The Army is considering whether to contract out nearly 214,000 military and civilian employee positions in what would be the largest transfer of jobs to the private sector by a government agency, Pentagon officials said.
If successful, the Army's initiative -- undertaken in the name of focusing more of the military's resources on national defense -- could affect more than one in six Army jobs around the world. And it could provide a major boost to the Bush administration's efforts to move large blocs of government work into the private sector.
Although similar attempts to privatize government jobs date back decades, the Army plan is much more ambitious. On the line are the jobs of 58,727 military personnel and 154,910 civilian employees who perform such support functions as accounting, legal counsel, maintenance and communications.
Army Secretary Thomas E. White wrote in an Oct. 4 internal memo that the Army needs to direct as many resources as it can to anti-terrorism efforts and let support jobs go to the private sector, where the administration believes they can be done at lower cost.
"The Army must focus its energies and talents on our core competencies -- functions we perform better than anyone else -- and seek to obtain other needed products or services from the private sector where it makes sense," White wrote in the memo.
All told, the Army currently employs about 1.3 million people, including 222,000 civilians.
Federal unions denounced the Army plan as a thinly veiled attempt to do away with their jobs and benefit defense contractors. And some analysts said it raised questions about the Defense Department's capability to adequately manage its growing workforce of contract personnel.
"It's not about saving money, it's about moving money," said Bobby L. Harnage Sr., president of the American Federation of Government Employees. "They're going to turn over as many jobs as they can to these contractors, who are their major political contributors. . . . Their mission is to privatize. They don't give a damn about national security."
The Army says it is examining ways to trim the public payroll of jobs determined not to be central to its mission of national defense. One established method is to allow defense contractors to compete with Army employees to see who could do a particular job best and at the lowest cost. The process, which requires a comprehensive economic analysis, can take years -- but could result in a decision to keep the jobs in-house.
Other options under consideration include creating public-private partnerships and quasi-governmental corporations, directly moving jobs to the private sector, and simply wiping out some job categories altogether. But some of the methods aren't permitted by law and will require new legislation from Congress.
Military personnel whose jobs are affected would be reassigned to other duties within the Army. Officials, acknowledging that layoffs are possible, said they would try to help civilian workers move with their jobs to private contractors or land assignments elsewhere in the government.
"We're not just throwing people out on the street," said Lt. Col. Ryan Yantis, an Army spokesman. "We're very committed to doing the right thing in stewardship for both money, people and our mission."
A similar review of 25,000 Army positions in the 1980s led to about 15,000 jobs being moved to the private sector, with the rest remaining in-house, officials said. In another review of 33,000 posts begun in the late 1990s, 6,300 jobs were converted to private-sector work, 6,800 were kept in the government and no final decisions have been made on the rest.
Officials said 375 civilians had been laid off since 1998 in earlier rounds of privatization.
The Army's new plan, first reported by Government Executive magazine, is in keeping with President Bush's directive last year that agencies increase the amount of work deemed not "inherently governmental" that is contracted out or put up for competition between the public and private sectors.
Bush's plan calls for the Pentagon to have "competed out" 15 percent of all such jobs, or directly convert them to private-sector contracts, by the end of fiscal 2003. The administration's ultimate goal is to put 425,000 jobs government-wide up for such competition.
So far, 20,000 to 40,000 jobs in 26 major agencies have been put up for competition or directly converted to the private sector, said Angela Styles, administrator for federal procurement policy at the Office of Management and Budget.
Styles said most of the reviews were continuing and she did not know exactly how many positions had actually moved to the private sector.
"You'll probably see an increase in that as agencies start to make performance decisions," she said, "but that doesn't mean that they [all] go to the private sector. More than half of these competitions are won by the public sector."
The Forest Service, for instance, has identified 3,035 jobs in such areas as information technology, buildings, and grounds and road maintenance that may be contracted out by next October, angering the union that represents many of its 30,000 employees.
"We think the mission should be determining what goes on here, not some arbitrary target," said Art Johnson, legislative chairman of the Forest Service Council of the National Federation of Federal Employees. "We don't think that's in the best interests of the taxpayers or the mission of the Forest Service. It seems to be contrary to the way government should be run to have a quota system."
Alisa Harrison, a spokeswoman for the Department of Agriculture, which includes the Forest Service, said the agency merely identified jobs that may be competed out. "That doesn't mean that all of them will be," she said. "We're trying to work through the process with as much sensitivity as we can."
As recently as last December, Defense Department officials also were questioning whether targets were the way to go.
In a Dec. 26 memo to OMB Director Mitchell E. Daniels Jr., Defense Undersecretary E.C. "Pete" Aldridge wrote that a reassessment "may very well show we have already contracted out capabilities to the private sector that are essential to our mission, or that divestiture of some activities may be more appropriate than public-private competitions or direct conversions."
Army officials said White's proposal does not represent a change of heart. White's memo calls for a range of options for dealing with the Army jobs, including public-private competition, direct privatization or transferring duties to another agency.
Army commands are to submit plans to White by Dec. 20 to privatize or compete all "non-core spaces," a process that Army officials said could begin as early as spring if White gives the go-ahead.
"The first of the competitions, privatizations, divestitures can, presumably, start immediately after approval," said Jim Wakefield, deputy chairman of the Army's non-core-competencies working group, which will oversee implementation of the plan. "There is no reason to delay."
Employees disagree, said Jacqueline Simon, director of public policy for the AFGE.
Simon noted that some of the options outlined by White are not permitted by law, which generally requires a competition to be a part of determining whether a government job can be done better or more cheaply by the private sector.
Indeed, White concedes in his memo that "most of these alternatives . . . will require enabling legislation that does not exist yet."
Styles, the OMB official, said the lack of competition in some of the Army's plans had caught her eye, too. "I just had them in here for an hour and a half talking about it," she said.
Styles said Bush does not want agencies to simply outsource jobs to the private sector. His model relies on competition to determine whether jobs should stay or go.
"If we don't think it fits the construct of competition, or it doesn't help us achieve the goal of providing the best service to the taxpayer, within whichever sector, then it doesn't count from our managerial agenda perspective," she said.
The prospect of moving so many Army jobs into the private sector raises questions about who will oversee the workforce and what rules will govern it, said Dan Guttman, a specialist on government contracting and a fellow at Johns Hopkins University's Center for the Study of American Government.
Already the Army has little idea of how many people make up its contract workforce, Guttman said.
Assistant Army Secretary Reginald J. Brown put the figure at "between 124,000 and 605,000" in an April memo to Sen. Ted Stevens (R-Alaska), the ranking Republican on the Senate Appropriations Committee. A month earlier, White acknowledged in a department memo that "credible information on contract labor does not exist internal to the Department."
"The fact that the Army has so little grasp on how many people it is already employing raises basic questions about its ability to account in the future for all this stuff," Guttman said. "The relevant question is not, 'Is there competition?' The issue is who is going to be there after the [contract] workforce is established to supervise it and hold it to account."
John Anderson, assistant deputy assistant secretary for manpower management, said the Army has a pilot program that requires contractors to report costs and workforce sizes back to the department.
"We're working on that right now," he said.