1993 Government Performance and Results Act performance measurement mandates-the agency in 1999 selected 2,200 of the most dangerous sites for surprise inspections. All targeted work sites had lost-workday injury and illness rates-measures of lost work time caused by occupational injuries and illnesses-above 16 for the year. The national average for private industry is about three. Inspections triggered by the approach were four times more likely to uncover the most serious violations than all complaint-triggered and other inspections combined, Jeffress says. "That told me we were doing the right thing."

Using the same data, OSHA identified the 12,500 employers who had a lost-workday rate of eight or higher and, in April 1999, sent letters urging them to take safety and health matters more seriously. "I am writing you both to indicate my concern about the high lost-workday injury and illness rate at your establishment and to identify ways that you can obtain assistance in addressing the hazards in your workplace," Jeffress wrote. "You may wish to consider hiring an outside safety and health consultant, talking with your insurance carrier, or contacting the workers' compensation agency in your state for advice." The letter also reminded employers, "that an OSHA inspection may still occur whether or not you use a consultant to assist with your program."

To further boost safety and health awareness, Jeffress has directed each of OSHA's 67 area offices to create a cooperative program with employers and union groups. For example, OSHA is working with a union group called the Laborers Cooperative Trust and contractors in West Virginia to improve the safety of bridge construction work sites. Contractors meeting certain criteria-such as using a well-trained workforce and having a safety and health program-will be declared SAFE SITEs. The union will collect injury and illness data from each SAFE SITE and share it with OSHA staffers, who will inspect 5 percent of the sites to ensure compliance with the criteria. OSHA intends that the SAFE SITEs will become models for safety and health performance in the bridge construction industry. Jeffress is encouraged by the feedback from employers and workers he's had on SAFE SITE and similar programs nationwide. "The response has been terrific," he says.

Measuring Performance

Another significant achievement of the last year is the launching of the OSHA Performance Tracking and Management System (OPTMS) that tracks monthly indicators to measure OSHA's progress on meeting its strategic goals. Although the system still is in a testing phase, its potential appears to be great. "It's a huge deal," Jeffress says. Indeed, the system for the first time allows OSHA to track elements such as the number of inspections planned and conducted, the number of settlement agreements that include creation of safety and health programs, and the number of consultation visits at sites with serious hazards. The system also draws on inspection and penalty data-previously the only enforcement data OSHA tracked-that has long been available through another computer system. Ultimately, OPTMS also will allow OSHA to analyze injury and illness data gathered by the Bureau of Labor Statistics in its annual occupational safety and health survey, which is OSHA's primary source of long-term safety and health trend data.

Even while OSHA appears increasingly well-positioned to measure and track its performance, Jeffress remains concerned that Congress' annual budget cycle may not recognize the constraints in collecting critical data. OSHA is trying to measure its impact on the occurrence of injuries and illnesses, but because the data to do that is available only via the BLS survey-which is conducted following the year of study and takes several months to administer and analyze-the data comes in with a one- to two-year lag time. "That will be very frustrating for Congress," which will want to see what OSHA achieved for its budget in the previous year, Jeffress says. "I hope the political system has the patience to see whether we get long-term results from these [efforts] and doesn't expect instant results."GPP report card

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1999 GPP story about OSHA

OSHA's 1999 Report Card

Financial Management	B
Human Resources	C
Information Technology/Capital Management	B
Managing for Results	C
Agency Grade	B-

A Year Later

Thumbs Up

Launched development programs to cultivate leaders and improve management skills
First Labor Department agency to implement a new cost-accounting system
After court decision, developed alternative plan to target inspections at work sites with the highest injury and illness rates; urged employers with slightly lower, but excessively high, rates to hire a consultant or get free advice from state governments to improve safety records.

Thumbs Down

Lost critical court battle on the Cooperative Compliance Program.

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Feeling the Byte

Susannah Zak Figura — Tue, 01 Feb 2000 00:00:00 -0500

sfigura@govexec.com

few years from now-five, maybe 10-Americans will not only buy books, clothes, cars and just about anything else via the Internet, but also will pay telephone, utility, mortgage and other bills electronically. They'll even receive bank statements and Social Security checks over the Internet. In the process, they and the companies and government agencies serving them will save billions of dollars in postage costs.

If projections hold true, by 2005, the telecommunications industry alone will save $23 billion on billing and customer-care costs by shifting from paper billing and telephone-oriented customer service to Web-based and e-mail services, according to research by Killen & Associates, a Palo Alto, Calif., consulting company specializing in electronic billing and payment. The federal government, too, stands to reap considerable savings when documents such as benefit checks and tax forms routinely are transmitted and received online rather than through the U.S. mail.

At present, very little government-to-citizen communication occurs electronically, and only about 1 percent of private-sector bills, payments and statements are sent via the Internet. But it's only a matter of time before that changes, experts say. U.S. Postal Service officials, who oversee the delivery of 3.4 billion pieces of mail each week, fear such changes could cripple their agency. Indeed, Postmaster General William Henderson told a House subcommittee in October that "well-funded and highly motivated forces in the banking, telecommunications and computer industries are building e-payment networks. . . . The result could be erosion of our total revenues. We believe nearly $17 billion [per year] is at risk."

That represents nearly a third of the agency's $63 billion annual revenue-a large chunk of change for any agency, but especially one that is self-funded, as USPS has been since 1970. It's a looming problem that Rep. John McHugh, R-N.Y., chairman of the postal subcommittee, is watching closely. Unless that revenue can be somehow replaced, in the future Americans may see their local mail carrier fewer days each week, have fewer post offices, pay higher postage costs and contribute part of their taxes once again to subsidize postal operations. "Unless the Postal Service can adapt to a rapidly changing communications environment of growing competition," McHugh says, "we are facing a major crisis in the postal sector."

E-mergency

At the October hearing before McHugh's subcommittee, Bernard Ungar, director of government business operations issues for the General Accounting Office, outlined the problem. Citing Postal Service projections, Ungar noted that First Class mail is expected to grow at an annual rate of 1.8 percent from 1999 to 2002. But at that point, postal officials anticipate electronic communications will begin to cause drops of 2.5 percent yearly from 2003 to 2008. "Such a decline would be unprecedented in the service's history and would likely create financial and performance challenges," Ungar said. As bulk-mail advertisers move their business to the Internet, postal officials anticipate additional drops in revenue.

These declines are especially troubling to an agency that has just completed its fifth consecutive profitable year, after losses almost every year since its 1971 reorganization. In fiscal years 1995 through 1997, the Postal Service actually posted annual surpluses of more than a billion dollars. The money has been used to pay down debt accrued earlier.

Henderson isn't about to let the recent positive trend reverse without a fight. He's on a crusade to make USPS a key player in the e-commerce market-as shipper, electronic mail provider and guarantor of electronic communication privacy, all of which he considers natural extensions of traditional mail service.

"E-commerce is a passion of mine," Henderson said at the September 1999 National Postal Forum in Chicago. To him, e-commerce is both the biggest threat to his agency and its best hope for future success.

New Priority

In the early 1990s, under former Postmaster General Marvin Runyon, the Postal Service established a corporate goal of launching and growing new lines of business to make up for anticipated declines in revenue. Its projects have ranged from selling merchandise such as T-shirts and coffee mugs with stamp logos to providing a payment processing service, through a contractor, for American Express Co. Contractor REMITCO Management Corp. collected bill payments, processed and deposited checks, and transmitted remittance records to American Express.

Few of the projects have been profitable. In fact, a GAO review of new postal products published in November 1998 (GGD-99-15) found that only four of 19 new products available at the time had revenues greater than expenses during the first three quarters of fiscal 1998. The REMITCO service cost $8.6 million during that period, for example, but drew in only $2.3 million. Later, the service was dropped, and other projects either were scaled back or discontinued. In addition to financial pressures, the agency also faced considerable opposition to the non-postal projects from companies that argued USPS had no right to compete in areas unrelated to delivering the mail.

Though they've cut back on some business efforts, postal officials are far from giving up on developing e-commerce products. Soon after Henderson took the helm of the Postal Service in 1998, he created a new position of chief technology officer. Since then, he's also created vice president posts for such Internet-oriented services as
e-commerce and e-pay- ments. His goal is to explore and implement technological advancements to help the agency be more efficient and more competitive in the emerging electronic markets. In the process, he wants to make it as
easy as possible for customers to access postal products.

The Postal Service's most successful entry into the e-commerce world involves using its Priority Mail shipping and delivery service, which is designed primarily for First Class mail weighing more than 13 ounces, to facilitate online shopping. As purchases from Web businesses have grown, so have Priority Mail revenues-from $2.7 billion in fiscal 1994 to more than $4 billion in fiscal 1998. Robert Cohen, director of rates, analysis and planning for the Postal Rate Commission, calls Priority Mail the agency's "greatest single product success since reorganization." The commission oversees changes in postal rates, fees and mail classifications.

The Postal Service is required to deliver to every address in America every day, something other delivery companies don't have to do. USPS has been able to capitalize on its huge delivery infrastructure to charge less than competitors, such as United Parcel Service and Federal Express, for many deliveries. As a result, the Postal Service has captured a significant share of the e-commerce business-to-resident shipping market. A January 1999 study by Zona Research, a Redwood City, Calif., consulting company, found that the Postal Service delivered 32 percent of online purchases during the 1998 holiday mailing period. Aggressive marketing of Priority Mail, including such ventures as a recent joint advertising campaign with online bookseller Amazon.com, is helping to further boost business.

Postal officials are hoping to solidify and even expand their place in the e-commerce shipping realm by mastering the process of returning unwanted merchandise. About 25 percent of Internet purchases are returned, says Bob Krause, vice president of e-commerce for the Postal Service. In October, the Postal Service launched Returns@Ease, a series of services designed to simplify the return process. Sellers participating in Returns@Ease can allow purchasers to go to their Web sites if they want to return products and print out everything from Priority Mail return mailing labels to the actual postage necessary. Then they can leave the package at their home mailbox or any U.S. mailbox, rather than having to go to the post office to have the package weighed. "Since we're walking past that house every day, it makes sense that we'll be able to offer more opportunities" to return purchases more easily, says Kim Parks, manager of marketing and strategy for the Postal Service's expedited package service.

Postal officials have discussed the possibility of expanding the returns service. For example, if a retailer did not want to receive a product back-perhaps because the item was not selling well-the Postal Service might reroute the package to an online auctioneer who could sell the item, then send the proceeds to the retailer, Krause says.

Another postal e-commerce product is PC Postage, started last August. The service allows customers to buy stamps electronically and store them in electronic vaults attached to their computers. Users can choose any class of mail-First Class, Priority Mail, Parcel Post, etc.-and have the postage printed onto an envelope or label. Each time they send a letter or package, the amount of postage used is deducted from the vault. So far, two companies, E-Stamp and Stamps.Com, have been certified to offer the product. Users apply through these companies for Postal Service digital certificates confirming the user is who he or she claims to be. More than 300,000 certificates had been issued by the end of 1999.

A Matter of Trust

Priority Mail and electronic postage are helping to make the Postal Service a player in the e-business world. But Henderson and his team have grander goals. They want USPS to be the primary player in ensuring secure electronic message transmissions. "We don't believe it's about technology," says Krause, noting that many companies have the technology to enable private messaging. "We believe it's about trust. The consumers need to be able to rely on a trusted third party. That's us."

When a person puts a stamp on an envelope and drops it into a mailbox, he assumes that correspondence will arrive unopened and be delivered to the person to whom it is addressed, he says. At present, there is no such assurance for e-mail, Krause says.

Providing that security guarantee ultimately will be what turns the current 1 percent of people paying bills electronically into a majority, postal officials say. Their aim is to provide an electronic postmark that can be wrapped around e-mail or other electronic messages. The postmark would note the date and time sent and received, authenticate the identities of senders and receivers, and guarantee that the message had not been tampered with. In a related service, the agency also plans to offer secure electronic mailboxes that essentially will be confidential individual Web sites, where customers can view and pay bills and read other sensitive personal documents such as health records.

Why should the Postal Service play this role? For one, because it's a neutral government agency, says Stephen Kearney, the USPS vice president who oversees e-payments. Second, the Postal Service's 225-year-long history has established the agency as a trusted brand. In addition, USPS has a mandate to provide universal service, and, assuming the courts extend existing First Class mail authority to the electronic realm, they have the force of the Postal Inspection Service to investigate fraud and U.S. attorneys to prosecute it. Private entities can't offer that extra assurance, Kearney says. "We want to create a system that binds the country together and facilitates commerce. We are a unique third party" that can do that, he says.

USPS is now testing the concept on a pilot basis with PosteCS, an international, Internet-based service operated jointly with Canada Post and France's La Poste. The service guarantees confidentiality for electronic transmissions through an electronic postmark, tracking and tracing, proof of delivery, and sender and receiver authentification. Another pilot project with the Treasury Department is using an electronic postmark to guarantee the security of electronic payments of government vendors, Kearney says.

Since the need for revenue is driving these new services, customers will pay a price for them. Exactly how the pricing will be structured will depend on customer wishes, Kearney says. There may be a charge per message or a monthly flat fee. Or basic non-secure e-mail may be provided for free, with an extra charge added for any postmark, he says.

Critics' Complaints

There are, of course, critics of the Postal Service's e-commerce endeavors. Some competitors insist the concerns about First Class mail declines are overblown. The Main Street Coalition for Postal Fairness, a group consisting of the Newspaper Association of America, the Greeting Card Association, the American Bankers Association and others, sent a letter to Congress in November blasting the Postal Service's numbers. The $17 billion loss projection doesn't reflect the fact that when revenue drops, so do costs, the group noted. "In addition, there is no recognition of increased Postal Service volume and revenue from Priority Mail and Parcel Post resulting directly from e-commerce." The group also noted that there was similar concern in the 1980s that widespread use of faxes and lower telephone costs would cut into First Class revenues, but letter volume actually grew.

"It's really speculation," agrees the Postal Rate Commission's Cohen. "We're in an area that nobody knows anything about. The future is uncertain." Postal officials concede there's no way of knowing for sure exactly when First Class mail will drop off. But they insist that significant declines are inevitable in the long term. They want to position themselves to survive and even thrive, regardless of when that happens.

Competitors-especially delivery companies-also complain that the Postal Service has an unfair competitive advantage over private companies. Because of its government status, the agency doesn't have to pay taxes or even parking tickets, they note. True, Krause says, but the few million dollars those advantages save the agency each year are more than offset by the billions of dollars it spends to provide universal mail service, something not demanded of delivery companies.

