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WAGE-GRADE PAY IN GEORGIA AND OKLAHOMA

HEARING

BEFORE THE

SUBCOMMITTEE ON THE CIVIL SERVICE

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

OCTOBER 4, 2000

Serial No. 106–273

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON THE CIVIL SERVICE

JOE SCARBOROUGH, Florida, Chairman

ASA HUTCHINSON, Arkansas

CONSTANCE A. MORELLA, Maryland

JOHN L. MICA, Florida

DAN MILLER, Florida

ELIJAH E. CUMMINGS, Maryland

ELEANOR HOLMES NORTON, Washington,

DC

THOMAS H. ALLEN, Maine

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

GARRY EWING, Staff Director

MIGUEL SERRANO, Counsel

BETHANY JENKINS, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on October 4, 2000 ............................................................................ 1

Statement of:

Chambliss, Hon. Saxby, a Representative in Congress from the State

of Georgia ...................................................................................................... 4

Davis, Jim, national treasurer elect, American Federation of Government

Employees ...................................................................................................... 7

Winstead, Donald, Assistant Director for Compensation Administration,

Office of Personnel Management; and Roger M. Blanchard, Assistant

Deputy Chief of Staff for Personnel, U.S. Air Force .................................. 31

Letters, statements, etc., submitted for the record by:

Blanchard, Roger M., Assistant Deputy Chief of Staff for Personnel, U.S.

Air Force:

Prepared statement of ............................................................................... 50

Prepared statement of Diane M. Disney, Deputy Assistant Secretary,

Civilian Personnel Policy, Department of Defense ............................. 42

Chambliss, Hon. Saxby, a Representative in Congress from the State

of Georgia, prepared statement of ............................................................... 6

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 67

Davis, Jim, national treasurer elect, American Federation of Government

Employees, prepared statement of .............................................................. 10

Scarborough, Hon. Joe, a Representative in Congress from the State

of Florida, prepared statement of ................................................................ 3

Winstead, Donald, Assistant Director for Compensation Administration,

Office of Personnel Management, prepared statement of .......................... 34

(1)

WAGE-GRADE PAY IN GEORGIA AND

OKLAHOMA

WEDNESDAY, OCTOBER 4, 2000

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE CIVIL SERVICE,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:11 a.m., in room

2203, Rayburn House Office Building, Hon. Joe Scarborough (chairman of the subcommittee) presiding.

Present: Representative Scarborough.

Staff present: Garry Ewing, staff director; Jennifer Hemingway,

deputy staff director; Miguel Serrano, counsel; Tania Shand, minority professional staff member; and Earley Green, minority assistant

clerk.

Mr. SCARBOROUGH. Good morning, I’d like to welcome everyone

to this oversight hearing. Our purpose today is to evaluate the effectiveness of the process for making wage-grade pay determinations for particular localities in the United States.

The Federal Government employs about 250,000 blue-collar employees, about 14 percent of the Federal work force. Blue-collar

wages are determined through the wage-grade pay system. Although smaller in size than our white-collar work force, their work

is extremely important. More than two-thirds of them work for defense agencies. And on a personal note, my brother-in-law is one

of them. They include such occupations as aircraft mechanics that

keep our military aircraft flying.

Since assuming the chairmanship, I have held conversations with

several Members of Congress whose constituents allege unwarranted differences between wages paid in neighboring local wage

areas. In a system with over 256 local wage areas, attempting to

resolve such issues legislatively would raise difficult, if not insurmountable obstacles, and would likely result in perpetual congressional intervention. But that doesn’t relieve us of our responsibility

to ensure that the process for determining blue collar wage rates

is working correctly. As with the General Schedule pay system, we

need to ensure that the Federal Government’s compensation programs are adequate to all of our employees.

Today provides an opportunity for subcommittee members to examine thoroughly the issues that are involved in a very complex

wage-grade system that governs over 250,000 Federal employees. A

discussion of the current system in practice, what administrative

options are available for particular localities facing challenges, and

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whether or not legislation is needed to improve the process for establishing wage-grade pay will greatly benefit this subcommittee.

In particular, I want to ensure that the pay determinations are

sufficient to recruit and retain the most qualified civil servants.

Our blue-collar workers provide valuable services for our government; it is only fair that they are going to be compensated adequately for all of their efforts. I look forward to hearing the testimony of our distinguished witnesses on this very important issue.

