Pentagon will have to shed thousands of jobs during next few years under bill

The Pentagon will have to shrink its civilian and contractor workforces by thousands of jobs during the next five years under a provision in the fiscal 2013 Defense authorization bill that House and Senate conference negotiators approved on Tuesday evening.

The legislation directs the Defense secretary to rebalance and reduce the civilian and contractor workforces from fiscal 2012 through fiscal 2017 by a rate that is at least equal to the percentage of funding saved from planned troop reductions, or 5 percent. The bill also gives the Defense Department discretion over whether to exempt certain mission-critical jobs, including medical services and maintenance of military equipment, from the cuts. The provision means the department could shed up to 36,000 jobs during the next few years.

The civilian and contractor workforces each would have to reduce their rolls by 5 percent, according to a summary of the conference report from the Senate Armed Services Committee.

The provision, however, calls on the Pentagon to ensure that the civilian and contractors workforces are “appropriately sized” with the military force to carry out the department’s mission and to find “the most appropriate and cost-efficient mix of military, civilian, and service contractor personnel.”

The language in the conference report, filed Tuesday by House-Senate negotiators, outlines a more strategic framework for carrying out the cuts than the original provision in the Senate version of the Defense authorization bill. The Senate provision, inserted by Sen. John McCain, R-Ariz., was criticized by the American Federation of Government Employees and the Pentagon for directing arbitrary, across-the-board personnel cuts that didn’t take into account the department’s workforce needs. The original House version of the bill did not contain language to reduce civilian and contractor personnel.

Last week, Washington-area House lawmakers sent a letter to House and Senate conference negotiators asking them to drop the provision.

“I’m disappointed that efforts to strip the language in conference were unsuccessful, but encouraged that some of the changes made give the Department of Defense more flexibility than existed in the original bill,” Rep. Chris Van Hollen, D-Md., said in an email statement. “I am confident that [Defense] Secretary [Leon] Panetta and his successor will not implement the arbitrary cuts to civil employees proposed in the initial McCain amendment.”

The department has 120 days from the enactment of the Defense authorization bill to put together a downsizing plan and send it to Congress. The conference report also directs the Pentagon to provide status updates from fiscal 2015 through fiscal 2018 on the workforce reductions.

The reduction in military personnel resulting from the end of the Iraq war and the drawdown in Afghanistan originally prompted McCain to include the language to also shrink the civilian workforce and contractors by a rate equal to the percentage of funding saved from planned troop reductions. Defense is decreasing the active-duty and reserve force by 31,300 between fiscal 2012 and fiscal 2013.

The Pentagon already planned to reduce the civilian workforce by more than 10,000 between fiscal 2012 and fiscal 2013; a fiscal 2010 cap on civilian personnel remains in place. That cap does not apply to contractors.

AFGE said in statement that is was “deeply disappointed by the inequitable approach taken to workforce management policies by conferees.” The union said that the cuts will hit civilian personnel harder than contractors because the Pentagon lacks an inventory of contract services, so it can’t reliably identify those reductions. “That means civilian personnel costs can be identified and controlled, but service contractor costs cannot,” the statement said. “And, inevitably, this means that the cuts are far more likely to be carried out on civilian personnel and less so on contractors, even though the civilian workforce is cheaper and smaller.”

Downsizing the civilian workforce should be done “intelligently and courageously,” AFGE said.

The group representing federal managers urged the Pentagon to consult with frontline managers on personnel cuts. “It is imperative that any reductions in civilian personnel are done strategically to minimize disruption and to ensure the Department of Defense’s missions are not compromised,” said Patricia Niehaus, national president of the Federal Managers Association.

The massive $633.3 billion bill also contains several provisions related to military pay and benefits. It authorizes a 1.7 percent pay raise for service members in 2013, and rejects an Obama administration proposal calling for higher fees on pharmacy drug co-payments under TRICARE. Specifically, the bill caps pharmacy co-pays beginning in 2014 so that such fees are in line with the annual retiree cost-of-living adjustment. The costs associated with the fee increases would be offset by a five-year pilot program requiring TRICARE for Life recipients to obtain maintenance drug refills through the mail, which is cheaper than obtaining them through retail pharmacies.

“This year, Congress agreed with us that it’s time to put that COLA-based standard in law for adjustments to TRICARE pharmacy copays,” Kathy Beasley, deputy director for government relations at the Military Officers Association of America, said in an email. “What this does is protect this core military benefit from arbitrary and dramatic year-to-year changes based on budgetary whims of Pentagon leaders.” She said that while they are not “fans of mandatory mail-order use,” MOAA felt the need to support the initiative to help pay for the cap on co-pays.

The Defense authorization bill conferees crafted also establishes a commission to review military compensation and retirement benefits, enhances suicide prevention and sexual assault prevention programs in the military, and authorizes the department to pay for abortions in cases of rape and incest.

The House and Senate are expected to vote on the bill this week.