GSA offers 700 buyouts in an effort to cut costs


May 12, 2006|By MELISSA HARRIS

The General Services Administration announced this week that it is offering 700 federal workers buyouts in the hope that almost 400 of them will accept. The reason: Two of GSA's divisions, which rely heavily on fees for services provided to other agencies, are operating in the red.

Four years ago, this corporate-style downsizing would have been unheard of in federal circles, but according to a recent Government Accountability Office report, it is becoming more common after a 2002 bill allowed agencies to "reshape" rather than merely downsize their staffs.

The March 2006 GAO report found that from fiscal years 2003 to 2005, the number of agencies using buyouts and early retirement offers increased to 51, from 28.

During that period, at least 22,600 employees took the offers, according to Office of Personnel Management data included in the report. Those numbers, however, are likely grossly understated because information from the Defense Department and the National Security Agency, whose buyout programs are independent of OPM, were excluded from the report.

What's more surprising, however, is that these buyouts have grown hand-in-hand with louder calls for new, young workers to replace retiring Baby Boomers. The number of open positions in the federal government ranges from 20,000 to 30,000, according to OPM.

"While it appears somewhat schizophrenic, given concerns about a retirement tsunami - how we really want people to stay, yet we're giving people buyouts - it's not a contradiction," said Marta Brito Perez, an associate director at OPM. "We don't just want anybody. We want people with the right skills."

For the most part, before 2002, executive branch agencies could offer buyouts only if the agency needed to reduce its number of full-time employees, a process called reductions in force, Perez said. The 2002 Chief Human Capital Officers Act gave agencies the flexibility to cut staff in some areas while adding employees in other, high-demand professions.

New technology, budget cuts and decisions to consolidate offices to further cut costs and reduce duplication have driven recent buyouts.

"You may have the right number of employees, but not people with the right skills," Perez said. "This is not about numbers. It's about the right skills."

However, the GAO report did find concerns among agencies that the maximum buyout amount - $25,000 - was too low. That figure hasn't been changed since 1992. The most lucrative option, which agencies increasingly are using, is combining buyouts with early-retirement offers. That strategy, however, may not work forever, the GAO found.

"As more employees retire and are replaced by younger employees further from retirement, buyouts and early outs may not be attractive to them," according to the report.

Medical benefits

OPM has announced the companies that will provide federal workers and retirees with new dental and vision benefits starting Dec. 31. Workers will be able to select their provider at the start of open season, which begins Nov. 13. Premiums for the plans, however, haven't been announced. Go to to see a list of the companies.

Clearance fix

The U.S. House of Representatives passed an amendment this week that would salvage contractors' expiring security clearances after the Defense Security Service "ran out of money" and stopped processing them.

Rep. Tom Davis, a Virginia Republican who introduced the proposal, said in a news release that the amendment would remain in effect until the Defense Department is "able to get a handle on the crisis," which he says was caused by poor planning within the Pentagon.

The writer can be reached at or 410-715-2885. Recent back issues of the column are available at

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