[The prepared statement of Hon. Joe Scarborough follows:]

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Mr. SCARBOROUGH. I would like to begin by asking unanimous

consent that Congressman Chambliss be permitted to participate

for the remainder of the hearing from the dias, not only for the

first panel but for the second as well.

I would like to ask each witness to present a 5-minute summary

of your testimony and, without objection, your written statements

will be entered into the record.

Let’s begin with Mr. Chambliss.

STATEMENT OF HON. SAXBY CHAMBLISS, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF GEORGIA

Mr. CHAMBLISS. Thank you very much, Mr. Chairman, and I particularly want to thank you for your leadership in having this important hearing today to explore the wage disparities at Georgia

and Oklahoma military bases and to look for solutions that can

help the men and women who serve our country every day to keep

our military strong and ready.

Ever since I came to Congress, I have heard complaints from

many of my constituents who work at Robins Air Force Base about

the disparity between the wage-grade pay scale in Warner Robins

and other parts of Georgia. The men and women who work at Robins provide vital support to and maintenance on critical national

security assets that are needed every day to protect and defend the

national security interests of our great Nation. Middle Georgia

bleeds Air Force blue and our workers are patriotic, dedicated and

local public servants determined to ensure that essential

warfighting aircraft continue to fly. One of the successes of Operations Allied Force and Noble Anvil in Kosovo last year was the

outstanding ability of Air Force depots like Warner Robins to meet

the surge requirements of the warfighters. In many cases our workers labored around the clock on additional shifts so that the Air

Force’s Material Command could ensure continued support of military operations in Kosovo as well as normal peacetime operations.

Air Force logistics centers like Warner Robins took extraordinary

actions to maintain support to all of its Air Force customers, but

the hard work and dedication of our workers at the base clearly

made that successful effort possible.

As you well know, our military services are facing serious recruiting and retention problems. The Department of Defense must

compete intensely with the private sector to hire and keep the best

and brightest of our work force. Moreover, our current work force

is aging. Just last week, Air Force Chief of Staff General Michael

Ryan testified before the House Armed Services Committee that

workers at our Air Force depots are on average about 48 years old.

Approximately 50 percent of the current depot work force will retire in the next 5 years, and we find it increasingly difficult to replace these valued workers who will soon be leaving Federal service.

Earlier this month, our local newspaper, the Macon Telegraph,

reported that Warner Robins Air Force Base is suffering a work

force shortage.

Given these facts, I find it very puzzling that we continue to tolerate such a gross disparity in wage-grade pay scales in Georgia.

It is hard enough already to recruit and retain good people. Why

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should we make it even more difficult by imposing unfairness and

enforcing unequal wage-grade pay? We are perpetuating a disincentive that discourages and demoralizes our wage-grade employees.

Our wage-grade workers at Warner Robins are performing

skilled, specialized jobs that are not like similar occupations in the

local area surrounding the depot. However, less than 100 miles

from Warner Robins in Atlanta, companies like Delta Air Lines and

Lockheed both employ large numbers of highly skilled aircraft

maintenance workers.

Last year, I introduced H.R. 2394 to equalize the pay between

Warner Robins and the Atlanta areas. I believe that in determining

wage rates, it would make sense to compare similar jobs that are

within commuting distance of each other.

I know for a personal fact that there are a number of individuals,

both in the Macon and Warner Robins area, who drive as far as

Atlanta every day to go to work. Likewise, there are folks living in

the suburbs of Atlanta who come to Robins Air Force Base to work

every single day.

Mr. Chairman, I look forward to hearing from our witnesses

today and I thank you for allowing us the opportunity to highlight

the wage-grade disparities in Georgia and Oklahoma. I firmly believe that this hearing will make Congress more aware of the challenges facing our dedicated workers and will begin a process by

which we can provide better pay and maximize the effectiveness

and efficiency of our depot system. And I thank you.

[The prepared statement of Hon. Saxby Chambliss follows:]

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Mr. SCARBOROUGH. I thank you, Congressman Chambliss, and I

want to thank you right now in front of everybody for your work

on this important issue and the number of times that you have

come up and talked to me about H.R. 2394 and the importance in

equalizing the pay grade differences.

You have done a great job as Congressman for the 8th District.