McHugh has been leading an effort to level the competitive playing field between the Postal Service and private companies with his Postal Reorganization Act, which passed his subcommittee in April 1999. His bill would create a for-profit U.S. Postal Service Corporation, through which all competitive services and products would have to be sold. The corporation would be subject to the same rules as private companies. In addition, the agency would be granted more flexibility to set its rates, which now are largely controlled by the Postal Rate Commission. Strong opposition to various specifics in the bill likely will prevent its passage, observers say. But all sides agree some reforms are needed, suggesting that the debate will continue.

Proper Role?

Regarding electronic messaging, skeptics insist that private companies already are providing efficient and secure services, negating a need for Postal Service involvement. Many consumers feel comfortable buying merchandise with a credit card via the Internet and soon will adapt to electronic bill paying, they say. And companies such as Yahoo.com already provide well-encrypted electronic bill-paying services. "I can't see the Postal Service doing this faster or cheaper," says one agency observer, adding, "If the need goes away, then the institution should go away." Indeed, these arguments have triggered a public policy debate about "whether the service should be limited to offering traditional postal services and wind down its operations as its core business declines," the GAO's Ungar told Congress in October.

Kearney, however, insists people are seeking a trusted third party to stand behind electronic communications. If the public is so comfortable with the idea of conducting business online, he asks, then why do only about 1 percent of bills get processed electronically? In his view, many Internet users still draw a line between purchasing a book online and sending or receiving sensitive financial or medical documents. Once they have a government-guaranteed security backing those transmissions, he believes, they'll be more likely to use and benefit from the services. "We feel we have an obligation to give it a shot," Kearney says. "The marketplace will decide if it wants or needs us in that role."

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Danger Zone

Susannah Zak Figura — Mon, 01 Nov 1999 00:00:00 -0500

or the National Oceanic and Atmospheric Administration, the trouble started last January, when the first components of a new supercomputer designed for advanced weather forecasting arrived at Federal Office Building 4 on the Suitland, Md., federal campus. The new computer system, which was heavier than the old one, caused the floor to buckle, exposing asbestos that had been safely sealed away for decades. Not long after that, NOAA discovered loose asbestos in the air handling system-triggering concerns that unsuspecting employees might have inhaled some of the toxic particles.

Problems continued to escalate. By March, tests of the building's water supply found traces of lead, copper and coliform bacteria. "The magnitude of what just kept happening was overwhelming," recalls Scott Gudes, deputy undersecretary at NOAA.

Sharing Building 4, as well as occupying three other buildings on the Suitland campus, the Census Bureau has faced similar problems over the years. When Census officials learned about the latest water problems, they immediately ordered tests in the rest of their buildings; all had contaminated water. Now signs are posted above the water fountains directing employees to drink bottled water, and signs in the bathrooms read: "WATER SAMPLING IN PROGRESS. DO NOT USE THE WATER FOR CONSUMPTION."

As they have for years, Suitland employees also struggle with regular indoor flooding caused by leaky pipes. During a two-month period last summer, Census experienced 125 leaks, one of which flooded the offices of Director Kenneth Prewitt and Deputy Director and Chief Executive Officer William Barron, soaking the carpets and triggering health concerns. "The conditions out here are really deplorable," says Barron, who plans to have the antiquated air conditioning system that is responsible for most of the leaks tested for Legionnaires' disease. The conditions have hurt morale and productivity, he says.

The General Services Administration, which controls about 40 percent of federal office space, is the landlord at Suitland. GSA officials insist the problems there are unusual at federal buildings. Still, they admit that conditions at many facilities are far from ideal. "The average age of our owned buildings is 55 years, far above the private-sector average" of 22 years, GSA Administrator David Barram told a House Appropriations subcommittee in March. "We have many old buildings that have never had a total rehabilitation, many that have totally obsolete heating/air conditioning systems and utility connections and can't support 21st century operations, and some that need seismic upgrades to remain occupiable."

The General Accounting Office last published a report on the condition of federal buildings back in 1991, declaring that "federal buildings have been neglected and now need major repairs and alterations to bring them up to acceptable quality and health and safety standards." The most recent comprehensive look at the issue, done by the National Research Council in 1998, found that little had changed since GAO's review. The "physical condition of the federal facilities portfolio continues to deteriorate, and many federal buildings require major repairs to bring them up to acceptable quality, health and safety standards," concluded the "Stewardship of Federal Facilities" report, which looked at all federal property, not just that owned by GSA.

As the inventory continues to age, problems could get significantly worse-something that concerns the House Transportation and Infrastructure subcommittee that oversees public buildings. In August, the Subcommittee on Economic Development, Public Buildings, Hazardous Materials and Pipeline Transportation asked GAO to revisit the issue. GAO is expected to testify on the matter at a March 2000 hearing, with its final report due in May, according to a House staffer.

Suitland's Saga

The Suitland campus has struggled with water leaks, water quality and electrical outages for years. But late last year, the conditions started getting more visibility within Congress and GSA after a controversy arose between the campus and the community. Locals had complained for some time that the barbed-wire fence rimming the 480-acre campus made the facility look like a prison and gave a generally unsavory feel to the area. Responding to these concerns, a Maryland senator, Democrat Barbara Mikulski, slipped an extra $1.1 million into GSA's fiscal 1999 appropriations bill to replace the fence. Then in September 1998, frustrated representatives from the American Federation of Government Employees invited Mikulski to Suitland to see the conditions. Their goal was to show Mikulski that the site had far more pressing needs than a cosmetic fence change, says Avis Buchanan, president of AFGE Local 2782, which represents about 4,000 Census employees at Suitland.

Not long after that, NOAA's problems in Building 4 erupted, halting the installation of the supercomputer. Because NOAA needed to have the system operational by this fall-or else be forced to continue spending more than $300,000 a month on expensive contracts for older computers-the need for repairs became urgent. Well aware of the generally poor conditions, NOAA hadn't wanted to put the computer in Building 4 in the first place, Gudes says. But Congress had denied funding to construct a new building for the weather prediction center.

By the time fiscal 2000 appropriations bills were being debated earlier this year, there was bipartisan support for ordering GSA to find long-term solutions for Suitland. Among those supporters was Rep. Steny Hoyer, D-Md., who had visited the campus a number of times, including a day when the temperature was more than 90 degrees and the air conditioning system wasn't working, says Hoyer spokeswoman Debra DeShong. Though they were still pending at press time, both the House and Senate versions of GSA's fiscal 2000 appropriations bills order the agency to do a study within 60 days of enactment detailing the safety and health problems faced by Census employees and to develop a plan for modernizing facilities.

For NOAA, whose funding bill also was pending, the Senate approved $10 million to help the agency improve conditions for its satellite service operations, which along with the weather center have been located in Building 4. The Senate language directs NOAA officials to start the process of relocating the weather prediction center to "state-of-the-art facilities more commensurate with their vital national mission." At press time, the supercomputer was being installed in a 2-year-old building in Bowie, Md., that also houses Census mainframes and servers.

GSA's Role

Despite the frustrations, everyone involved agrees that GSA staffers, who have offices on site, have responded to problems as they arose. For example, GSA is providing bottled water for campus staff until the water quality situation is sorted out. In Building 4, the landlord agency installed temporary ventilation units that draw in air directly from outside until they can make sure there is no more asbestos in the air-handling system. And GSA employees meet regularly with NOAA and Census staff to discuss the status of testing and remediation work.

"They're here," says Nancy Potok, principal associate director and chief financial officer at Census. "But the people who are here don't have the authority or money for a systematic approach to fixing the problems. GSA's approach has been a Band-Aid approach."

For their part, GSA officials say they are proud of the way they've handled the latest round of problems. "We think we jumped on it," says Robert Peck, commissioner of GSA's Public Buildings Service. "We've had these kinds of problems in buildings before. [At Suitland,] we shut off the water in two places where we felt like the water needed to be shut off, we flushed the lines, all the things that you're supposed to do. We really want to make sure the employees out there feel comfortable, that it's a safe place to work." GSA officials also note that back in 1993, they proposed a $58 million renovation of one Census building, but Census at the time was pushing for a new facility to be built above a nearby Metro station that was under construction. Ultimately, the agency lost its fight for a new facility and, in the process, forfeited the renovation funds.

Even as Peck boasts about GSA's performance, he freely acknowledges that the Suitland buildings are well past their peak. "Here's the bottom line," he says. "At Suitland, much to the credit of folks in GSA, I think, and to the credit of people in Commerce, the federal government took a bunch of what were supposed to be temporary World War II-vintage buildings, and we wrung every last penny's worth of value out of those suckers-probably more than the last penny.

"We now think it's time to bite the bullet and say Commerce has got fairly important functions out there. We owe them and the local community some kind of better buildings than what we've got. And so we're going to propose in the budget next year that we start designing new buildings at Suitland because our analysis shows it just isn't worth trying to renovate the buildings." Both Census and NOAA are Commerce Department agencies.

Whether or not Congress will approve the funding to rebuild the Suitland campus remains unclear. Even if congressional approval is forthcoming, Peck says construction wouldn't start before mid-fiscal 2002. "That would be quick," he adds. And then the buildings would have to be rebuilt one by one, a process that would take years.

Root Causes

While the Suitland buildings may be among the worst in the federal inventory, a lot of agencies are in antiquated buildings. Among GSA's "Gray Ladies," as they're known, are the Washington headquarters offices of GSA itself, Commerce, the Interior Department and the Office of Personnel Management.

Keeping the old building systems going comes at a high price. Interior's air conditioning system, for example, which also is supposed to cool the neighboring GSA building, is so inefficient that GSA had to install its own central air system, as well as window units, Peck says. In addition, because water isn't circulated and filtered as frequently in old systems as in new ones, bacteria can grow, potentially causing health problems. "When you know you have these kinds of things, you monitor and test like crazy," Peck says. "That's pretty expensive. You don't have to do it on more modern systems."

The reasons GSA hasn't kept up with major renovations have as much to do with politics as anything. "There is more interest, as there has been since the beginning of the republic, in building buildings than in maintaining them," Peck says. He equates the situation to the Defense Department's challenges in convincing the Office of Management and Budget and Congress that once a military has troops, it also must feed and train them. "If you buy so much equipment that you don't have the money to do that, then you have a serious problem," he says. "It's the same thing with us. There is sometimes more interest in the big new things than the old things."

GSA funds renovation work-which it categorizes as "repairs and alterations"-from the Federal Buildings Fund, created by Congress in 1972. The buildings fund law directed GSA to charge commercially equivalent rents to agencies that lease space and collect those rents in the fund, which is to be used to pay for repairs, alterations and operations costs. "The only money available to us to repair buildings is the money that's left over after we collect our revenues and pay out our obligations," Peck says. "In the past couple of years, we've had success in increasing the money we have on the bottom line. But Congress has to allow us to spend it. Even though we may generate more income, we may not get to spend it."

Adequate Funds

Congress' meddling in the fund is partly responsible for the declining state of many federal buildings. Over the years, legislators imposed a series of rent restrictions because of concern about such things as the growing budget deficit. In some cases-for example, the Woodrow Wilson International Center for Scholars in the Ronald Reagan Building and International Trade Center in Washington-Congress has ordered GSA to provide rent-free space. As a result, GSA ends up subsidizing some rents, ultimately taking from the fund millions of dollars that otherwise could be used to keep up with repairs.

GSA, though, also deserves some blame for failing to set at commercial levels the rents it could control. Before GSA revamped its leasing policy in 1996, "we were losing money on the half of our budget that's lease payments because of the bizarre bureaucratic way we were setting rents in leased buildings," Peck recalls. "We were in some cases 10 years behind the market. . . . We were signing new leases at higher rental rates and then GSA was basically subsidizing the federal tenants who were fortunate enough to be in those leases. That was money right off of our bottom line, which affected the health of the buildings fund."

The private-sector benchmark puts ideal repairs and alterations funding at about 2 percent to 4 percent of an inventory's total value each year. For GSA's approximately $30 billion inventory, "that suggests that we should be somewhere between $600 million and $1 billion," Peck says. In fact, in three of the past six years, the agency spent less than $600 million, and in the other three the amount hovered around $660 million. While these amounts are not enough to address every building that needs major renovation, Peck insists they are adequate for keeping up with "life safety" matters such as water quality and fire safety. "We think we've got mostly enough money to take care of those basic needs in our buildings," he says.

Going It Alone

The Federal Buildings Fund's underfunding has frustrated some agencies to no end, leading them to ask Congress for relief. The Agriculture Department, for example, sought and received special authority to retain $12 million in rent it would have paid to GSA from 1988 through 1991 to spend on repairing and replacing windows and elevators. And the Defense Department, after urging GSA for years to renovate the Pentagon and realizing that the buildings fund would never have the money to do the job, finally won congressional approval in 1990 to withdraw from the fund and assume control of the 1940s building itself.

During World War II, the Pentagon was thrown up in just 16 months, and because the nation was rationing supplies for the war effort, corners were proudly cut. President Franklin Roosevelt actually boasted that because builders had relied primarily on reinforced concrete to construct the five-sided giant, the government had saved enough steel to build a battleship. The shortcuts came back to haunt the Pentagon years later. By the early 1990s, the building had problems with power outages, asbestos, water leaks, cracked walls, and an ineffective heating and cooling system.

The Defense Department, which is funding the 12-year, $1.2 billion renovation project with rental fees paid by its tenants, has been "extremely satisfied" with its decision to withdraw from the Federal Buildings Fund, says DoD spokesman Glenn Flood. Major renovations since work began in 1994 include replacing the heating, ventilation and air conditioning system. The renovation project is still on schedule and expected to fall within cost estimates, Flood says.

This approach may be working for DoD-which as owner of 29 percent of federal real estate is an experienced property manager-but many agencies have neither the resources nor the desire to take control over maintaining their buildings. They just want their landlord to take care of things. Census and NOAA, for example, aren't looking to withdraw from the Federal Buildings Fund. They only want to get the Suitland problems sorted out and, preferably, new, better space provided for their employees and equipment.

Alternative Tools

Given the repairs needed at federal buildings across the country, the matter of how to fund necessary work has been debated for years. The essence of the problem is that major building repairs require long-term capital investment, something the current annual budget and appropriations process discourages. Under today's budget rules, capital improvements are treated like any other expense and therefore are usually avoided, even though the long-term financial payoff might be worthwhile. As a result, renovations go undone and problems stack up-until they reach the critical point that Suitland has reached.

Critics of the current system, including the General Accounting Office, believe the government should create a separate capital budget to fund long-term capital improvement projects. But with the short-term focus of legislators, there's almost no chance of that becoming a reality, Peck and congressional sources say.

