Study offers four options for fate of GSA warehouses

A independent contractor has completed a study looking at ways to improve the financial condition of the General Services Administration's Federal Supply Service warehouse system, the commissioner of FSS told agency employees this week. The study brings GSA one step closer toward making a decision on the fate of the warehouses and the 2,000 employees who work in them.

In January, GSA hired an outside consultant to review the financial health of its supply warehouses. GSA last summer announced it would close the eight warehouses in FSS's stock program. The American Federation of Government Employees has been fighting that decision ever since, and convinced GSA Administrator David Barram to hold off on the closures until an independent study of the warehouses' future was completed.

The study, produced by consultants from the Logistics Management Institute of McLean, Va., analyzed the GSA stock program and presented four options for making it more efficient and financially solvent.

The first option, called "a more efficient status quo," recommends ways of improving the current stock program without closing any facilities. The second option involves closing one or more of the warehouses while streamlining program operations. Option three would contract out some of the work to a private vendor, and the fourth option is to close all of the warehouses.

Both parties acknowledge that the report is not the final word on the fate of the stock program.

"The study lays our four general alternatives and says what to look at when comparing them. There's an infinite number of variations. What the parties need to come to an agreement on is the best variation," said AFGE spokesman Phil Kete.

In a memo to GSA employees, Federal Supply Service Commissioner Frank Pugliese also said GSA might choose a course of action not included among the four options.

One solution not listed, for example, is a staged change, in which warehouse facilities are shut down over a period of years, Kete said.

Options three and four involve outsourcing under Office of Management and Budget Circular A-76, a time-consuming alternative Kete says GSA probably wouldn't want to deal with.

AFGE officials believe the final decision will likely fall somewhere within options one and two, because the stock program has a lot of inefficiencies that could be corrected. "It is pretty clear to us that the savings necessary to make the stock program viable are achievable. We are not insisting necessarily that all eight facilities remain open," Kete said.

Pugliese did not indicate any leanings toward a particular option, but said "the analysis leaves no doubt that substantial, durable and long-term changes must be made, likely through some combined approach or variation of the alternatives."

Discussions between the two parties have come a long way since last July, when GSA announced it was shutting down the warehouses and AFGE filed an unfair labor practice charge with the Federal Labor Relations Authority.

GSA is no longer insisting on a total warehouse shutdown, and Kete said discussions are, "at the moment, consistent with partnership."

"It's a big change from last summer. Now, there seems to be recognition that the stock program can be improved," Kete said. He cautioned, however, that "partnership is as partnership does," indicating that the relationship between the two parties still hinges on what happens to the warehouses.

Pugliese pledged to work with employee unions "to ensure GSA employees and their interests are carefully considered throughout the development of any final plan on the future of GSA's supply system."