And one man who knows that is a man who actually is also speaking today, Jim Davis, who was recently elected as national secretary-treasurer of the American Federation of Government Employees, and prior to that he was employed at Robins Air Force

Base in Congressman Chambliss’s district, so he certainly is very

aware of the problems that Congressman Chambliss’s constituents

are facing.

I’d like to welcome you and congratulate you on your election victory. And look forward to hearing your testimony. Let me ask if

you could, since this is an oversight subcommittee, if you could

stand up and take the oath.

[Witness sworn.]

Mr. SCARBOROUGH. Thank you. Go ahead.

STATEMENT OF JIM DAVIS, NATIONAL TREASURER ELECT,

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Mr. DAVIS. Mr. Chairman and members of the subcommittee, my

name is Jim Davis and I am the national secretary-treasurer of the

American Federation of Government Employees. On behalf of the

more than 600,000 Federal and District of Columbia employees

represented by AFGE, I thank you for the opportunity to testify

today on our concerns about the Federal wage system.

I am representing AFGE today both from the perspective of a recently elected national officer, and as a long-term local officer. For

the past 8 years I have served as local president at Robins Air

Force Base and, as such, have witnessed the negative impact of the

current Federal wage system and been intensely involved in our

union’s efforts to correct the inequities our current system generates.

Mr. Chairman, simply put, the current system is in trouble. congressionally imposed pay caps, coupled with the withdrawal of the

Monroney protections for DOD employees, have conspired to prevent tens of thousands of Federal blue-collar workers from receiving what the Federal wage system envisioned: wages that reflect

prevailing rates for similar work in the local private economy.

Our current method of determining wages is sending a clear message that if you want to be all you can be, do not seek employment

in the public sector, because we are not going to compete and pay

competitive wages for your services. Federal blue-collar workers deserve better for their hard work performed every day. And AFGE

commends this subcommittee and Congressman Chambliss for

holding these hearings and recognizing the needs for solutions to

the pressing problems being experienced by this forgotten and neglected group of Federal workers.

We started the Federal wage system with all good intentions, but

almost immediately after the wage system was put in place, problems with the Prevailing Rate Act were recognized. Specifically,

where the government was the dominant industry in a particular

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wage area, certain trades and crafts like shipbuilding and aircraft

maintenance, there were no private sector jobs to be surveyed as

prescribed by the law. Therefore, the so-called Monroney amendment was enacted, and it directed the data collectors to bring in

data from the nearest area where adequate private sector trades

and craft skills existed.

Then in 1979, Congress and the President distorted the system

by imposing a ceiling on the annual percentage increases the system could pay regardless of what the data showed. As a result,

each year since that time, Congress has limited the blue-collar pay

increases to the percentage granted by Federal white-collar workers who were paid according to the General Schedule system. Thus,

the Federal wage system has not been a prevailing rate system in

anything other than name for 21 years.

Then in 1984, DOD sought the relief from Congress to exempt

the Monroney amendment. They argued that their budget made

compliance with the Monroney unaffordable. Blue-collar workers

employed by DOD since 1984 have the dubious distinction of an

even lower wage schedule than their counterparts at other Federal

agencies.

This, of course, is an ironic state since the Monroney was designed specifically for industries that had the predominant rate,

and DOD is the one with the predominant skills.

So what we are doing today is maintaining an enormous bureaucratic infrastructure in many agencies charged with calculating

what blue-collar rates should be if the wage system was allowed to

work without the pay caps, without the withdrawal of the

Monroney protection for DOD workers, just to make sure that our

employees know the magnitude of the loss of they suffer year after

year. This year, 84 percent of the Federal blue-collar workers in

the wage-grade 10 and above were affected by the cap because the

wage system data showed prevailing rates above Federal rates.

Now, you showed some interest in what is going on at Robins Air

Force Base, my hometown. And to be specific, this year, for example, a wage-grade 10 at Robins Air Force base is paid $16.15 an

hour. Now, the same employee working for another agency in the

Macon area is paid $16.57 an hour, while at the same time, less

than 100 miles away, as Congressman Chambliss stated, this same

wage-grade employee maintaining the same aircraft is paid $19.61

an hour. It is a $3.46 difference.