Other funding mechanisms are available, however. In April, the House Government Reform Subcommittee on Government Management, Information and Technology held a hearing to discuss how public-private partnerships could help. These partnerships-which some agencies have tried via special legislative authority-are especially useful when the government no longer needs a property but cannot sell it because of historical, environmental or other concerns.

In Galveston, Texas, GSA formed a partnership with the local historic preservation foundation to upgrade a historic building once used by the Customs Service. The 1930s building, which was costing GSA $100,000 a year in basic upkeep, needed $1 million in renovations. But "it made no sense for us to put a million dollars into that building," which Customs no longer needed, Peck says. So the local historic foundation put up the money and now rents the building from GSA for $1,000 a year. "It's a good deal for them, and a fine deal for us too," he adds.

In a similar arrangement, GSA has leased the old U.S. Tariff Commission building in Washington to a hotel developer. The layout of the building isn't appropriate for the typical modern office configuration of cubicles, Peck notes, but is ideal for hotel rooms. The location is near a major concert and sports venue as well as restaurants and theaters, also important for a hotel. "The government holds too much real estate," Peck says. "Where we decide we're going to keep a historic federal building [in the active inventory], we want it to be a high-quality federal building" that meets today's government office needs. Peck also would like the authority to tap private banks to help finance repairs and alterations. "If I were a private-sector organization, I would go to the private market-to the bank-and say, 'If you lend me $70 million, I will fix up this building and have a guaranteed income stream from a government tenant for 30 years. Will you give me a favorable loan rate?' They would say, 'How fast can you [fill out] a loan application?' "

GSA officials also would like agencies to be allowed to keep the proceeds of any property they do sell, to increase the incentive to discard unneeded space whose upkeep puts added pressure on already limited funds. Property sales proceeds generally go into the Interior Department's Land and Water Conservation Fund, which is used for buying land and water areas for outdoor recreational use.

Peck, who spent a number of years as a Senate aide, is too experienced in the political process to be overly optimistic that he'll get all these new authorities. "Do I wish I had those tools available? Yes," he says. "Have I talked to OMB about it? Yes. Will I get it? I don't know." But if he does, Peck believes, "I think we could see some of these renovations happen quickly."

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Power Shift

Susannah Zak Figura — Mon, 01 Nov 1999 00:00:00 -0500

n May 1995, about a week after telling his supervisor that he was HIV positive, Veterans Affairs Department medical clerk Carl Mack was fired. VA managers claimed he had abused his leave privileges. But Mack protested and filed a discrimination claim. For the next two and a half years, while the case worked its way through the cumbersome federal equal employment opportunity complaint process, the unemployed Mack fell on exceedingly hard times. He lost his home and cars, began using drugs and became estranged from the daughter who had lived with him prior to his downfall.

When Mack's case finally reached an Equal Employment Opportunity Commission administrative judge for a hearing, his life began turning around. Administrative Judge Marlin Schreffler ruled that the VA had discriminated against Mack because of his HIV-positive status, and ordered the agency to pay him $185,000 in compensatory damages, as well as back pay, and to reinstate him.

In his decision, Schreffler wrote that Mack "suffered significant depression, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life with profound adverse impact on his health. Indeed, except for suicide, it is hard to imagine a more devastating impact that discrimination could have upon an individual. . . . Complainant lost all that he held valuable. . . . The evidence establishes that complainant's problems following his discharge were directly related to and caused by his unlawful termination."

But that wasn't the end of Mack's quest for justice, because under regulations then in effect, the VA didn't have to accept the judge's decision. While VA officials didn't dispute the judge's factual findings, they reduced the damage award to $15,000, says Joe Henderson, supervisory attorney at the American Federation of Government Employees' Fair Practices Department, who represents Mack. So Mack has returned to the EEOC to challenge the VA's action. But with nearly 11,000 appeals pending at the commission, final resolution could still be some time in coming.

From now on, though, the VA and other agencies won't have the option of simply overturning EEOC decisions. In July, the EEOC issued new regulations governing the federal complaint process that make the decisions of EEOC administrative judges final. Agencies will have to appeal to the EEOC to challenge the rulings. The change represents a considerable shift of control from agencies to the EEOC, something not all agency EEO officials are pleased about.

That shift in power is just one part of an overall strategy EEOC unveiled in the new regulations to streamline the federal complaint process. All parties agree the process takes too long. In fact, it takes nearly five times as long-from initial filing to completion of appeal-to resolve a federal case as it does a private-sector case, notes EEOC Chairwoman Ida Castro. The parallel systems are governed by different regulations that have evolved over more than 30 years. For example, in federal cases, agencies conduct any necessary investigations, while in private sector cases, the EEOC as an independent third party does the job. "The inequities [between the systems] are flagrant," Castro says.

Those inequities have bred a culture of distrust between federal workers and managers. Many employees feel agencies exploit the system by contributing to the delays and often spurning administrative judge decisions. Managers, meanwhile, are frustrated by the excessive number of complaints, some of which they insist have no real grounding in discrimination. The EEOC tried to address both sides' concerns in the new regulations. "We are looking to create a fair and efficient process," Castro says.

Need for Change

The federal EEO process long has been ripe for revision. The system has become so clogged with complaints in recent years that the time taken to process each one has skyrocketed. In fiscal 1998, the typical case took almost 1,200 days-more than three years-to work its way from the initial filing through hearing and appeal. That was three months longer than the previous year, the General Accounting Office noted in an August 1999 review of the federal complaint system (GGD-99-128). The increasing delays have been caused by ever-rising caseloads. Despite the fact that in recent years agencies have cut more than 300,000 jobs, complaints filed with agencies increased nearly 60 percent from 1991 to 1998. Requests for hearings before EEOC judges jumped 112 percent, while appeals to the commission of final agency decisions rose 61 percent.

These increases, GAO pointed out, are due to a number of factors. The 1990 Americans with Disabilities Act, for example, strengthened existing federal employee discrimination protections and boosted awareness of them. In addition, the 1991 Civil Rights Act gave federal employees the right to win damage awards of up to $300,000 in discrimination cases, motivating more employees to file charges. On top of that, the Clinton administration's downsizing effort led many employees to challenge their dismissals and job reassignments by claiming discrimination.

Even with significantly increased productivity, the EEOC-which had an annual budget in 1999 of $279 million-simply hasn't been able to keep up. From 1991 to 1998, the number of hearing requests each judge processed and closed jumped from 95 to 135. During the same period, appeals of agency final decisions processed and closed per attorney rose from an average of 133 cases to 192. But the caseload is rising too rapidly for the commission to seriously attack the backlog, Castro says. "We have a workload right now that's pretty much unbearable."

Revising Rules

Under the old process, which will cease on Nov. 9 when the new regulations take effect, employees alleging discrimination have had to navigate a procedural labyrinth. The first step is to contact an agency EEO counselor, whose job it is to advise employees on their rights and propose ways to resolve a problem before it reaches the level of a formal complaint. If there is no resolution, the employee may file a complaint with the agency. Those whose complaints are rejected by the agency may appeal to the EEOC. Accepted complaints, however, enter an investigation phase, which by regulation should take no longer than 180 days but often extends longer.

Once an investigation is completed, employees must request either an immediate final agency decision or a hearing before an EEOC administrative judge, who later issues a ruling-with remedies, if appropriate. That ruling then goes back to the agency, which makes its final decision on the case. In effect, the hearing before the EEOC judge is part of the investigation phase, and agencies have had the option to accept, reject or modify judges' decisions. Employees may appeal final agency decisions back to the EEOC or file suit in U.S. District Court.

Under the new rules, agencies will have to make available alternative dispute resolution (ADR) services such as mediation during both the pre-complaint and complaint stages. Now, employees alleging discrimination will be able to choose ADR or counseling in the initial stage. The goal is to weed out early as many cases as possible so that the formal EEO process can focus on the most serious claims.

Cases that are not resolved through ADR will proceed to the investigation phase. If investigations have not been completed in the allowed 180 days, cases will be elevated automatically to the next stage, enabling complainants to request an administrative judge hearing and preventing further delays. Judges' decisions no longer will be merely "recommended," meaning that agencies won't be able to modify them. Agencies that disagree with a judge's ruling will have to appeal to the EEOC. And if the judge's decision includes an order for job reinstatement, agencies must rehire the employee pending appeal, something they were not required to do before.

On the other hand, to keep agencies and the EEOC from having to deal with unwarranted cases, the new regulations allow agencies and administrative judges to dismiss complaints resulting from "a clear pattern of misuse of the EEO process for a purpose other than the prevention and elimination of employment discrimination." They also have the discretion to dismiss spin-off complaints triggered when processing deadlines are missed. EEOC's Office of Federal Operations estimates that 6,000 spin-off complaints are filed each year.

Opposing Views

Of the changes, the most significant-and controversial-is the new power of administrative judges to issue final decisions. Employee representatives view the revision as a long-overdue leveling of the playing field. They argue it's simply unfair that agencies have been able to reverse independent judges' decisions. From fiscal 1996 to fiscal 1998, agencies rejected about two-thirds of EEOC administrative judge decisions against them, according to the commission.

While some agencies accept virtually every decision, others seem to have an unwritten policy that all judge decisions are to be rejected, observers note. One agency EEO attorney says her recommendations to accept decisions often are overturned by the department's general counsel's office. They want to win the case at any cost so they won't be labeled a discriminating organization, she says. Agencies also reject judges' opinions to protect their managers, adds David Orr, associate director for human resources at the Court Services and Offender Supervision Agency, a recently created independent executive branch agency. "You kind of take [a decision against them] personally."

During the two-year rulemaking process, many agency officials opposed giving administrative judges final authority "in the strongest way," recalls Luther Santiful, president of the Council of Federal EEO and Civil Rights Executives, which represents EEO officials at 52 agencies. The change penalizes all agencies, but "not all agencies are bad," he says. Though Santiful says his members will faithfully implement the regulations now that they are final, the EEOC's arguments supporting the revision didn't change his mind. "Agency heads ought to be responsible for making final decisions," he says.

Many administration officials voiced strong opposition during the rulemaking period. Kay Frances Dolan, Treasury Department deputy assistant secretary for human resources, referred to the provision as "significant and troubling" in her April 1998 comments on the proposed rule. Dolan also said she believed the change would violate statutory law, which says that agencies-not administrative judges-have authority to take "final action" on discrimination complaints. The Justice Department and several other major agencies made similar arguments.

The Postal Service, which accounts for almost half of all federal EEO complaints, questioned whether administrative judges were even up to the task. The "inconsistency in the quality of the findings of administrative judges is a matter of significant concern," said Peter Garwood, Postal Service manager of EEO compliance and appeals. "The Postal Service's experience over several years has been that it is sustained by the Office of Federal Operations [on appeal] with some frequency when it rejects the recommended findings of the administrative judge."

But the EEOC wasn't swayed and stood behind the quality of its judges. After reviewing appeals data, the commission found that the "EEOC upholds administrative judges' decisions in a significant majority of all cases," the final rule says. To the EEOC, the final decision provision is a cornerstone of the revisions. "The commission strongly believes that allowing agencies to reject or modify an administrative judge's findings of fact and conclusions of law leads to an unavoidable conflict of interest and creates a perception of unfairness in the federal EEO system," the rule states.

Clearly, the reason for agencies' opposition is that they "are losing a lot of power," says Bill Bransford, federal employment attorney with the Washington law firm Shaw, Bransford, Veilleux & Roth. "I think because of their behavior in some agencies, they deserve to," he adds. "They were rejecting a lot of reasonable decisions."

Castro, however, characterizes the rule differently. "I certainly don't see it as overtaking any particular power from any particular agencies," she says. "There is no transfer of power." What the changes do, she insists, is force all parties to adhere more closely to the existing regulatory time lines so that cases can be processed faster. "It forces us all to deal with [each case] and move forward."

Broader Efforts

To complement the revised regulations, Castro announced in August a Comprehensive Enforcement Program that has been well received even by critics of the regulations. As part of the effort, EEOC and the National Partnership for Reinventing Government have formed a task force that will examine various aspects of the federal complaint process. For example, a data collection team will focus on improving the accuracy and relevancy of EEOC data, which GAO harshly criticized in June for its unreliability (GGD-99-75). With better data, the EEOC will be able to better help agencies prevent problems, Castro says.

Two other teams will focus on how to resolve disputes early in the process, as well as prevent them in the first place. And a best-practices team will help disseminate good ideas from individual agencies throughout government. The EEOC also plans to do more on-site reviews to help agencies improve their EEO programs, and beginning this month will host a series of seminars on the new regulations around the country (see the EEOC's web site at www.eeoc.gov for dates and locations).

In Castro's view, any impact the commission can have on reducing caseloads at agencies-whether via the new regulations or technical assistance-will benefit the EEOC. "I understand that my backlog has a direct relationship to whatever happens at the agency level," she says. "I encourage all the senior management throughout all the federal agencies to work with me and my staff so we can achieve success. It will only happen if we have a partnership."

Ultimately, the success of Castro's efforts will depend on several factors outside her control. First, Congress will have to appropriate enough money for the EEOC to tackle its backlog of federal hearings and appeals, which totaled nearly 23,000 in fiscal 1998. The administration requested $312 million for fiscal 2000, but as of early October it was still unclear whether the request would be granted. Second, agencies will have to fully implement the new regulations and commit themselves at the highest levels to making ADR work.

And Orr believes agencies also must go one step further to address the root causes of EEO complaints. Agencies will never prevent discrimination-perceived or real-in the federal workplace unless they focus more attention on diversifying their management ranks, he says. "Until [employees] look at their senior managers and see the same kinds of faces, I think we're going to see these problems. The good news is we're moving in the right direction. The bad news is we're moving a bit too slowly."

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Leadership Void

Susannah Zak Figura — Wed, 01 Sep 1999 00:00:00 -0400

icture the scene: A canoe filled with unsuspecting paddlers drifts down a river. Flowing water gurgles past; trees cast shade from the river's edge. Up ahead, just where the river is about to plunge over a rocky ledge and become a dangerous waterfall, a sign reads, "Human Capital Falls Ahead. Use Caution." This image, drawn in magic marker on a big white presentation board in the office of Michael Brostek, associate director for federal management and workforce issues at the General Accounting Office, would be amusing if it weren't so serious.

As Brostek and human resources experts across government know, federal agencies historically have paid precious little attention to personnel issues. Congress in recent years has passed a series of laws forcing agencies to plan strategically for their information technology, financial management and other management needs. Although some of these laws touch on the issue of human resources, none directly focuses on it. As a result, "there's a gap," says Stephen Altman, GAO's assistant director for federal management and workforce issues. "Human capital--the area where agencies invest the lion's share of their budgets--hasn't been addressed in any comprehensive way."

