The General Accounting Office says many agencies that are contracting out work to the private sector are wasting money and violating rules by paying severance to U.S. aides who lose their federal jobs but go to work for the contractors.
Over the past three years, Army, Navy and Air Force have contracted out 11,600 jobs to private firms. Thousands of positions in Defense, Health and Human Services, General Services Administration, Transportation, Interior and the Veterans Administration are being reviewed to see if they can be turned over to private industry.
The Reagan administration is anxious to have more "commercial service" jobs (similar to those performed in industry) moved out of government. It estimates there are at least 200,000 federal jobs that meet its guidelines for contracting out.
Although a 15-year-old government rule prohibits severance pay for federal employes hired by contractors who take over their jobs within 90 days, GAO auditors say eight of 10 agencies they studied had paid the severance anyhow.
GAO made the study for Sen. David Pryor (D-Ark.). He heads the Senate civil service subcommittee.
GAO said that many federal personnel officials claimed they were unaware of the 1967 no-severance rule.
Federal workers who lose their jobs through no fault of their own are entitled to severance pay (depending on length of service) of up to one year's salary. GAO said the average severance payment is $6,160.
It has recommended that agencies require contractors to notify them if they hire displaced federal workers to avoid improper severance payments.
Meantime, Rep. Sonny Montgomery (D-Miss.) has written the GAO asking why the government is sending 14 civilian and military experts to a conference here telling federal officials and contractors "how to make contracting out work." Two members of the 24-man government/industry "faculty" are from the GAO.
The session, sponsored by the National Institute for Management Research, will be held here June 29 to July 1 and will cost each participant $495.
Montgomery, who heads the House Veterans Affairs Committee (which is concerned about in-house VA work being contracted to the private sector), said, "I seriously question the propriety of GAO and other federal officials instructing government employes on federal contract regulations through private corporations charging substantial fees." He has asked GAO to check and see if its planned participation in the seminar violates any federal conflict-of-interest laws.