At least 1,400 employees will lose their jobs in the next two years as the General Services Administration closes the eight warehouses where it stocks supplies for federal agencies, GSA officials announced Thursday.
The government's central procurement agency is automating its handling of customer orders and moving toward a system in which most supplies will be delivered directly from vendors to agencies. Up to 2,000 GSA employees could be affected by reductions-in-force (RIFs) as the warehouses close and federal bump-and-retreat rules take effect.
"Our job at GSA, and we take it seriously, is to provide the most effective ways to move supplies to our customers," said GSA Administrator David Barram. "Distribution centers are not the only way to do that, and do not represent the future for us."
Beginning in October, the distribution center in Burlington, N.J., and four smaller supply centers in Auburn, Wash., Franconia, Va., Chicago and Denver, will close. Within the next two years, the remaining warehouses in Stockton, Calif., Palmetto, Ga., and Ft. Worth, Texas, will close.
Employees at the warehouses learned of their fate Thursday from their regional administrators.
Bruce Williams, spokesman for the American Federation of Government Employees Council of GSA Locals, said the union was "blindsided" by the GSA decision to close the warehouses.
Williams said the union immediately filed an unfair labor practices charge with the Federal Labor Relations Authority as well as a petition for a temporary restraining order to block the closings.
"GSA's actions violate its duty to bargain with us over a change in working conditions," Williams said.
Gail Lovelace, GSA's chief people officer, promised to offer a comprehensive career transition assistance program to employees. GSA will also ask Congress for buyout authority and ask the Office of Personnel Management to extend its ability to offer employees early retirement, Lovelace said.
"We're going to make sure we give people all the information they need to make the best decisions they can," Lovelace said. "I would imagine some people will want to retire. Some will want to take early outs. For some, we'll have to do some basic job training. We may have some people interested in more detailed computer jobs."
Lovelace, who coordinated the last major round of RIFs at GSA in the early 1980s, said RIFs can lead to positive career changes for people. Her job is to make sure as few people as possible come out of the job reductions without a choice they're happy with, Lovelace said.
GSA is no stranger to downsizing. From 1993 to 1998, the agency eliminated 6,000 positions, going from about 20,000 employees to 14,000. Until now, GSA has avoided RIFs through attrition, buyouts and early retirements.
Federal agencies that buy supplies through GSA will not notice any change, officials said. What will change is how GSA handles orders once they are received. As the first centers close, orders will be re-routed to other centers.
Officials were vague about how orders will be handled once all the centers close. They described the new order processing system as a "virtual platform" that will rely on automated systems and direct shipping from vendors to GSA's customers. GSA takes orders through the Internet, a call center network and a unique system called FEDSTRIP/MILSTRIP.
The warehouses are run by GSA's Federal Supply Service. In 1998 the warehouses and their 1,400 employees were responsible for $772 million in sales, down from $908 million in 1988. By contrast, the Federal Supply Service's supply schedules, through which agencies can order goods and services, are run by just 432 employees. The schedules were responsible for $7.7 billion in sales in 1998.
"Because the [warehouses] involve high fixed costs, we have found ourselves in a Catch-22 position of constantly having to raise our prices to break even," said FSS chief Frank Pugliese. "We will create new partnerships with the private sector and continue transitioning stock items to other sources, such as schedules."
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