Compounding the problem are a number of demographic and market trends. Perhaps most significant, the aging baby boomers--those born between 1946 and 1964--who now hold key management positions in agencies will be taking vast amounts of expertise from government when they begin retiring in 2001, the year the first of them become eligible for early retirement. At the same time, with the average GS-15 employee nearly 51 years old and the average GS-14 employee nearly 48, these people, too, will soon be eligible for early retirement, potentially leaving gaping holes in the ranks of qualified talent to promote into the Senior Executive Service. Although not all those eligible will take early retirement, agency officials must be prepared for a substantial exodus.

Replenishing the leadership pipeline won't be easy. Because birth rates in the late 1960s and 1970s were relatively low compared with the baby boomer rates--14.8 births per 1,000 people in 1973, for example, compared with 25.3 in 1954--there's a smaller pool of younger talent available to succeed GS-level retirees. Further complicating the matter is today's highly competitive labor market, which is making it harder than ever for agencies to attract and keep good candidates for government jobs that often pay less than private-sector ones. Several senior officials interviewed by Government Executive predict that a failure to overcome these challenges by aggressively recruiting and cultivating future leaders could become a crisis of major proportions in the early years of the 21st century.

Downsizing's Downfall

Today's average federal worker is older, better-paid, better-educated and more highly skilled than ever before. He or she also works in an environment that, after the elimination of more than 366,000 positions in the past six years, has never been less stable. True, only about 30,000 people have been let go via reductions in force. But many who chose not to accept buyouts and were not ready to retire were shuffled out of their eliminated jobs and reassigned to positions they may not have wanted or been especially well-suited for. Most observers agree that the government needed some trimming, especially in the administrative area. But they now lament that cuts were made without regard for the future health of the workforce.

"There was plenty of room for downsizing," says Rosslyn Kleeman, distinguished executive-in-residence in George Washington University's Department of Public Administration and former director of workforce issues at GAO. "But it was just done so poorly. It was done without any workforce planning, so I think we lost many of the people in their mid-careers who were still fresh and good, and we left a lot of the old timers who were close to retirement and have calendars on their walls counting off the days until they can retire. Agencies could have done a much better job [of] workforce planning instead of just saying, 'Anybody who wants to take advantage of buyouts, just go ahead.' "

During the years of heavy downsizing, intern programs and recruiting all but stopped, notes Ray Sumser, a senior human resources management consultant at the National Academy of Public Administration. Many va-cant lower-level jobs--in the GS-5, GS-7 and GS-9 ranks--were filled with internal candidates. The good news is that, compared with the number of positions cut, relatively few people were involuntarily let go, he says. "The other side of the story is the skills imbalance and the older workforce and the no fresh intake--no seed corn."

Pipeline Problems

The net effect of downsizing has been pressure on the pipeline of future leaders, which threatens to create big problems as greater numbers of top managers retire. At the Commerce Department, for example, within three years, 59 percent of SES members will be eligible to retire, and within seven years, 84 percent will be eligible, says Debra Tomchek, director of human resources management at Commerce. They will take with them not only leadership experience but also critical technical skills. Unless the agency puts in place a replacement strategy, "we're going to have a crisis at the top," she says.

At the Treasury Department, too, a large percentage of senior leaders are eligible to retire, says Kay Frances Dolan, the department's deputy assistant secretary for human resources. In addition, because of lower birth rates, the number of Treasury employees aged 35 to 44 will drop by about 15 percent in the next few years, so there will be fewer people to groom for leadership roles. "And all this is happening at the same time top talent is in increasing demand nationwide," says Dolan.

With the daily work of government ever more dependent on information technology, the IT pipeline is especially worrying to some. "The Treasury Depart-ment is approaching a crisis in information technology skills," concluded James Flyzik, Treasury's chief information officer, in a February report to former Secretary Robert Rubin. Flyzik noted that "this is a highly experienced workforce, which is moving in great numbers toward retirement eligibility." He argued that the department needed to quickly undertake a "coordinated and comprehensive effort" to recruit, retain and develop employees.

Agencies already have suffered the repercussions of failing to plan for future IT staff needs--in the form of the year 2000 computer problem. The Health and Human Services Department, for example, had to bring back 40 retirees to help prepare its systems for Y2K. Evelyn White-Brown, deputy assistant secretary for human resources at HHS, believes that had the department kept an alert eye on the horizon, it could have prevented that need. "We could have been better prepared to offer retention bonuses to individuals in the information technology field to stay with us long enough to attach them with some of the younger workforce who didn't have the skills, or do some retraining so that in the two or three years beyond that we would not be facing the problem as we've had to," she says.

Getting Prepared

Priming the pipeline to avoid such problems in the future is precisely what agencies are trying to do now. Some are further ahead than others. Commerce Department officials are implementing an "SES 2000" program that will identify the positions that are likely to open up soon via retirements and will train and develop a new generation to fill those jobs. Tomchek is tracking numbers across all occupations to identify potential gaps before they occur. Turnover doesn't have to be a bad thing, as long as an agency plans for it, she notes.

Treasury has created an executive leadership program for senior executives. Treasury provided solid training on technical and core mission skills and was good at funneling people into the SES, but it had a training and development void within the SES ranks, Dolan says. Treasury officials hope the new program will encourage people to stay with government rather than flee to higher-paying private-sector jobs. "Research shows that the feeling that [people] are continuing to contribute and that they are continuing to learn has a lot to do with whether people stay," Dolan says.

The Defense Department, which has 686,500 civilian employees, has created perhaps the most systematic plan to train and develop future leaders. The Defense Leadership and Management Program was established last year in response to a 1995 report by the Commission on Roles and Missions of the Armed Forces, which said DoD needed to take a comprehensive approach to developing civilian leadership.

Competition for slots in the program, which lasts six to 10 years, is very competitive. The program gives people at the GS-12 or GS-13 level a "developmental assignment" for at least a year outside their normal occupation or division, says Diane Disney, deputy assistant secretary of defense for civilian personnel policy. "This opens our civilians' minds," she says. "It opens them up to options and gets them out of the narrow stovepipes that they used to be in."

At the GS-14 and GS-15 levels, participants study national security decision making, something all military officers must do. "As a democracy, we believe in civilian control of the military," Disney says. "There-fore, it's imperative that our civilians know what our military members are learning." Throughout the program, students take defense-focused graduate courses in business administration.

Before this program, DoD's approach to civilian leadership training was "random," Disney says. "There was not a coherent departmental policy, so that the developmental opportunities a person gained were to some extent dependent upon how much that person already knew, which people that person knew, whether that individual had mentors--the luck of the draw, one might say. But as a department we can't afford that. We have a more complex mission with fewer people, so we have to make sure the people who are here have the capacity to do more and to think more broadly than their predecessors."

Program People

Agencies also are being more strategic about training program staff in critical new skill areas. Government no longer needs mere rule-followers, but rather people with analytical and communication skills, HHS' White-Brown notes. In contract management, for example, "we're talking about a different skill level today," she says. "We're not talking about people who know how to order pencils and paper clips. We're talking about people who monitor multimillion-dollar contracts. You take someone who's been engaged in having it all spelled out, with all the i's dotted and the t's crossed and then say go analyze this and go solve the problem--someone may get lucky and do it, but they haven't been prepared to function in that arena." Unless agencies provide procurement managers with sufficient training to adapt to the new way of doing business, or find them more appropriate jobs, White-Brown adds, "it's setting us on a course to fail."

With similar concerns in mind, the Census Bureau has developed a contract management certification program in partnership with George Washington Univer-sity. The program consists of seven week- long courses that are taught at Census headquarters in Suitland, Md. Employees must be certified before they can manage major contracts, says Nancy Potok, principal associate director and chief financial officer at the bureau.

Census officials also have funneled more training to mission-specific needs. For example, after noting widely varying--and often inadequate--surveying skills among college graduates with statistics and other related degrees, the agency created a master's program in survey methodology in partnership with the University of Maryland and the University of Michigan. The agency considered it a critical move, Potok says, because "survey methodology is our core competency here."

Rethinking Recruiting

Before agencies can train, develop and cultivate leaders from within their ranks, they first have to attract top entry-level talent, something that has been no easy task in recent years. In fact, the 55 departments and agencies that provide financial support for NAPA's human resources-related research have highlighted recruiting at the GS-5, GS-7 and GS-9 levels as one of their biggest problems, says Sumser, who is leading the research effort.

What agencies have to accept, Sumser says, is that they can't attract good people unless they're willing to spend a bit of money on marketing and on-site recruiting. "If you're not willing to spend the resources to establish a campus identity year-round--not just when you have a college recruiting visit--and if you're not willing to do your specific college recruiting with trained, well-informed people, then you're not going to get the cream of the crop," he says.

That means having a formal recruiting strategy. "You need to step back and think about what kind of image are you trying to convey," says Mary Lou Lindholm, associate director for employment at the Office of Personnel Manage-ment. Agencies have to identify their target audience, as well as the exact type of information they want to convey through brochures and other advertising, she notes. "You have to have a plan. You can't just go at this haphazardly."

At the Federal Reserve Board, which NAPA plans to study to learn some best-practices lessons, "we try to capitalize on the prestige of this organization," says Kathy Cimral, manager of human re-sources. "We quite frankly tell people that a job here will open doors" for graduate school or other jobs. The Fed also has recognized the importance of having program employees help with the recruiting process. "There's something to be said for talking to a line person face-to-face," Cimral says.

The Customs Service, too, has found front-line workers critical to the recruiting process. Employees such as customs inspectors and canine enforcement officers accompany HR recruiting specialists to college campuses so students can get a more direct sense of what the agency's jobs are like, says Deborah Spero, assistant Customs commissioner for human resources management.

Selling Points

Recognizing that federal salaries often pale in comparison to what private firms can offer, agencies also are selling other aspects of jobs, such as work-life programs, as part of their compensation packages. "From a recruiting standpoint, it's important for employees to know that they can balance both work and family life and be successful in their work life to the extent that they can continue to get awards and bonuses and things of that nature," HHS' White-Brown says.

One of the key goals of the HHS work-life effort, which Secretary Donna Shalala started after seeing the toll downsizing had taken on her workforce, is to improve employee satisfaction. A work-life center offers counseling, job search, child care and other services. And employee suggestions for changes often are implemented. For example, when employees complained to Shalala that having to fill out sign-in/sign-out sheets every time they left for a lunch or other break was a demeaning nuisance, she abolished them. "Employees are inclined to produce more and work a lot harder if they feel trusted," White-Brown says.

Such changes also help retain people, she adds, "because employees can feel they are working in an environment where management leadership cares about them. They're not just here to suck them dry and get all the work out of them."

For all the worry about low salaries, Sumser is convinced that money doesn't have to be the deciding factor in the recruiting game. If aerospace engineering students hear NASA recruiters discuss the space program, they'll be hooked, he says. The same goes for budding environmental scientists and the work done at the Environmental Protection Agency. Virtually every agency has a compelling mission to sell, he says.

Sumser reflects fondly on his 42-year military and government career. "I worked for NASA during the manned space flight years. I worked for Health and Human Services. I worked for the Labor Department when the poverty program was created." Although he worked in human resources rather than on special programs, Sumser always understood that his work fit into the broader agency missions. "I can't believe that there aren't lots of people out there who have that same perspective."

Disney also believes there are ample incentives for young people to join public service even without the big salaries. Most significant, she says, is that today's young people will have unprecedented opportunities. "People will be able to rise more rapidly than their older siblings [or parents] would have been able to because of the turnover that's going to be engendered among the oldest people who are here," she says. "I see it as a wonderful career opportunity."

Disney says if she were counseling young people on career options, she'd say: "Folks, this is the place to be because in five years, 10 years, you can be overseeing major efforts. You'll be doing things at a much younger age than the baby boomers could have done because there were so many in the baby boomer cohort that there was lots of competition for all kinds of positions. As those vast numbers move out, lots of opportunities open. So if you want to position yourself for a really good career, the civil service . . . is the way to go."

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Young Blood

Susannah Zak Figura — Wed, 01 Sep 1999 00:00:00 -0400

n the 1960s, when federal agencies were creating new social programs to help the poor and aspiring to such ambitious scientific goals as sending man into space, the idea of working for the government carried cachet. Idealistic young college graduates happily flocked to public service.

A lot has changed since then. Deservedly or not, government has largely lost its reputation as an innovator. Bureaucrats, thanks to years of negative portrayals by politicians and the media, are viewed by many as inefficient and wasteful. Because it has become fashionable to denigrate federal service and government jobs often pay less than those in the private sector, the idea of working for the government is a far less attractive option for young college graduates.

"The image does not sit well with my graduate students who would like to go into government, but are concerned about the image," says Rosslyn Kleeman, executive-in-residence at George Washington University's Department of Public Administration. Indeed, a 1998 study conducted by researchers at George Washington for the Pew Charitable Trusts and the National Association of Schools of Public Affairs and Administration (NASPAA) found that college Phi Beta Kappa honor society members generally have unfavorable views of government careers. "Most Phi Beta Kappas envision good benefits and job security, but not much else that is positive about federal employment," the study found. For example, only 22 percent said they believed federal service provided good opportunities for personal growth and skill development, and only 21 percent said they believed they would have capable co-workers in a federal job.

Private Prospects

More of today's graduates are seeking jobs with the private contractors who are doing an increasingly large portion of the government's business. "This is the first generation of my students that are going more with contractors," says Kathryn Newcomer, chair of the GWU public administration department. Most students still go into public service or the nonprofit sector, she says, but a rising number are taking contractor or other private-sector jobs. Indeed, the number of college graduates with public policy and public administration degrees who began their careers in federal, state and local government dropped from a high of 76 percent in 1973 to 49 percent in 1993, according to The New Public Service, a forthcoming book by Paul Light of the Brookings Institution. Of that 49 percent, only 30 percent joined the federal government.

Julie Helm, who graduated from George Washington University's public administration master's program this year, is one of those who opted for private-sector work. She applied for some federal jobs but was frustrated with the amount of paperwork required. Helm also was worried that government work might not be exciting enough. "I tend to really thrive in a fast-paced environment," she says. "I don't think it's impossible to find that kind of environment in the federal government, but I think it's more common in the private sector." Salary was also an issue. Helms had spent several years working hard to get experience and had earned her master's degree. "I was expecting to be compensated for that," she says. Helms now works as a lobbyist with Ford Motor Co.'s government affairs office in Washington.