I would also like to address here the dispute that DOD and

AFGE have over my contention that the disparities between the

Federal wage system and the GS pay adjustments between 1987

and 1999 amount to discrimination. DOD has defended itself by arguing that the two pay systems have produced similar average

wages for the workers in the two systems, and I strongly disagree.

In 1984, there was a 12.75 percent difference between the pay of

a GS–11.4 and WG–10, step 2, at Robins. In 1999, the percentage

difference between the rates was 36 percent. The GS salary has

grown 56 percent. The wage-grade scale has grown 29 percent.

The Bureau of Labor Statistics says that inflation has gone 56

percent so the GS people are in line while the wage-grade people

have fell back. Now, you can talk about percentages, but in real

dollars these same employees, the GS employees, have received a

9

$7.62 increase in their wages, while the wage-grade people have received $3.48.

I don’t understand what the goal of the DOD is in continuing to

support this system. They argue that recruitment and retention

problems that DOD has experienced nationwide can best be resolved by some minor targeting—tweaking of the existing system.

DOD claims that problems with the wage-grade system is isolated,

but it is not. We firmly believe that if DOD wants to recruit people,

we can simply go and have a conversion of our wage-grade people

to the GS pay scale. This will allow the flexibilities that we are

asking for.

I see that I am out of time and I will answer any questions that

you may have.

[The prepared statement of Mr. Davis follows:]

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Mr. SCARBOROUGH. I appreciate it and will certainly give you

time to come back and answer any questions and go into any information you were not able to give us here.

I do want to say at the outset, though, that as a Member of Congress who represents an area with five military bases, I have seen

firsthand that this actually is more than just a union issue for Federal employees. This is a readiness issue.

I mentioned before that my brother-in-law is a blue-collar civil

servant who used to work at NAS Pensacola. Now he is over in

Jacksonville. But what I found when I toured the bases at NAS

Pensacola or Hurlburt Field or Eglin Air Force Base or Tyndall in

Panama City, I found that these blue-collar workers were the people that kept the helicopters flying and the airplanes flying and

were the ones that in a crunch, they went to fix these things up

and keep them going. And that’s why it is just absolutely essential

that we resolve this issue.

Again, it is not just a blue-collar pay issue. This is a real readiness issue and one that is troubling to me, somebody that has seen

how important the blue-collar work force is to the military operation of this country.

Let me ask you, Congressman Chambliss, we have obviously

talked about this issue a good bit. Certainly everybody here knows

that you have been a champion on this issue. But can you talk to

me about the contacts that you have had locally; what have you

heard, for instance, from the local union or from the base commander or the leadership at Robins Air Force base on this issue?

What are they telling you?

Mr. CHAMBLISS. Well, let me amplify, first of all, on what—your

statement there with respect to the readiness of our troops. You

and I serve on the Armed Services Committee together and we are

very well aware of our readiness problems. You were at the same

hearing that I referenced in my testimony a little earlier last week

where we heard that we have got serious problems there within

our force all up and down the line from a readiness perspective.

Now, that exact same problem exists within the civilian work

force for the same reasons. We have got pay problems, we have got

work atmosphere problems and what not that cause morale among

these wage-grade employees to be low. And you are right, they are

the heart and soul of our civilian work force. They are the folks at

Robins Air Force Base that keep our planes flying, our warfighters

will have the very best equipment possible and very best weapons

systems available.

So that issue of readiness is a critical, critical issue. I have been

up and down the line at Robins both with Mr. Davis and without

Mr. Davis, and talked to employees both union, nonunion, wagegrade, nonwage-grade, and this is a concern to everybody within

that work force, this wage-grade differential issue. And it does not

make any difference whether they are a wage-grade employee or

not, the other folks know what the problem is and they are very

concerned about those folks. There is a morale problem all up and

down the line there. And that is the primary reason I think we

need to address it, in addition to the readiness issue overall.

What I am told from the leadership is that it is reviewed from

time to time and that basically their hands have been tied. They

27

are required to abide by the law and they feel like they are restricted from the DOD perspective and they do not have any flexibility about what they can do at the local level.

Obviously, when I kept hearing that over and over, then that

precipitated this legislation, and we would rather not have to go

through the legislative route. We would rather address it administratively. And I hope that maybe the fact that DOD now understands and the Air Force understands that we are dead serious

about this and we want to get something done about it and this

committee is ready to move on it, and perhaps we can move in the

direction, administratively even.

