Union 1, Pentagon 0

EXECUTIVE MEMO

Union 1, Pentagon 0

rivatization efforts at Defense were dealt a blow when Congress elected to retain the "60-40 rule" that requires 60 percent of core logistics support be performed by government employees.

House and Senate conferees considering the 1997 Defense authorization bill rejected a Pentagon proposal to eliminate the rule and broaden the definition of core functions. Deputy Secretary of Defense John White championed the proposal, which would have given the Defense Department flexibility in contracting out depot maintenance.

Defense officials predicted in-house depot work would fall to 56 percent in the Army, 51 percent in the Navy and 46 percent in the Air Force if the rule was rescinded.

Officials from the American Federation of Government Employees, which represents many of the depot workers, were elated. "Eliminating assurances that 60 percent of critical military hardware maintenance is performed in secure, stable government installations by experienced, reliable federal employees would have allowed the wholesale privatization of our defense depots," said John N. Sturdivant, the union's national president.

Privatization of maintenance functions, Sturdivant believes, would degrade military readiness and cost taxpayers more.

Pentagon officials disagree. Contracting out work would save money and increase efficiency, White said earlier this year.