Even among those graduates who do enter government ranks, many don't see it as a long-term career move. Michael Tyler, who joined the Commerce Department as a budget analyst five years ago after finishing a public administration master's degree, views his government service as one experience of many that will likely fill his working years. Before entering the government, he worked for several years in the telecommunications industry. If an attractive private-sector opportunity comes along in the future, Tyler says, he may well take it.

Image Makers

Hoping to boost government's image on college campuses, NASPAA is launching a campaign this fall to reinvigorate student interest in public service. "The idea is for college students to get more information about what's out there and more excited about the prospect of a public service career," says Katie Morrill, director of public service initiatives at NASPAA. "There are a lot of stereotypes. But a lot of it is ignorance. Many students don't even know what a bureaucrat is."

The association, which is the accrediting body for public administration schools, will distribute to colleges glossy promotional pamphlets profiling nine young men and women who hold dynamic federal, state and local public-service jobs. Included are a NASA scientist and an Energy Department employee who has worked on negotiating international treaties.

NASPAA also will send a "tool kit" to faculty and career advisers on college campuses designed to help them establish a link between "service learning," where students do volunteer work while in school, and student interest in public-service careers. The service learning concept has been a big success, Morrill says. "But it ends there. It doesn't transfer to people considering careers in public service." NASPAA also is working with the Office of Personnel Management to boost on-campus recruiting.

NASPAA's and individual agencies' efforts to raise the profile of federal service among students likely will take years to bear fruit. In the meantime, agencies can be glad there are still some people like Michael Campbell around who wouldn't choose any other career. Campbell joined the Labor Department two years ago as a Presidential Management Intern.

As a policy analyst in Labor's inspector general office, Campbell says he's had the chance to work on varied projects and to develop a broad range of management skills. He's also made some good friends among other PMIs across government, whom he describes as a tight-knit group of people who are always willing to help each other.

What does Campbell like best about government work? The ability to effect change on a large scale, he says. And he's not at all bothered by the salary. "I would definitely welcome" a long career in government, he says, adding, "The rewards that you get from the public service are pretty profound."

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Cut to the Core

Susannah Zak Figura — Wed, 01 Sep 1999 00:00:00 -0400

lowly but surely, the federal workforce is undergoing a fundamental structural shift. The bloated bureaucracy is gradually giving way to a streamlined permanent workforce consisting only of mission-critical staffs who are supplemented, when necessary, with short-term employees. The advantage of this approach, says Evelyn White-Brown, deputy assistant secretary for human resources at the Department of Health and Human Services, is "that when you have fluctuating work periods, you bring in the temps and the contractors, and [when you have budget cuts or a reduced workload] you don't have a need to go into any staff reductions of the core workforce."

White-Brown and representatives from three other agencies in September 1998 published a guidance document called "Workforce for the Future" that addresses the new "blended workforce" trend. Private companies and agencies increasingly rely on contingent workers such as contractors and consultants, the document notes, and in the process are saving on labor costs, cutting the time it takes to move people in and out of the organization, and improving efficiency. Before agencies can have the most efficient blend, however, they must analyze their core mission needs so that they maintain adequate permanent staff, White-Brown notes.

The nature of its work forced the Census Bureau to begin considering core workforce needs long before most agencies. Because it conducts the decennial census and a variety of more frequent economic surveys, the bureau has constantly changing staffing needs. "Our biggest challenge is having large swings in our work, which result in large swings in the workforce," says Nancy Potok, principal associate director and chief financial officer at Census.

In the past, when Census needed more full-time employees at headquarters to help with various surveys or the decennial census, the agency hired permanent staff whom later, after funding dropped, it couldn't sustain. The resulting reductions in force hurt morale and productivity, Potok says. So now Census hires these extra people strictly for two-year terms. Noting that young people generally prefer changing jobs every couple of years, Potok says the bureau has had very little trouble recruiting for the term positions.

Whether via term appointments, contractors or other short-term employment arrangements, the federal workforce's transition toward operating as a flexible entity that can grow or shrink with relative ease is inevitable, says Rosslyn Kleeman, former director of workforce issues at the General Accounting Office. "I think it's the wave of the future in both the public and private sectors."

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Contract Reform Is Risky Business

Susannah Zak Figura — Sun, 15 Aug 1999 00:00:00 -0400

sfigura@govexec.com

nergy Secretary Bill Richardson has had a lot on his plate since taking office in August 1998. There's been the unveiling of the world's fastest computer, debate on electricity deregulation and controversy over the alleged theft of nuclear warhead technology from the Los Alamos National Laboratory in New Mexico.

Taking on a comparatively low profile, contract reforms that began in 1994 have also been pushed forward, with contracts increasingly being competitively awarded using a fixed-price, performance-based approach. Since 1994, DOE has competed 18 major contracts to manage and operate agency facilities across the country. And in fiscal 1998, the department competed 93 percent of new contracts for activities other than managing and operating sites. Thanks to the reforms, the average time to prepare a solicitation has dropped from two years to less than six months.

Observers agree that DOE contracting methods have improved, but they note lingering problems. In a January report (GAO/OCG-99-6), the General Accounting Office declared DOE's contract management a "high-risk area" warranting continued close observation. "DOE has had difficulty completing large projects on time and within budget," the report said. From 1980 to 1996, DOE engaged in 80 major system acquisitions. Of these, 31 were stopped before completion, after spending more than $10 billion, the report said. Fifteen were finished, but many of those were behind schedule and over budget. Twenty-seven of the 34 ongoing projects have had cost overruns averaging more than 70 percent, GAO noted.

Then in June, GAO reported (RCED-99-141) that DOE does not know whether performance-based contracts at its national laboratories improve contractor performance and reduce government costs. Science and technology research and development do not always lend themselves to easily defined performance objectives, GAO found, and DOE's early performance-based contracting attempts led contractors to focus on activities tied to performance fees while neglecting other important tasks.

Part of DOE's contracting problems stem from the agency's changing mission. Today, DOE's chief duties are promoting scientific research, overseeing the country's nuclear weapons inventory and cleaning up former weapons production sites. But it wasn't so long ago that DOE's primary mission was very different: managing production of the nation's nuclear weapons arsenal. This change has made some projects obsolete. It has also made it hard for the agency to maintain congressional support for long-term, expensive projects. In addition, because Congress doesn't approve the full cost of each project up front, DOE must settle for incremental-and frequently insufficient-funding on an annual basis, often triggering delays and cost overruns.

Internal factors also have contributed to contracting problems. The agency's "inadequate technical and managerial skills have resulted in higher costs and delays," because DOE cannot properly oversee contracts, GAO auditors have argued. Such shortcomings led to the six-year delay and $900 million overrun on the Defense Waste Processing Facility in South Carolina, according to GAO. Agency efforts to improve the situation have come up short, GAO says. Not only must DOE rely on outside technical expertise to evaluate complex cleanup proposals, but agency staff also have insufficient experience and expertise in administering the new fixed-price contracts, according to GAO.

"GAO missed the mark" on this observation, says Richard Hopf, DOE's deputy assistant secretary for procurement and assistance management. "The bigger challenge is not with the procurement workforce but rather the program and technical workforce. The critical skill gap is the ability to draft statements of work for highly complex work activities adequate to support a fixed-price contract."

Likewise, Hopf argues, GAO was off base in its June report on performance-based contracts. In a pointed response to the report, Hopf wrote that DOE's evaluations showed the new approach was working. "Although it is unlikely that in the future we will identify some scientifically conclusive mechanism to confirm or deny these early assessments, it would appear intuitively obvious that defining performance expectations and measuring results is an effective management tool," he wrote.

Still, DOE officials acknowledged the shortage of staff expertise in contract management back in 1994, when a contract reform team declared that the agency lacked sufficient in-house skill in such areas as contract administration, cost estimation and financial management. Since then, DOE has sought to obtain certification for most of the agency's procurement staff, an effort that should be completed in fiscal 2000. Also next year, the department will begin offering advanced studies in procurement. "The objective is to train tomorrow's purchasing leaders in the new skills and knowledge basics that are critical to successfully continuing the major changes thus far made in the procurement community," Hopf says.

Downsizing and budget constraints certainly haven't helped DOE sort out its skill needs. Since former Secretary Hazel O'Leary launched the Strategic Alignment Initiative downsizing plan in 1995, DOE has seen its ranks drop 25 percent to about 11,000 employees. The headquarters procurement staff has been cut in half. Contractor employees, who once numbered 150,000, are down to about 103,000. "The impact of personnel reductions and ongoing budget limits, which have virtually precluded the hiring of new blood, are among procurement management's biggest worries," Hopf says.

The agency also has grappled with problems in its contract incentives process. The DOE inspector general criticized department officials in 1997 and 1998 for providing too little guidance on developing and administering such incentives. DOE has tried to rectify the problem by issuing more guidance, providing training and incorporating lessons learned from past years' experiences. Hopf insists that incentives have significantly helped boost contractor performance. For example, at the Kansas City Plant, which manufactures non-nuclear components for the country's nuclear weapons stockpile, the use of incentive fees helped reduce the occurrence of safety problems to one of the lowest rates in DOE. Private firms now use the new level as a benchmark, Hopf says.

Oversight Heat

The agency's management and integration contracts, which grew out of the contract reform effort, came under congressional scrutiny last year. Specifically, lawmakers targeted the M & I contract awarded to Fluor Daniel at Hanford in 1996 for significant cost and time overruns related to work on the Spent Nuclear Fuel project. The structure puts in place one general contractor to oversee the work of specialized subcontractors. In the view of some members of Congress, the set-up merely creates another layer of bureaucracy. "It seems to be quite inefficient," agreed Gary Jones, a GAO auditor, at a May 1998 hearing of the House Commerce Oversight and Investigations Subcommittee. "I'm not sure DOE has figured out what its role is versus that of the integrating contractor."

DOE remains committed to the management and integration concept, Hopf says, because it allows for "greater use of competitive fixed-price subcontracting, increasing the department's ability to obtain cost-effective, best-in-class subcontractors for specific tasks." In the Hanford case, Fluor Daniel took a financial hit because of its poor performance, he adds. Out of $7.2 million of available fees the company could have earned in fiscal 1998, "not only did [Fluor Daniel Hanford] not earn any fee, they were penalized by negative incentives which resulted in additional losses of fees otherwise earned on other activities," Hopf says.

Budget Priorities

For fiscal 2000, DOE officials have requested $17.8 billion, an amount slightly below this year's appropriation of nearly $18 billion because of some one-time adjustments. Program funding would actually increase by $717 million, or 4 percent, under the request. Although DOE does not give procurement a separate budget line item, officials estimate that procurement spending will be about $16.6 billion in fiscal 2000. Also under the budget request, DOE's privatization plan-which seeks alternative financing strategies such as fixed-price, performance-based contracts for large-scale cleanup design and construction projects-would receive $228 million, about the same as in fiscal 1999.

About one-third of the budget-$6.5 billion, $100 million more than the current fiscal year-would fund environmental cleanup, restoration and waste management efforts. Through contractors, DOE manages more than 100 hazardous, radioactive and mixed-waste sites, remnants of the Cold War nuclear weapons production complex, in more than 30 states. A continuing clean-up priority is the accelerated closure effort launched in 1997 to speed up and cut the costs of cleanup at the 53 DOE sites still contaminated with nuclear matter.

In a June 1998 report, "Accelerating Cleanup: Paths to Closure," DOE established a goal of completing work on 90 percent of the projects by 2006. The initiative began with only two sites-Rocky Flats, Colo., and Fernald, Ohio. The acceleration of activities such as shutting down nuclear facilities and packaging and shipping plutonium metals and oxides has allowed DOE to cut four years off the expected cleanup time needed for Rocky Flats, and three years for Fernald. Because of these successes, DOE has added the following four sites to the initiative: Mound, Ashtabula and Columbus in Ohio, and West Valley, N.Y.

The budget request would grant DOE's national security programs $6.2 billion in fiscal 2000, a $244 million increase. Most of that would go to the Stockpile Stewardship Program, which seeks to keep the nation's nuclear inventory reliable without underground nuclear testing. A key part of the SSP is the Accelerated Strategic Computing Initiative, through which DOE is producing increasingly sophisticated weapons simulation software and computers. Last year, DOE cranked up the world's fastest computers, capable of 3 trillion operations per second. By 2004, DOE hopes to have computers that can do 100 trillion operations per second.

DOE has requested $2.3 billion for energy resource programs in fiscal 2000, up slightly from 1999. More than half of that would go to programs related to energy efficiency and renewable energy, with the rest spread among programs for fossil energy, nuclear energy and power marketing.

As DOE moves forward with its competitive contracting efforts, officials also are hoping to finish revising the regulations underlying management and operating contracts. The changes, in part, will eliminate terms and conditions that are redundant with the Federal Acquisition Regulation, which governs procurement governmentwide. The agency hopes that the new regulatory language will help ensure more procurement consistency across DOE sites.

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Progress Slow But Sure

Susannah Zak Figura — Sun, 15 Aug 1999 00:00:00 -0400

sfigura@govexec.com

utside the Washington Beltway, much of the American public thinks government business crawls along at a snail's pace. But among the group of people who manage contracts for Uncle Sam's civilian agencies, perceptions couldn't be more different. Contracting officers have seen reforms in recent years that have significantly changed the way deals are negotiated, structured and managed.

The major shift has been away from cost-based contracts awarded without competition toward competitively awarded, fixed-price contracts that hold vendors accountable for achieving specific goals for an agreed-upon price. The idea is to ensure that agencies get the best deals-in terms of savings and quality of work-and thereby make the most of taxpayer investments.

New Rules

Agencies have had more than a year now to start using new negotiating techniques encouraged by the rewrite of Part 15 of the Federal Acquisition Regulation. Part 15 governs only about 20 percent of federal procurement actions but applies to about 80 percent of the money spent. The revised rule encourages early and open discussion between agencies and prospective contractors. Knowledgeable contractors can even help agencies refine their draft requests for proposals before final versions are published. Through this process, agencies have a chance to better evaluate contractors' abilities before accepting a bid, while contractors get to better understand agencies' service needs.

Some agencies communicated this way with their contractors before the Part 15 rewrite, but others hesitated for fear doing so might violate regulations or give the unintended impression that they were playing favorites. The resulting lack of dialogue often led to misunderstandings that ultimately triggered cost and schedule overruns. Now that the FAR actually directs agencies to communicate openly with contractors, "they feel they have more freedom to negotiate," a Clinton administration official says.

