Federal workers and their unions have been dealt a major setback in their fight to restrict the right of government agencies to contract out work to the private sector.
Acting in a case that has been in the legal pipeline since 1967, the Supreme Court yesterday refused to hear a challenge to the power of the Space Agency (NASA) to enter into support service contracts, such as telephone communications, custodial workers and private guards.
Although limited to NASA and its 11-year fight with the American Federation of Government Employees, the case (Lodge 1858 AFGE vs. NASA) it has broad implications for the rest of the federal service. This is particularly true since President Carter has ordered cuts in federal employment while Congress has increased the workloads of many agencies.
The union challenged a NASA reduction-in-force (RIF) in which a group of federal workers were fired, while contract employes were retained for duty at the Marshall Space Center in Alabama. Federal unions and veterans groups have long contended that the government cannot turn over jobs normally done by civil servants to private contractors.
Government officials have argued that agencies have open-end authority (limited only by funds and congressional approval) to contract out for services, as long as an employer-employe relationship between government and the contractor is avoided.
The issue of contract employes is vital to every federal worker, and to private business. Nobody knows how much money the government pays private contractors for all services. One estimate used by government puts the price tag at around $80 billion. It has been estimated that support personnel supplied government by private industry account for between $6 billion and $10 billion each year.
Federal employe unions argue that most work by government agencies is performed better, and at less cost, in-house. They say having federal workers do the jobs gives government greater control.
Private industry groups make much the same argument, contending they can work cheaper and more efficiently in many areas than federal workers, and that contracts can be terminated when the job is finished.
The Supreme Court's refusal to hear the case gives NASA a clean bill of health on its earlier contracts and actions. In the opinion of some experts it will make it much more attractive for federal agencies in the future to contract out work to avoid expanding their own staffs during the period of President Carter's partial hiring freeze in government.