STATEMENT OF CLYDE M. WEBBER, PRESIDENT

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
SUBMITTED TO THE JOINT COMMITTEE ON ATOMIC ENERGY

April 14, 1976

We appreciate the opportunity to present this statement to your committee on behalf of the over 700,000 civil service workers represented by AFGE.

We understand that the Congress last year wisely rejected an ERDA request for statutory authority to establish an "integrated management organization" comprised of both government civil service employees and employees of the Project Management Corporation, a private company.

We also understand that ERDA is now requesting authority to establish, by contract with the same Project Management Corporation, a "consolidated engineering organization" comprised of both regular government employees and PMC employees. We urge the members of this committee to again reject this unprecedented and misguided proposal.

Any arrangement of this type necessarily means either that regular Federal employees will be supervised by private industry superiors, or that private industry employees will be supervised by Federal officials, or both.

Any such arrangement would violate

service statutes and regulations.

existing Federal civil

It would also be as poor manage

ment policy as anyone could dream up.

TO DO FOR ALL THAT WHICH NONE CAN DO FOR ONESELF

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Both the U. S. Civil Service Commission and the Comptroller General of the United States, in formal regulations and opinions have held that it is a violation of existing civil service statutes for the United States government to stand in an "employer-employee" relationship with persons not appointed to Federal civil service positions in accordance with such statutes.

Such an illegal "employer-employee" relationship arises if a Federal official supervises private industry employees in performing integral government functions alongside Federal employees in a Federal installation.

Conversely, an official of a private corporation cannot be

a line supervisor of Federal civil service workers performing Federal functions. "Supervision" as defined in applicable government laws, Executive orders, and regulations involves responsibility, among other things, for selecting, promoting, transferring, evaluating, disciplining, and firing, subordinate employees, and, under the individual Federal personnel statutes and regulations governing each of these and other personnel actions, a private citizen cannot suspend a Federal employee without pay, or abolish his particular position in a reduction-in-force, or select him or her for promotion in merit competition with other Federal employees, or give him or her an unsatisfactory performance rating leading to separation.

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Nor should any such arrangement be made legal, for many

good public policy and practical management reasons among which

are these:

When supervisors from a private industry cor-
poration are interposed between a Federal agency
head and regular agency employees performing
regular agency work, the line of Federal authority
is broken and the identification of accountability
becomes impossible.

When supervisors from a Federal agency are in-
terposed between the private contractor and con-
tractor employees, the line of contractor au-
thority is broken and the identification of ac-
countability, including accountability for con-
tract performance, becomes impossible.

Such arrangements, experience shows, usually
either result from or lead to evasion of Con-
gressional manpower ceilings and appropriation
limitations; evasion of civil service, Federal pay,
veterans preference, and equal employment opportunity
laws and regulations; and evasion of Federal conflict-
of-interest and partisan political activity (Hatch Act)
statutes and regulations.

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Such arrangements cause friction between two
groups of employees working side-by-side but
under different pay systems, different leave
systems, different disciplinary systems, different
retirement systems, different collective bargain-
ing agreements, and so on. History shows that
"dual personnel systems" in the same organiza-
tion are simply not good from either a manage-
ment or employee standpoint.

Such arrangements make a mockery of Federal manpower management and utilization systems. They also lead to a serious erosion of the competence of the Federal agency to manage and conduct its own integral functions. There is abundant convincing history and evidence on this point. For all the above reasons, we strongly urge that the ERDA proposal on this point be unequivocally disapproved.

At the very least, in our opinion, such an unprecedented proposal affecting the Federal civil service should not be seriously considered for approval until hearings are also conducted on it by the House and Senate civil service committees, or until the chairmen of such committees make their committee views known to your committee. We also respectfully suggest that the views of the Chairman of the U. S. Civil Service Commission, and of the Comptroller General of the United States be obtained.

Senator BAKER. Mr. Chairman, it is now a little after 12:30. I have another series of appointments that I am committed to keep. I had hoped that we could finish while I was still here. What is the chairman's and the committee's disposition with respect to the approval of the criteria and the proposal.

What I would hope you could do, Mr. Chairman, is to finish this. I will come back after lunch if that is necessary and finish it, and then to poll the committee on approving this.

Senator MONTOYA. I have another hearing starting at 1 o'clock. I haven't even had breakfast, and I won't have any lunch. Maybe I don't need it. But let us hurry on with this hearing. I think we can terminate it. Then we can probably poll the committee today on whether we should give our approval.

Senator BAKER. Thank you, sir.

Senator MONTOYA. Let us try to be brief in our questioning.

Dr. CUNNINGHAM. I will just state my remaining comments very quickly.

The first one is on termination provisions. Again there have been a number of questions raised. We believe the important points are listed here. Most important, no single party has a unilateral right to terminate the contract. With regard to termination liabilities, again there may have been some misunderstandings here. It is my understanding that the effect of the contract modification in fiscal year 1976 does not significantly impact respective liabilities in the event of early termination. Our liability in fiscal year 1976 under the modified contract will be about the same and potentially will increase in future years, but primarily because of the increased cost of the project.

With regard to the borrowing authority, principally the change here came about because of the need under the present contract arrangement to be able to handle cash flow for certain items which cannot be purchased by ERDA and in addition to take care of the cash flow problems early in the project. Borrowing authority, therefore, was necessary and required.

Under the new contract we do not believe the borrowing authority is necessary and we plan to manage the cash flow needs based on the actual appropriations available.

With regard to the annual project funding, again, the present situation is that utilities' annual costs are limited to funds currently available. Under the modified contract the funds would be limited to 50 percent of the annual project costs. In actual practice this will only be of concern during fiscal year 1976 under our present contract. From this point on it does not become a real issue. We plan to use the utility funds as they are available.

Senator MONTOYA. Why doesn't it become a real issue after 1976? Dr. CUNNINGHAM. After 1976 there is never any question based on the remaining utility funds that they will approach the 50 percent level.

In summary, I would like to mention just a few points-ERDA will have direct project management authority under the new contract. ERDA has successfully negotiated all of the points which we identified in the March 10, 1975, letter to the JCAE.

The lines of responsibility and authority are simplified.