Part 15 also requires agencies to consider contractors' past performance when evaluating bids to assess how well a contractor would be likely to carry out a given project. In 1998, this provision only applied to competitive acquisitions expected to cost more than $1 million. But since Jan. 1, the requirement has applied to all contracts over $100,000. Not all agencies are putting as much emphasis on the issue as the administration would like. Nevertheless, "past performance is taking hold out there more and more," the administration official says.

Pushing Performance

Also under way is the transition to performance-based service contracting (PBSC), which the Office of Management and Budget expects to yield significant savings over the long term. In a pilot project started in October 1994, 15 agencies converted 26 contracts valued at about $585 million-for such services as janitorial operations, computer maintenance and technical support-to performance-based versions. "The agencies reported an average 15 percent reduction in contract price in nominal dollars, and an 18 percent improvement in satisfaction with the contractors' work," boasted OMB's Office of Federal Procurement Policy in an October 1998 report, "A Guide to Best Practices for Performance-Based Service Contracting."

The process isn't easy, though. "People are struggling with defining their desired outcomes," an administration official says. Richard Hopf, deputy assistant secretary for procurement and assistance management at the Energy Department, agrees. Program and technical staff need significant training to adapt to the new processes, he says. "The critical skill gap is the ability to draft statements of work for highly complex work activities adequate to support a fixed-price contract."

The best-practices report includes tips on how to approach work statements, which are the foundation of PBSCs. "For example, instead of requiring that the lawn be mowed weekly, or that trees be pruned each fall, state that the lawn must be maintained between two to three inches or that tree limbs [should] not touch utility wires or buildings," the report says.

Because of the extra analysis required to write work statements, agencies are facing increased up-front costs for their PBSCs. But according to the best-practices report, "the resulting savings to the agency through the use of PBSC will quickly offset the initial up-front costs." If savings continue to be as great as those realized by the pilot agencies, then the payoff will indeed be significant.

While useful, the fixed-price performance-based approach may not work for all types of projects. For example, research and development projects by definition do not have precise goals. But even in these cases, performance-based contracting can be used in an "evolutionary" way, an administration official says. A project can be broken down, with each small segment contracted out via specific performance goals. This way, as the process moves forward, the project's overall risk is reduced. There may come a point when a performance-based fixed-price contract then makes sense for the entire project, he says.

Agency Buys

In fiscal 1998, the Energy Department, as usual, led civilian agency contract spending, with more than $14 billion in purchases under prime contracts of $25,000 or more. Among the contracts that were competitively awarded was a $1.4 billion, five-year pact for the management and operation of the Bettis Atomic Power Laboratory, whose facilities are divided between West Mifflin, Pa., and Idaho Falls, Idaho. The competition, which was the first ever for the laboratory, led to the transfer of duties from former contractor Westinghouse Electric Co. to Bechtel National Inc. Westinghouse had managed the site since it was opened in 1948.

Also competitively awarded in 1998 was a management and operating contract for DOE's National Renewable Energy Laboratory in Golden, Colo. A partnership led by Kansas City-based Midwest Research Institute and including Battelle Memorial Institute and Bechtel National won the five-year contract, the value of which could exceed $800 million.

Brookhaven Science Associates won a five-year DOE contract last year to do research and development, environmental management and other work at the Brookhaven National Laboratory in New York. The firm won the $2 billion award after the Energy Department revoked the contract of former site operator Associated Universities Inc. because of lax environmental safety and health oversight. The new contract incorporates safety and health performance goals.

NASA once again was the second highest civilian spender in fiscal 1998, with nearly $11 billion in prime contract awards, down slightly from the previous year. Among the agency's largest procurements was the $1.8 billion contract awarded to a team led by Lockheed Martin Space Operations Co. that also included Allied Signal, Computer Sciences Corp., GTE and Booz Allen & Hamilton. The contract-called the Consolidated Space Operations Contract-integrates 15 previous contracts and will manage NASA's data collection, telemetry and communications for missions.

Among individual contractors, Lockheed Martin Corp. continues to hold its position as the No. 1 civilian agency contractor, with nearly $6 billion in contract awards. Accounting for part of that is a 10-year contract with the Federal Aviation Administration awarded in December 1997, which could be worth as much as $1 billion over the contract term. The NASA contract described above accounted for another large chunk of Lockheed's civilian agency awards in fiscal 1998. However, the company suffered a disappointment early this year when it lost out to Computer Sciences Corp. in its bid to win the 15-year, $5 billion contract to manage the IRS tax systems modernization effort.

Perhaps the most significant change to the civilian agency top 100 contractors list from last year to this year was the jump of Bechtel Group Inc. from No. 22 to No. 9. The company's future looks bright. Just two months ago, a Bechtel-led consortium won a $3 billion contract from DOE to manage the Idaho National Engineering and Environmental Laboratory.

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Behaving Badly

Susannah Zak Figura — Thu, 01 Jul 1999 00:00:00 -0400

sfigura@govexec.com

e gave me a hug. He slid his hand down to my chest, and he squeezed my breasts with both of his hands. I pulled back in shock, and he had a smirk on his face. . .. I wanted to slap his face. Instead, I mumbled something and rushed to the ladies' room. I felt sick and the rest of my night was ruined. And I kept wondering, who could I tell, who would believe me?"

It reads like a bad romance novel. But Doris Moore-Russell, an employee at the Veterans Affairs medical center in Fayetteville, N.C., was describing the harassment she'd suffered on the job to the House Veterans Affairs Subcommittee on Oversight and Investigations in April 1997. She and four other female Veterans Affairs Department employees-known as the Fayetteville Five-had come to Washington to share their stories about facility director Jerome Calhoun. They testified before a Senate panel the next month.

It was the second time in five years that VA was the target of major congressional hearings on sexual harassment problems. The first time, in 1992, Congress agreed to let VA Secretary Jesse Brown try administrative fixes. His zero-tolerance policy had improved things marginally, but overall little appeared to have changed. Not only did VA still tolerate egregious sexual harassment, legislators pointed out, but the agency lacked a fair avenue for redress. On top of that, demoting Calhoun was far too mild a punishment, lawmakers said. This time they passed a law forcing VA to make major changes to its system for combating sexual harassment.

VA is not the only agency to face public scrutiny over this issue. The Navy had the Tailhook scandal, where servicemen groped and assaulted some of their female colleagues during a 1992 convention in Las Vegas. In 1996, stories of harassment and other sexual misconduct among drill instructors and new recruits came to light at the Army's Aberdeen Proving Ground, Md. And in October 1997, just a few months after VA's humiliating hearings, the Federal Aviation Administration faced similar oversight attention for sexual harassment charges against air traffic controllers.

But while VA is not alone in its sexual harassment troubles, the agency is unique in having been forced by law to reform the way it handles these problems. VA's experience, especially as it relates to the Calhoun case, contains valuable lessons for all agencies on how to educate employees about sexual harassment, design a credible complaint process and punish perpetrators. As one House staffer puts it, "The Calhoun case was an object lesson in how not to handle a case." Those lessons, along with two 1998 Supreme Court decisions that laid out specific actions employers can take to avoid liability in sexual harassment cases, provide agencies with an increasingly clear picture of their legal, moral and public responsibilities.

Anatomy of a Case

The Calhoun case sparked attention because it involved several allegations against a senior executive whose job it was to set the tone for a respectful, professional work environment. The case also highlighted a glaring conflict of interest built into VA's equal employment opportunity complaint system, which handles sexual harassment claims as well as racial, religious and other discrimination cases.

Each facility director served as the top EEO officer at a particular site, with the EEO managers and counselors who guided complainants through the process reporting to the director. In other words, the Fayetteville Five had to file their complaints with Calhoun himself. Nicholas Inzeo, deputy legal counsel for the Equal Employment Opportunity Commission, told House members at the April 1997 hearing, "The peculiar setup at the VA center . . . would appear to make that situation worse, where the EEO manager on site reports to, in this instance, the individual who was alleged to have discriminated."

Adding fuel to the fire, VA officials made several procedural errors in handling the case, including allowing someone to write a letter firing Calhoun without proper authority. Agency attorneys and human resources experts decided that VA should not push forward with a removal order. The chances were good, they said, that the agency would not prevail were Calhoun to appeal his dismissal to the Merit Systems Protection Board.

Rather than take that risk, VA officials negotiated a settlement in which Calhoun agreed to give up his senior executive status and transfer to a non-supervisory GS-14 position in Florida. Calhoun already had requested a transfer to Florida in anticipation of his upcoming retirement. Also as part of the deal, he kept his SES salary, which actually increased slightly to about $106,000 because of a cost-of-living adjustment. The maximum pay for a GS-14 at the time was $83,000.

VA officials believed this arrangement was the best they could achieve, given the circumstances. "The last thing I wanted was to go before the MSPB, have [the removal] reversed, have to pay all kinds of attorneys fees, maybe have to pay some other kind of monetary award, and put a person anywhere they wanted to go," VA Deputy Secretary Hershel Gober told the House panel in 1997. In similar testimony before the Senate, he added: "I think we rushed. . . . No doubt there was a hostile atmosphere down there. And we were concerned it would affect the treatment of veterans."

To the victims, VA's action against Calhoun seemed more like a reward than a penalty. In their view, they had suffered degrading harassment and mental anguish, while Calhoun received a de facto raise, got a less-taxing job and moved to the city of his choice. "When the accused is so obviously rewarded, where is the justice for the victims?" asked one of the Fayetteville employees during the Senate hearing. Many in Congress took the same view. "It appears that the VA has a 'Club Med' level of punishment for sexual harassment that is unacceptable," said Rep. Steve Buyer, R-Ind.

After VA's failed attempts at administrative solutions, Congress in November 1997 enacted a law requiring VA to centralize investigation and review of all EEO complaints, taking that power out of facility directors' hands. Mandating a specific EEO structure was a drastic measure. EEOC regulations generally give agencies great flexibility to design their own complaint systems. The law also required VA to significantly boost training on sexual harassment and ordered evaluations to be conducted by a third party.

Early indications suggest the new processes and added attention to prevention are starting to work. Sexual harassment complaints make up about 3.5 percent of VA's total EEO case inventory so far this fiscal year, down from 7.7 percent in fiscal 1997. "My impression is that it is a resolving situation-I do think things are better," says John Bradley, a Senate Veterans Affairs Committee staff member. "But it needs some more running time to see if that process can change a culture which was pretty ugly. We are watching this very, very closely."

House observers, too, are cautiously optimistic. "There is a sense that they are getting on the right track, but it remains to be seen if they're achieving the right results," a House staffer says, adding that the oversight subcommittee will follow the matter "for some time to come." At press time, the House had scheduled another round of hearings for the summer to assess the situation.

VA's Fixes

VA's new complaint system includes two core offices. The Office of Resolution Management (ORM), with 12 offices nationwide, counsels accusers at the pre-complaint stage in the hope of resolving conflicts so that formal complaints never have to be filed. ORM also investigates allegations of all types of discrimination, guides employees through the complaint process and oversees compliance with the agency's zero-tolerance policy. In addition, ORM uses multidisciplinary rapid-response teams to investigate serious allegations against senior managers as soon as they come to light, so that problems don't fester and escalate into a Fayetteville-like situation. The Office of Employment Discrimination Complaint Adjudication reviews formal complaints and makes final agency decisions.

The only direct role facility heads now play in the complaint process is cooperating with ORM investigations and, in the event that the adjudication office finds one of their subordinates guilty of sexual harassment, doling out the appropriate penalty. However, the directors still have general responsibilities for fostering a discrimination-free work environment.

The new approach represents a policy about-face, especially for such a large agency-second in size only to the Defense Department-which historically has been highly decentralized. This shift has been "a monumental change for the department," says Deputy Assistant Secretary Ventris Gibson, who heads ORM. "To have been totally decentralized for as long as we can remember, to now become a centralized organization in an environment where we're pushing decentralization [of various human resources functions]-it's certainly something to make you go 'Wow.' " Gibson was director of human resources at the Veterans Benefits Administration in 1997 when she was asked to lead a special investigation of the Calhoun case. She became ORM chief at its inception in February 1998.

It wasn't easy in the early stages, Gibson admits, noting that some facility directors resisted giving up authority. But she insists relations today are better. They're increasingly collaborative, she says, with facility directors and other senior managers starting to see the benefit of including EEO-and, indeed, the human resources factor-in broader management decisions such as those related to performance planning. "That was not how we did business in the past."

VA Secretary Togo West, who as Army Secretary steered the service through the Aberdeen aftermath, has reinforced Brown's zero-tolerance policy by vowing to hold managers accountable for infractions, Gibson says. He has also put a premium on staff training. Beginning in May, VA will certify that all 235,000 of its employees are trained on sexual harassment prevention every two years. Training will be done via live and video presentations, interactive computer programs and other means.

As an incentive to enforce the zero-tolerance policy, VA directors must reimburse ORM out of their budgets for investigations at their facilities. "If you're going to have high discrimination, you're going to pay a lot for the service," Gibson says. "If you really work on the front end to reduce and eradicate discrimination, then you will pay less."

Lingering Hurdles

Most VA employees and agency observers believe the independent EEO structure lends significantly more credibility to the complaint process. Removing "complaint resolution from the control of individual facilities has helped promote trust in the new system and the perception that ORM will administer the new system fairly and with integrity," concludes an evaluation report by consulting firm Booz-Allen & Hamilton. The report, "Assessment of the EEO Complaint Resolution System in the Department of Veterans Affairs," was sent to Congress last spring, as required by the 1997 legislation.

But not everyone likes the new system. "That optimism is not found with many of the supervisory employees, who expressed their concerns that ORM would be biased in favor of the complainant," the report says. Some supervisors also fear that the complete independence of the process from facility management, as well as ORM staff's unfamiliarity with a facility's culture, may slow the resolution process, according to the report. Gibson says concerns may ease as supervisors become more familiar with the new system. Aside from the centralized setup, "the reality is that ORM processes complaints based on [EEOC guidelines, the same way] they were processed in the past," she notes.

The Booz-Allen review found shortcomings in VA's sexual harassment training. The quality and content of training varies considerably across offices, the report says. "Thus, not all employees have equal access to EEO-related training." In such a decentralized agency, this inconsistency is not surprising, a House staffer says, adding that VA may need to standardize its training approach. Asked to respond to Booz-Allen's finding, Gibson simply said, "Training is determined locally."

Despite her high hopes for the program, Gibson's tenure in the EEO realm has armed her with realistic expectations. "Even as seriously as we take sexual harassment and as much as we [do to prevent it], there will on occasion be people, or a person, who will act inappropriately," she says. "But I believe that we now have the mechanisms in place, more firmly so than in the past, that will in fact focus and correct the behavior well ahead of how we did in the past."

