Privatization battle centers on definition of federal employee

The government's largest labor union is challenging an Air Force pilot program to privatize food service jobs at six bases across the country.

The American Federation of Government Employees claims the plan would adversely affect hundreds of civilian federal employees who work as low-wage cooks and busboys at base dining halls, bowling alleys, child care centers and golf courses. But the Air Force says those fears are unfounded and maintains its Food Transformation Initiative does not target federal positions.

The dispute essentially boils down to determining who exactly is a federal employee. Typically, if an agency wants to consider outsourcing work, it must conduct a competition under Office of Management and Budget Circular A-76 to determine whether its employees or contractors can perform the work most efficiently and at the lowest cost to taxpayers. But Congress has put a moratorium on new public-private competitions.

The Air Force sought to avoid this roadblock by privatizing only positions considered to be filled by nongovernment employees. The jobs at immediate risk are filled by nonappropriated fund employees, who are paid from a base's general operating funds rather than congressional funding. The service argues federal regulations specifically exclude nonappropriated fund employees from the definition of civilian employees.

"An A-76 study has not been conducted because it is not required," said Michael Teal, chief of food service policy for Air Force Services. "The transformation will not outsource existing functions, but will reorganize the management of functions which are already contracted out. All existing Air Force dining facilities in the continental United States, with the exception of the Air Force Academy, already have food service contracts."

The Air Force plan would put a single contractor in charge of food and beverage service, preparation and clean up at six bases: Elmendorf in Alaska; Travis in California, Patrick and MacDill in Florida, Fairchild in Washington state, and Little Rock in Arkansas. Displaced nonappropriated federal employees would be offered priority consideration in performing the work for the contractor, Teal said.

Last October, the Air Force published a draft request for proposals seeking bids for the work. The service had expected to award a contract by August, but before officials could consider proposals, AFGE filed a protest with the Government Accountability Office, challenging the plan's legality. AFGE cited past GAO rulings it claims broadened the definition of federal employees to include both appropriated and nonappropriated workers. The union also argued appropriated employees would in fact be affected by the Air Force plan.

"This action by the Air Force to bypass the A-76 process gives you no cost comparison to prove this contracting out action saves the taxpayer money," said AFGE National President John Gage. "If there are no proven cost savings and no proven benefits for service members, then there is absolutely no justification for putting hundreds of federal employees out of work."

In May, the Air Force filed a motion to dismiss the protest, arguing GAO did not have jurisdiction over the transition because it involves only nonappropriated employees. GAO declined the request and has until Aug. 16 to settle the case, according to an agency spokeswoman.

The union says about 300 appropriated and nonappropriated employees nationwide will be adversely affected by the initiative, including federally paid cooks whose jobs could be phased out within two years.

"Contrary to the Air Force's assertion, both appropriated and nonappropriated funds and employees will be used and appropriated fund employees will lose their jobs," wrote John Santry, president of AFGE Local 1764 in Texas, in response to the motion to dismiss.

Among those who could find themselves out of work are 32 nonappropriated workers at Elmendorf who make between $10 and $15 per hour. "These men and women, many of whom are veterans themselves, take pride in servicing our uniformed personnel," said David Owens, president of AFGE Local 1101 in Alaska. "The actions being taken by the Air Force are callous and ill-conceived."

Sen. Mark Begich, D-Alaska, secured language in the fiscal 2011 National Defense Authorization Act requesting GAO study the Air Force's plan.

"He thinks it is important to look at the cost [or] cost savings, impact on the service members and the employees before moving forward," said Begich spokeswoman Julie Hasquet.

Congress also has directed the Air Force not to expand the pilot program until GAO's investigation is complete. If the program were adopted nationwide, 4,000 food service workers could lose their jobs, the union said.

The Air Force, however, said the initiative must move forward. Its food preparation program has not changed significantly in 60 years and needs to be more comprehensive, flexible and accommodating to service members, Teal said. The plan would add a more diverse selection of meals and better quality food, he said.

"Our existing military dining facilities and clubs were sized for Cold War-era airmen populations and are now underutilized with costs to provide meals exceeding those in the private sector," Teal said. "Customer surveys indicate that airmen are dissatisfied with menu variety and operating hours of Air Force dining venues."

Currently, several contractors provide food service across the Air Force. A lack of contract dollars and low utilization rates has led the service to close 18 dining facilities in the past five years. Other facilities also could be on their last legs, officials said.

An Air Force business case analysis identified potential cost savings from transitioning to a single contractor model. But without evaluating contract proposals, the service said it can't pinpoint the cost of transitioning the work at the six bases.

AFGE officials have written to Air Force Secretary Michael Donley requesting a meeting to discuss their concerns, but have thus far been rebuffed. "This entire process has been mired in secrecy," Gage said. "It is the antithesis of the type of open, transparent contracting process that Congress mandated when it reformed federal outsourcing."