Army considering major privatization
By Christopher Lee
Washington Post
WASHINGTON — The Army is considering whether to contract out nearly 214,000 military and civilian employee positions in what would be the largest transfer of jobs to the private sector by a government agency, Pentagon officials said.
If successful, the Army's initiative — undertaken in the name of focusing more of the military's resources on national defense — could affect more than one in six Army jobs around the world. And it could provide a major boost to the Bush administration's efforts to move large blocs of government work into the private sector.
Although similar attempts to privatize government jobs date back decades, the Army plan is much more ambitious. On the line are the jobs of 58,727 military personnel and 154,910 civilian employees who perform such support functions as accounting, legal counsel, maintenance and communications.
Army Secretary Thomas White wrote in an Oct. 4 internal memo that the Army needs to direct as many resources as it can to anti-terrorism efforts and let support jobs go to the private sector, where the administration believes they can be done at lower cost.
"The Army must focus its energies and talents on our core competencies — functions we perform better than anyone else — and seek to obtain other needed products or services from the private sector where it makes sense," White wrote in the memo.
All told, the Army currently employs about 1.3 million people, including 222,000 civilians.
Federal unions denounced the Army plan as a thinly veiled attempt to do away with their jobs and benefit defense contractors. And some analysts said it raised questions about the Defense Department's capability to adequately manage its growing work force of contract personnel.
"It's not about saving money, it's about moving money," said Bobby L. Harnage Sr., president of the American Federation of Government Employees. "They're going to turn over as many jobs as they can to these contractors, who are their major political contributors. ... Their mission is to privatize. They don't give a damn about national security."
The Army says it is examining ways to trim the public payroll of jobs determined not to be central to its mission of national defense. One established method is to allow defense contractors to compete with Army employees to see who could do a particular job best and at the lowest cost. The process, which requires a comprehensive economic analysis, can take years — but could result in a decision to keep the jobs in-house.
Other options under consideration include creating public-private partnerships and quasi-governmental corporations, directly moving jobs to the private sector, and simply wiping out some job categories altogether. But some of the methods aren't permitted by law and will require new legislation from Congress.
Military personnel whose jobs are affected would be reassigned to other duties within the Army. Officials, acknowledging that layoffs are possible, said they would try to help civilian workers move with their jobs to private contractors or land assignments elsewhere in the government.
"We're not just throwing people out on the street," said Lt. Col. Ryan Yantis, an Army spokesman. "We're very committed to doing the right thing in stewardship for both money, people and our mission."
A similar review of 25,000 Army positions in the 1980s led to about 15,000 jobs being moved to the private sector, with the rest remaining in-house, officials said.
In another review of 33,000 posts begun in the late 1990s, 6,300 jobs were converted to private-sector work, 6,800 were kept in the government and no final decisions have been made on the rest.
Officials said 375 civilians had been laid off since 1998 in earlier rounds of privatization.
The Army's new plan, first reported by Government Executive magazine, is in keeping with President Bush's directive last year that agencies increase the amount of work deemed not "inherently governmental" that is contracted out or put up for competition between the public and private sectors.
Bush's plan calls for the Pentagon to have "competed out" 15 percent of all such jobs, or directly convert them to private-sector contracts, by the end of fiscal 2003. The administration's ultimate goal is to put 425,000 jobs government-wide up for such competition.
So far, 20,000 to 40,000 jobs in 26 major agencies have been put up for competition or directly converted to the private sector, said Angela Styles, administrator for federal procurement policy at the Office of Management and Budget.
Styles said most of the reviews were continuing and she did not know exactly how many positions had actually moved to the private sector.
"You'll probably see an increase in that as agencies start to make performance decisions," she said, "but that doesn't mean that they (all) go to the private sector. More than half of these competitions are won by the public sector."