Supreme Court Speaks

As Gibson and her staff were restructuring VA's EEO system last summer, the Supreme Court issued two decisions that raised the responsibility bar for all employers in sexual harassment cases. Faragher v. City of Boca Raton involved a woman lifeguard who had been groped by her supervisors. Even though the city had a sexual harassment policy, the fact that officials had not disseminated the policy to beach employees made them liable for the supervisors' behavior, the court said. "You've got to have [a policy], and you've got to let people know about it," notes Diana Veilleux, employment attorney with the Washington law firm of Shaw, Bransford, Veilleux & Roth.

Burlington Industries Inc. v. Ellerth involved a woman whose boss allegedly urged her to wear shorter skirts, inappropriately touched her and said she might not win a promotion because she wasn't "loose enough." Ellerth later got a promotion but quit because of the harassment and filed suit. In the court's view, Burlington may be held liable for the supervisor's behavior even though Ellerth's career did not suffer as a result of spurning the advances.

While these decisions make it clear that agencies can be held responsible for the behavior of their managers, they also spell out an "affirmative defense" for employers in cases where there has been no tangible employment action, such as a demotion or firing, associated with the alleged harassment. If employers can prove they "exercised reasonable care to prevent or correct promptly any sexually harassing behavior" and that the complainant "unreasonably failed to take advantage of any preventive or corrective opportunities," then they may escape liability.

In other words, agencies that have a credible sexual harassment policy and an effective complaint process, and that make sure all employees understand both, should be safe. At the same time, employees have an obligation to use counseling and other resources offered by the agency to remedy sexual harassment problems.

As an EEO professional, Gibson says she welcomed the decisions. "Just as we would not condone employees having a physical altercation in the workplace, we are responsible for ensuring that you work in an environment that is free of sexual harassment," she says. "Employees should not be touching each other, that's the bottom line. Employees should not be making unwelcome [comments] or physical gestures at people of a sexual nature. That type of behavior is unacceptable in the workplace. The employer is responsible for educating the population of employees and preventing it to the extent possible."

Preventing the problem isn't just the right thing to do from a legal or moral standpoint, but also from a management standpoint, Gibson adds. "Any sort of workplace dispute, including sexual harassment or discrimination, undermines the mission of the organization because it takes the victim away from focusing on patient care or processing veterans' claims or ensuring the compassionate and caring and appropriate burial of a veteran and sensitivity to his family," she notes. "It takes away from doing that job 100 percent."

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Muscling In

Susannah Zak Figura — Tue, 01 Jun 1999 00:00:00 -0400

By October, President Clinton had issued an executive order directing agencies to form labor-management partnership councils to jointly identify problems, craft solutions and head off potential conflicts. At agencies where partnerships have flourished, union-management relations are definitely better, observers agree. But the broader picture is less encouraging. Resistance at many local offices from both union leaders and managers has kept the cooperation concept from penetrating deep into government ranks. And many mid-level managers, because they've been excluded from partnership councils, feel disenfranchised by the entire effort.

Now the unions want to push the concept of partnership a step further. They have urged the administration to enforce a provision of the order most agencies chose to ignore. In addition to forming partnership councils, agencies were directed to negotiate with unions over the so-called "permissive" subjects listed in 5 U.S.C. 7106 (b)(1). Often referred to as (b)(1) issues, they include: "the numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty, or . . . the technology, methods, and means of performing work." Since federal unions have no statutory right to negotiate these matters, this provision promised them a significantly greater voice in major management decisions, most notably those related to pay.

Most agencies chose not to follow that part of the order, relying on language in the statute which says that (b)(1) issues shall be put on the table only "at the election [or discretion] of the agency." White House officials were miffed when agencies didn't comply, but didn't do anything about it until earlier this year, when Vice President Al Gore's office circulated a draft memo that would require agency heads to sign a statement pledging to negotiate over (b)(1) subjects. The memo, many observers say, was clearly timed to help Gore woo union support as he gears up for his 2000 presidential bid.

A number of agencies-Justice, Treasury and Defense among them-have expressed serious concern about the memo. The Senior Executives Association and the Federal Managers Association have declared their flat-out opposition, insisting agencies should be free to individually decide whether negotiating over (b)(1) matters is appropriate for their circumstances. In a Feb. 24 letter to members of Congress, FMA President Michael Styles urged lawmakers to block the plan. "If it is allowed to proceed, it will have a devastating long-term impact on the federal government's ability to carry out its congressionally mandated missions in a timely and cost-effective manner," he wrote.

Meanwhile, some union leaders say they may abandon partnership unless (b)(1) bargaining becomes part of the package. They also dragged their feet earlier this year on helping the Office of Personnel Management draft a consensus civil service reform proposal because Gore had not officially issued the memo, according to a management source working with OPM on the proposal.

In the unions' view, a deal's a deal. "Partnership has a partner itself and that's (b)(1) bargaining," says Bobby Harnage, president of the American Federation of Government Employees, the largest federal union. "The (b)(1) issue is going to determine the future of partnership."

Adversarial Relations

Before the idea of partnership took hold, adversarial collective bargaining, grievances and litigation were the mainstays of federal labor-management relations. As one AFGE local president told Government Executive several years ago, "We bargain virtually every time they turn the lights out."

Relations started to shift in the late 1980s and early 1990s, but at only a few agencies. Clinton administration officials who developed the National Performance Review reforms "looked at the federal labor-management relations climate and said, 'Hey wait a minute, we can't make [these changes] happen,' " recalls Robert Tobias, president of the National Treasury Employees Union. NTEU represents 150,000 federal workers in 18 agencies, about two-thirds of whom work at the Internal Revenue Service.

Tobias and the late John Sturdivant, who was then president of AFGE, convinced the Clinton-Gore team that if unions were treated as partners in the reinvention effort, relations could turn around. Their efforts led to Clinton's October 1993 order on partnerships. "Only by changing the nature of federal labor-management relations so that managers, employees, and employees' elected union representatives serve as partners will it be possible to design and implement comprehensive changes necessary to reform government," the order said. A 10-member National Partnership Council, now headed by Office of Personnel Management Director Janice Lachance and including administration and union officials, was set up to guide and support efforts across government.

The partnership model, championed by companies such as Saturn and Harley-Davidson, promised drastic change. The goal was to get away from top-down dictates and tap into front-line workers' experience to find innovative ways to improve agencies' operations. "This probably is the largest change effort in labor-management relations in the history of the federal government," notes an OPM official.

To some involved, the idea of partnership was too broad a concept to be realistic. "I was a little bit skeptical about whether this would work in the federal sector, because the adversarial roles were so entrenched on both sides," Harnage recalls. But in some places it has worked, he says, and, among people who've experienced success, "there's a higher level of respect on both sides."

Changing Ways

To anyone who's been a party to the traditional, us-vs.-them collective bargaining process, the benefits of partnership are easy to see. In the traditional system, parties come to their respective sides of the table with exaggerated wish lists and then trade back and forth, trying to win as much as they can while conceding as little as possible, says Larry Goodwin, a personnel expert at the National Academy of Public Administration and former human resources director at the Labor Department. The process, which can take years, often ends up in a stalemate that goes to arbitration, where a third party makes a binding final decision that satisfies neither side. Recalling one set of traditional collective bargaining negotiations he worked on that lasted more than two years, Goodwin says, "It was the worst experience of my life."

Partnerships, on the other hand, encourage interest-based bargaining, which focuses on mutual interests, such as the development of a new performance-appraisal system or family-friendly work policies. Parties sit interspersed at the table, rather than on opposite sides, and once a mutual interest is identified, the group collectively brainstorms options for addressing the matter. Sometimes a facilitator helps guide participants. Final decisions are reached only by consensus.

The process often takes longer than the traditional method, but because up-front employee buy-in leads to fewer grievances, it takes less time to actually implement changes, advocates say. After 25 years of government labor-relations experience, Goodwin believes "the interest-based approach and the partnership approach are much more challenging, but they lead to better solutions."

Agency executives and union officials are quick to point out that partnership is not co-management. "At the end of the day, if we don't reach consensus and I'm the manager, I can make the decision," Tobias notes. "But what it does do is pledge that as I'm making this decision, I'm going to include you and your interest, and I'm going to try to resolve this with you before a decision gets made."

Anyone who's experienced a working partnership will be sold on the concept, Tobias insists. "When you assign people an important substantive task, you provide them with facilitated assistance, you teach them how to do interest-based problem solving, they will come out of that experience and say 'I'm a believer,' " he says. "Where that experience has occurred, people treat each other differently."

It can't work unless everyone at the table is committed to the process, Goodwin says. In the early days of NTEU's agreement with the Customs Service, Tobias remembers hearing grumbling from senior managers after they'd been informed of the new partnership arrangement. According to Tobias, at one of the initial meetings then-Commissioner George Weiss told his staff that he would be evaluating people who reported to him on how well they implemented not only the language but the spirit of the agreement, and that he expected they would evaluate the managers they supervised in the same way. "That's a very powerful message," says Tobias. "It made a significant difference in how fast we were able to start doing business."

Even with that commitment, the process is far from easy. "Partnerships are a lot like marriages," Harnage notes. "You're going to have your disagreements, but you have to work at it." And for some issues, partnership simply can't work. "Even in a partnership, you have instances where you go to traditional bargaining because the parties don't have mutual interests over a particular subject," Goodwin notes. When budget constraints force agencies to implement reductions in force, for example, the parties likely will resort to traditional bargaining because the union clearly would not have an interest in seeing members lose their jobs.

Success Stories

Where partnership has taken root, agencies have seen impressive results. At the Social Security Administration, a partnership with AFGE led to a labor-management joint benchmarking study seeking improvements for the agency's 800 number telephone service. After identifying best practices in the private sector and government, the group recommended changes that transformed SSA's 800 number from one of the country's worst to one of the most efficient. Now, 95 percent of callers get through within five minutes, says Paul Barnes, SSA deputy commissioner for human resources.

SSA also used partnership to help solve the problem of an excess of data-entry staff, Barnes says. By the early 1990s, improved automation had made two of the agency's three data-entry service centers unnecessary. Rather than close the centers, eliminate 1,000 jobs and face the costly and unpleasant grievances that would likely follow, SSA worked with AFGE to redesign the two centers from data-entry facilities to telephone-service operations.

Employees were happy, because they got training for new jobs that carried higher grades and higher salaries, Barnes says. SSA officials were happy because they expanded their much-needed telephone services. And since the two centers were located in Salinas, Calif., and Albuquerque, N.M., and employed many Spanish speakers, the agency satisfied its need for more Spanish-speaking telephone workers, he says.

An internal agency evaluation of SSA partnership activities found that the 42 partnership councils formed at various levels of the organization had affected 1,500 projects or outcomes. In addition, while staffing numbers have stayed relatively constant, the number of grievances filed against the agency dropped from 382 in 1993 to 131 in 1998, leading to significant litigation cost savings, Barnes says.

The Customs Service, which signed its first partnership agreement with NTEU in June 1994, also has seen benefits. According to a report by consulting firm Booz-Allen Hamilton, since 1994, every dollar spent on partnership has yielded at least $1.20 in benefits in the form of litigation costs avoided, time saved and increased revenue from fines. Jointly designed and implemented drug interdiction strategies have led to significantly higher seizure rates. "Partnership increased Customs' efficiency and effectiveness in meeting its mission," the report concluded.

Mature Relations

IRS officials and NTEU have one of the maturest partnerships in government. What started in 1987 as a way to get the agency back on track after a disastrous tax filing season has become an integral part of managing the IRS' recent restructuring effort. Since Congress passed legislation last year to reform the agency, "We have been included and involved every step of the way in every decision that has been made so far," Tobias says. "I believe that as a result of our participation, the decisions will be better, the implementation will occur faster, and we will have more chance at achieving [employee] acceptance than if we were operating in an environment where the IRS made the decisions and then announced them to the employees."

Contentious (b)(1) bargaining matters are very much on the table at IRS. Tobias has convinced agency officials to negotiate how jobs are classified-and therefore how much they pay-under the new organizational structure. Traditionally, unions have not had any say in job classifications, although they could challenge agency decisions to downgrade positions. Tobias also convinced IRS officials not to outsource any jobs as part of a recently signed contract to replace the agency's aging technology infrastructure. Now, Tobias sits on a steering committee that will oversee implementation of the 15-year multibillion-dollar contract.

Technically, classification and technology are (b)(1) issues, but Tobias prefers to see them in a different light. "When partnership is working, issues are not designated as (b)(1) or not (b)(1)," he says. "They are issues to be resolved. They are resolved in the context of a consensus decision-making model." David Mader, the IRS' chief of management and finance, agrees. It makes sense to get the union's views as the work moves forward, because technology and structural changes affect how employees do their jobs, he says. The IRS modernization can't succeed without employee buy-in, Mader adds. "Right now, partnership is more critical than ever."

Despite all these positive words, IRS and NTEU have had some tense moments on the (b)(1) issue. The agency's Memphis Service Center, for example, couldn't agree with the union on a plan for shift change procedures, so they took their conflict to arbitration. In its defense, IRS cited the statutory management right not to bargain over any (b)(1) subjects. But the arbitrator ruled in favor of the union. Because IRS signed a partnership agreement that said it would bargain over (b)(1) matters, the agency had to do so, the arbitrator ruled. In late April, IRS appealed the arbitrator's decision to the Federal Labor Relations Authority, an independent agency that adjudicates federal labor-management disputes.

Even with some relative successes, Mader, SSA's Barnes and their union colleagues are the first to admit that partnership has yet to take root throughout their agencies. It's a slow, sometimes painful growing process that requires training, changes in attitudes and commitment from all involved, they say. But the fact that not all organizational levels have made partnership work yet doesn't spell failure, insists an OPM official. It's "extraordinarily difficult" to fundamentally change the model of labor-management relations, he says. "I think we have seen tremendous progress."

Permissive Pitfalls

Despite these partnership successes, the recent uproar about Gore's draft memo shows that the (b)(1) issue still threatens to divide labor and management. Both sides have been litigating the matter for years. Last summer, agencies finally won a victory when the Federal Labor Relations Authority ruled that the executive order permits, but does not require, individual agencies to bargain over these subjects. Unions were furious. "There's been a lot of litigation and heartache around the (b)(1) issue," an OPM official says.

Gore's one-page memorandum, the future of which was still uncertain in late April, would have agency heads sign a notice stating that "I am hereby making the election to bargain over the matters set forth in 5 U.S.C. 7106(b)(1)." Agencies would have the right to revoke their election if, when the parties reached an impasse, unions filed suit in the courts. However, in the event of an impasse, unions could request that an administrative law court review the agency's decision, a right not included in the executive order.

