(Saul Loeb/AFP-Getty) (Saul Loeb/AFP-Getty)

The American Federation of Government Employees (AFGE) says the Pentagon’s budget plan shows “unapologetic bias … in favor of contractors, regardless of cost.”

The plan “is strictly precautionary,”  Defense Secretary Leon E. Panetta said at a news briefing Thursday. “This includes a plan to implement potential unpaid furloughs for our civilian personnel if sequestration is triggered,” he said.

Sequestration is the across-the-board budget reduction that would hit federal agencies by  March 1 unless Congress acts. The Defense Department cut would be about $52 billion through the end of this fiscal year.

In a statement Friday, AFGE said Panetta’s plan would place an unfair burden on the civilian  workforce, compared to agency contractors. “Despite the fact that contractors make up 70% of the Pentagon’s costs for delivering services, while federal employees make up just 30%, DoD is requiring components to reduce the cost of the civilian workforce without any remotely equivalent requirement to reduce contractor costs,” according to the labor organization.

Lt. Col. Elizabeth Robbins, a Defense press officer, said via e-mail that the guidance provided by Panetta “includes the curtailment of travel and conferences, the curtailment of facilities maintenance and repair (which is largely done by contractors), curtailment of supply purchases and business IT (also largely contractor provided), requires the review of all contracts for possible savings, and the requirement to clear all contracts over $500 million with the Defense Acquisition Executive. All of these actions will reduce contractor costs significantly. Therefore, there is no way to conclude that the guidance targets civilian employees in any disproportionate manner.” 

To minimize the impact on services, AFGE suggested Defense:

— “Freeze new service contracts”

— “Prohibit the conversion of work performed by temporary federal employees or term employees to contractors.”

— “Ensure that no portion of functions performed by both federal employees and contractors be shifted from federal employees to contractors, so equal or greater cuts must come from the contractor workforce.”

— Match any reduction in federal employee costs that is achieved by furloughs with cuts in service contract expenditures.”

AFGE President J. David Cox Sr. said “cordoning off contractor costs and focusing almost exclusively on cutting just federal employees is bad budget policy. Worse, it will force more extensive cuts in services for each dollar eliminated than if the costs of contractors were subject to the same level of cuts as civilian employees.”

This post has been updated since it was first published.