Coast Guard proposes government corporation to meet outsourcing goals

In a bid to comply with the Bush administration's competitive sourcing initiative, the Coast Guard is planning to turn a 99-person office in West Virginia into a government corporation.

But the Office of Management and Budget has yet to sign off on the plan, which would not give companies a chance to compete for any federal jobs at the office, the National Vessel Documentation Center in Falling Waters, W.Va. The office documents the nationality of vessels that fish or trade in U.S. waters.

As a government corporation, the NVDC would set its own budget and be exempt from federal personnel and procurement rules. Congress has created more than 20 government corporations, including Amtrak, the Tennessee Valley Authority and the U. S. Postal Service.

Because it would shift no jobs to companies nor allow for public-private competition, the Coast Guard plan tests the limits of what OMB is willing to count as a valid competitive sourcing project. OMB needs to review the Coast Guard proposal before it can pass judgment, according to Jack Kalavritinos, associate administrator of the Office of Federal Procurement Policy at OMB.

"OMB has not reviewed the Coast Guard's plan in terms of its competitive sourcing goals. We'll be doing so shortly," he said. The Coast Guard is relying on converting the jobs of NVDC's 99 employees as part of its competitive sourcing plan, which puts 374 jobs up for competition.

Besides winning OMB support, the Coast Guard will need legislative approval to turn the office into a government corporation. Sens. Robert Byrd, D-W.V., and Jay Rockefeller, D-W.Va., already have told Coast Guard Commandant Thomas Collins and OMB Director Mitch Daniels that they are concerned about the plan. Byrd was instrumental in moving the NVDC to Falling Waters in 1995.

"I do not understand why the Coast Guard and OMB would pursue a change in status of the NVDC given its strong record of performance," Rockefeller wrote in an Oct. 25 letter to Daniels. OMB is still reviewing the letter, according to spokesman Michael Toth.

Government corporations can take many forms, and Tom Willis, the director of NVDC, hopes to design it so that employees could still receive federal benefits.

"We would hope to set it up in a way that allows people to be involved in the current federal retirement system," he said. Willis added that he saw no reason why employees would not be able to unionize in the new corporation.

Willis also wants the flexibility to hire temporary employees who could help in the spring and summer, when the workload increases because recreational boaters register their vessels. He does not anticipate any layoffs from this process. "I'm very concerned about my people," he said. "I don't think this is a losing issues for the employees."

But the president of the local labor union said bringing in temporary employees would be a first step to firing career staff. "That will not help the career employees here," said Demetrious Stroubakis, president of American Federation of Government Employees Local 43.

NVDC employees, some of whom went through downsizing in the Defense Department in the 1990s, are anxious about their jobs, he added. "People are very afraid because there aren't a lot of good paying jobs in this area," said Stroubakis. "We had a lot of people who came to us from [reductions-in-force] at Fort Letterkenny, in Pennsylvania and Fort Dix, N.J., and they thought they would find a stable secure job here, and those bets are off."

Additionally, employees worry that making NVDC a government corporation could lead to outright privatization, according to Stroubakis. The last government corporation to be created -- the U.S. Enrichment Corporation, formed in 1992 -- was completely privatized in 1997.

Coast Guard leaders believe NVDC would succeed as a government corporation because it charges fees to document vessels. In recent years, the office has turned a profit, which is returned to the U.S. Treasury. If the NVDC was a government corporation, it could reinvest this profit in new equipment, Willis said.

The Coast Guard also favors the government corporation model because outsourcing the work might be more expensive. A March 2000 report by the Bradson Corporation, a consulting firm based in Arlington, Va., found it would be 30 percent more expensive for companies to perform NVDC's work. The Bradson report urged the Coast Guard to convert NVDC into a government corporation.