The administration had intended the original order to direct all agencies to agree to bargain over (b)(1) issues, notes the OPM official. This provision was a critical part of the order, because "the (b)(1) issues really go to the heart of what a reinvented government is all about," he says. But most agencies took-and continue to take-the view that regardless of the order, the law allows them to make the final decision. Even OPM, which publicly endorses (b)(1) negotiating, has yet to bring those issues to its own bargaining table. Relations with the AFGE local at OPM have been tense ever since the agency underwent significant downsizing a few years ago.

Many managers, especially those at agencies that don't have solid labor-management partnerships in place, insist that forcing the (b)(1) issue will only make relations more tense. "I think it's going to make the situation much worse, because then people are going to be much more reluctant to share information than before," says one career manager. Managers may not say it publicly, but many also fear situations like the one Federal Aviation Administration supervisors faced last August. The National Air Traffic Controllers Association struck an agreement with FAA that will boost controllers' salaries by as much as $10,000 a year, while reducing supervisory positions.

G. Jerry Shaw, general counsel to the Senior Executives Association, has other concerns. In addition to the proposed Gore order, he notes, the Supreme Court recently decided that agencies must engage in so-called "mid-term bargaining," in which unions can initiate discussions during the life of labor contracts over issues not included in the original contracts.

"We are in for a tremendous amount of litigation," Shaw says. Unions now "literally can lock up an agency and throw away the key."

Arguments such as these are "specious," says Tobias, who says he has been working "for some time" to get the administration to reiterate its commitment to (b)(1) bargaining. "Managers have been able to avoid confronting the reality of having to bargain over this," he says. "I see [Gore's memo] as a real shot in the arm for pushing managers and union leaders off the diving board and into the water." To Tobias, if these issues don't come to the table, partnership won't necessary fail, but neither will the effort achieve its potential.

It's still not clear whether the concept of partnership will have staying power. Tim Chamberlin, president of the NTEU Montana local at the IRS, says that early partnership efforts within his district were "enormously successful" in dealing with substantive matters-even subjects traditionally handled only by management, such as budget and security. But a five-state partnership formed in 1997 to reflect the IRS' consolidation of district offices has been much less productive, he says.

Nevertheless, Chamberlin says he would never abandon the concept of cooperative relations. "If you look at the big picture of employee-management relations, partnership represents a turning point in the history of how we view labor's role," he says. "We would be crazy as labor leaders not to recognize that."

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It's Your Right

Susannah Zak Figura — Tue, 01 Jun 1999 00:00:00 -0400

Federal employees have the right to:

Form, join or assist any labor union, or refrain from such activity, freely and without fear of penalty or reprisal.
Act as a representative of a labor union and, in that capacity, present the union's views to agency heads, Congress and other authorities.
Through an elected representative, engage in collective bargaining on conditions of employment-personnel policies, practices and issues, whether established by rule, regulation or otherwise, that affect working conditions.

Federal managers have the right to:

Determine an agency's mission, budget, organization, number of employees and internal security practices.
Hire, assign, direct, lay off and retain employees, or suspend, remove, reduce in grade or pay, or take other disciplinary actions against employees.
Assign work, make determinations on contracting out and determine personnel needed to operate agency.
Take any necessary actions to carry out agency mission during emergencies.

Management rights-known as (b)(1) subjects-that management may elect to negotiate with unions:

Numbers, types and grades of employees or positions assigned to any organizational subdivision, work project or tour of duty.

Technology, methods and means of performing work.

Source: Title 5 of the U.S. Code

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Fair Game

Susannah Zak Figura — Sat, 01 May 1999 00:00:00 -0400

Not everyone likes their decisions, but Merit Systems Protection Board members and their legal team play a critical role in protecting the rights of employees and managers alike.

By Susannah Zak Figura

sfigura@govexec.com

onstance Weiss, administrator of an Immigration and Naturalization Service processing center in Miami, insisted she was just following orders when she released and moved extra detainees from her facility just in time for a June 1995 congressional delegation visit. The Krome Service Processing Center, which houses immigrants pending processing or deportation, was well over its capacity, with close to 400 people squeezed into a camp designed for 210. Faced with complaints from public health officials, managers were discussing options for reducing the population.

The planned fact-finding visit of the Congressional Task Force on Immigration Reform spurred things on. Valerie Blake, deputy director of the Miami district office, ordered Weiss to reduce the population by the time of the visit. Within 48 hours of the task force's arrival, 149 people either were moved to other locations or released. Weiss kept supervisors informed of her actions via e-mails that also were forwarded to regional executives, including Deputy Regional Director Michael Devine. In one message, Weiss noted that the extra detainees had been "stashed out of sight for cosmetic purposes."

What followed were months of career-damaging allegations of wrongdoing and deception. A letter from frustrated Miami INS employees to task force chairman Rep. Elton Gallegly, R-Calif., launched an 11-month investigation by the Justice Department inspector general. The release of 54 people into the local community "was a direct response to a decision by senior INS managers at the regional and district levels to move aliens out of Krome so that the delegation would not see overcrowding at that facility," concluded Inspector General Michael Bromwich in his report to Congress, which also outlined other alleged deceptions. Creating such false impressions harms Congress' ability to formulate policy and oversee executive branch operations, he wrote.

The Justice Department fired Blake and demoted Weiss and Devine. Three promising careers were crumbling; three professional reputations were mired in scandal. That is, until the managers took their cases to the Merit Systems Protection Board. In separate decisions, three different MSPB administrative judges exonerated Weiss and Devine, and reduced Blake's penalty to suspension and demotion.

In the Weiss case, the judge ruled she wasn't at fault because she was merely following orders. Devine was said to be too far removed from the events to be held responsible. Besides, Devine received 60 to 80 e-mails a day, requiring him to scan messages quickly. He easily could have missed the troubling "for cosmetic purposes" phrase that would have signaled wrongdoing, the judge said.

In Blake's case, the administrative judge upheld all charges but, in light of her exemplary performance record, determined that the agency's penalty was excessive. Blake's urging of Weiss to remedy the overcrowded conditions before the delegation came wasn't intended to deceive, but rather was an "overzealous effort to present a 'sharp-looking, heads-up group of employees doing their jobs,' " the judge concluded. Justice appealed this ruling to the full, three-member MSPB, which reviews the decisions of its administrative judges. Stressing that Blake's actions came in response to high-level agency orders to do "whatever it takes" to reduce the population, the board not only affirmed the judge's general findings, but further reduced the penalty.

Infuriated by the decisions, Gallegly and House Immigration Subcommittee Chairman Lamar Smith, R-Texas, accused the board of making "imbecilic rulings." The IG had equally harsh but more substantive words. "The absence of accountability and common sense permeates these decisions," Bromwich wrote in an October 1998 letter to Gallegly and Smith. "The administrative judges and the MSPB excused managers because they were merely subordinates who could not be held responsible for following orders of supervisors, while at the same time excusing other managers on the theory that they could not be expected to know what their subordinates are doing. . . . I regard the results as disappointing, unsatisfactory, and, in the end, wholly unacceptable."

Critical Role

Few MSPB decisions have generated such controversy. And if one accepts the board's reasoning, few better illustrate how critical the MSPB can be to a civil service career. Weiss isn't the only federal manager to frantically carry out orders that, if given more serious thought, might be discarded as inappropriate. At the same time, a lot of federal executives who, like Devine, get bombarded daily by e-mail have scanned some messages faster than they should have, making them vulnerable to accusations that they knew of wrongdoing when in fact they didn't. Blake's situation, where a manager eager to solve a problem perhaps puts too much pressure on subordinates to find a solution, also is not unusual.

Managers often complain that the appeals process adds a procedural hurdle that makes disciplining problem employees more of a bureaucratic nightmare. Yet they too are protected by the system, as the INS cases show. It's a conflict inherent in due process rights. "If you go back to the beginning [of the merit system], there's been this tension between having absolute discretion by the executive and deciding what level of constraint you put on the executive, the President," notes MSPB Chairman Ben Erdreich. "The tension is part of the system."

Protecting federal employees from becoming fall guys for inappropriate decisions made by an agency's political leaders--which some observers believe played a part in the cases against Weiss, Blake and Devine--is also part of the system. As employment attorney G. Jerry Shaw puts it, "The reason in good part that the Merit Systems Protection Board exists is to protect employees, managers and everyone else from the vagaries of the political process." Shaw is a partner with the Washington law firm Shaw, Bransford, Veilleux and Roth.

The Process

Despite the recent uproar surrounding the INS cases, there's general consensus among Congress, agencies and employees that the agency does its job well. "The Merit Systems Protection Board, on balance, is something federal managers view very positively," says Mark Gable, legislative director for the Federal Managers Association. The courts appear to agree. In fiscal 1998, 92 percent of board decisions reviewed by the U.S. Court of Appeals for the Federal Circuit, to which final board decisions may be appealed, were upheld.

Even employees who lose their cases generally have a favorable opinion of the MSPB, says Shaw, who has represented both agencies and employees before the board. The unbiased review provides resolution to cases, allowing employees to move on with their lives, he says.

Still, it can be a grueling process. As with other types of litigation, MSPB hearings are adversarial duels between agency and employee, both of whom may feel wronged. The hearing itself usually comes only after months and sometimes years of investigation and discussion at the agency level. Once a manager proposes disciplinary action against a subordinate, the agency-sometimes via the inspector general- investigates allegations. Based on those findings, the agency decides whether to formally order the proposed action. Dissatisfied employees must file their appeal with the MSPB within 30 days of the action's effective date.

That filing sets in motion a pretrial discovery process, in which both sides exchange documents and depose potential witnesses, any of whom may be subpoenaed to testify. Initial hearings can take as little as an hour and as long as several days, depending on a case's complexity. A board-imposed 120-day standard, which starts the day an appeal is filed and ends when an administrative judge renders a decision, keeps the process on a fast track. Further appeal to the full board adds about seven months to the process.

For employees who hire attorneys, it can be an expensive ordeal. Attorneys fees for average cases run between $30,000 and $50,000, with complicated cases costing as much as $100,000. "It is a lot of money, and people have a lot at stake," Shaw says, noting that many people have their identities tied up in their jobs. Liability insurance--which costs about $300 a year and is subsidized by some agencies--can make a big difference. "It's a lot easier representing an employee if you know you're not going to bankrupt him," Shaw says. Employees who win their appeals often are awarded payment of legal fees.

Although managers who order disciplinary actions have in-house agency attorneys to handle their side of the case, the process isn't much easier for them. Within agencies, cases tend to become institutional, notes Shaw. For example, the agency must juggle investigations of the manager and employee, maintain objectivity and be ready to respond to potential political repercussions of an adverse action. Sometimes officials decide that, no matter how much time and effort a supervisor has spent documenting the behavior of a problem employee, a case simply isn't worth pursuing.

As Shaw describes it: "The focus becomes the agency, not the individual. The manager sits alone. That is a very uncomfortable place to be. It feels like the agency is not backing him up because it doesn't have his interests in mind. It has the agency's interests in mind."

To reduce the amount of animosity between agencies and employees, administrative judges urge settlement whenever they can, Erdreich says, noting that more than half the cases filed with the board are settled. In cases that go all the way to a hearing, there is a winner and a loser, but when parties settle, people can get back to work and both sides win, he adds.

Losing Rights?

Some federal employees-hose in the military and CIA agents, for example-have never had MSPB appeal rights. But only Federal Aviation Administration employees have actually had those rights taken away. In 1995, when Congress cut FAA loose from the civil service system governed by Title 5 of the U.S. Code, FAA had to create an entirely new personnel structure, including an appeals mechanism.

What they came up with is called Guaranteed Fair Treatment. Cases are decided by a three-person panel: The employee selects one person, management selects another and a third-party arbitrator is jointly selected from a list of qualified people compiled by the agency. No formal discovery process exists, although relevant documents typically are exchanged, and witnesses may testify but they may not be subpoenaed. Employees dissatisfied with the outcome may appeal to a circuit court of federal appeals.

Many observers, including the Federal Managers Association, which is fighting to get MSPB appeal rights reinstated at FAA, consider the new process unfair. FMA fears that because panel decisions don't have to be based on precedent, they may be inconsistent. Furthermore, having decisions appealable to 13 circuit courts of appeal "could lead to the unintended consequence of having different bodies of case law apply to FAA employees depending on where they work," FMA's Gable says. There's also no provision for awarding attorneys fees to employees who prevail, he notes.

But the biggest problem with the appeals process, Gable says, is that it's not conducted by a fully independent body. In his view, the FAA's new system recreates one that was "discredited and corrected 20 years ago." Congress never should have eliminated the FAA rights, he adds. "It doesn't make sense to reinvent something that's already working well."

FAA's new system is "a farce," agrees Shaw. "The perception of fairness is every bit as important as fairness itself," he says. "Employees need to have the ability to achieve closure and they can't do it if the system appears stacked." Shaw's law firm challenged the constitutionality of the process before the District of Columbia Circuit Court of Appeals. But the court found that FAA's new system "fully satisfies the requirements of procedural due process."

FAA officials stand by Guaranteed Fair Treatment. "The system we have is independent," because the third vote comes from an outside arbitrator, says Glenda Tate, FAA assistant administrator for human resources management. Of the 21 cases decided so far, 12 agency actions were sustained, seven were mitigated and two were reversed. While it's still too soon to make conclusive judgments, comparing these numbers with those of the MSPB-which in fiscal 1997 sustained nearly 70 percent, mitigated 4 percent and reversed 26 percent of agency actions in cases it adjudicated-suggests that the FAA system is indeed fair, Tate says.

Tate acknowledges that some people don't consider the new structure as independent as the MSPB. The agency is considering giving employees a choice to appeal either internally or to the MSPB. If Congress passes legislation on the matter, as the Federal Managers Association and the Senior Executives Association hope it will do, FAA will urge lawmakers to permit this option, Tate says.

An FAA reauthorization bill approved by a House panel in March would give employees the choice Tate advocates. The Senate version simply reinstates the MSPB appeal rights. It was unclear at press time how the bills ultimately would fare. Similar legislation passed the House and Senate last year but died in conference over other more contentious issues.

While he is careful not to speak specifically about the FAA system, board chairman Erdreich insists independent review is critical to preserving due process rights. "It doesn't have to be [the MSPB]," he says. "But it has to be in my view some independent agency or entity. . . . Otherwise you would slide back, I think, rapidly to a system that no one wants to see again, which would be the old spoils system, where coercion and pressure is put on employees."

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