Mr. SCARBOROUGH. Have you talked to the Office of Personnel

Management or the Air Force about the wage discrepancies in your

district?

Mr. CHAMBLISS. Yes.

Mr. SCARBOROUGH. What have they told you?

Mr. CHAMBLISS. Well, basically the same thing, that their hands

are tied. That, you know, they are concerned about the overall cost

for our operation of the depot, and that is a concern to them and

obviously that is a concern for everybody. But if you are having morale problems within the work force and you can cure it by spending a few bucks, then you are much better off to improve the morale of those folks, increase the efficiency of the work force by improving that morale, and I think very clearly there is a better response to it and a better reaction to it than it just costs too much

money. That is not good enough.

Mr. SCARBOROUGH. You mentioned morale. Let me ask you, what

are you finding with morale—how is this affecting morale and

wage-rate problems, affecting it up and down the line with our

blue-collar workers?

Mr. CHAMBLISS. It’s been interesting. I will have wage-grade employees who are so concerned over this issue that they will make

a special effort to travel the 30 to 45-minute distance from Robins

Air Force Base to my office, my district office in Macon, just to sit

down with me and explain their problem; about the fact that they

have been at Robins as a wage-grade employee for X number of

years, and they will give me their personal history of their pay increases and compare it to folks in the General Services as well as

folks who are doing the same job that they are doing, exact same

job on the exact same weapons system at Lockheed Martin in Atlanta.

Mr. SCARBOROUGH. Are you hearing complaints also about how

white-collar workers got 4.8 percent while blue-collar was capped?

Is that also feeding into this?

Mr. CHAMBLISS. Yes, that’s a part of it too. As in any work force,

everybody knows basically what everybody else makes and they

know what pay raises they get. And these folks are feeling like

they are getting shortchanged. And there is just no question but

what it is affecting their morale significantly.

Mr. SCARBOROUGH. Mr. Davis, as a leader of that work force,

would you agree with Congressman Chambliss that morale is being

severely affected by this issue and others like is?

Mr. DAVIS. Yes, sir. When we conduct union meetings, I never

wanted to hear the issue of pay come up, because in our meetings

28

we have the trades and craft people there as well as the General

Schedule people. And it was dividing the work force, because you

would have an individual that is a mechanic and their spouse

would be an office worker, and they would see the difference. You

know, when you get 50 percent more increase in your salary than

your co-worker for no reason whatsoever, it begins to make you

wonder what does your employer feel for you.

Mr. SCARBOROUGH. Right.

Mr. DAVIS. And from the perspective of DOD, they say the competitiveness. As you stated, 14 percent of the Federal Government

is wage grade. It does not seem to be a problem with the General

Schedule people. Their salaries are rolled up into those competitive

bids just as well as the people turning the wrenches. It is a big

problem. We need to fix it. We are getting to the point where we

cannot hire people. You talk about readiness, we are going to lose

our core capability to maintain our weapons systems because people just simply cannot afford to work for the Federal Government

anymore.

Mr. SCARBOROUGH. And I wanted to ask you about that, because

that is again, as Saxby said, we had a readiness hearing in the

Armed Services Committee and we were talking about the problem

with recruiting and retaining the best and the brightest to go out

and fight and protect and defend this country and American interests across the globe.

It seems to me we are having the same problems here. What are

you finding at Robins Air Force Base? Are you having difficulty recruiting and retaining the quality personnel to make sure that the

jets fly and the helicopters get to where they are going?

Mr. DAVIS. Yes, sir. A good example is the C–5. You know, Robins competed for that workload. It was brought in. It has been

there, I guess, close to 3 years now, and we have probably 30 percent of the work force on that C–5, contract field team people. I

have raised the issue: Why are we not hiring? The contract said

that this is how many people we would have. We won the bid. Why

are we not hiring organic people for it? And I am continuously told

they are not out there to hire.

But the contractor is hiring them, and we had a meeting with

them and 50 percent of who they hired was in our local area, but

they are paying a higher wage.

Mr. SCARBOROUGH. Let me ask you that, because I think that is

important too, not only looking at it on the recruiting side but also

on the retention side. When somebody leaves Robins Air Force

Base, where do they go? What employers are you competing with?

Who are you losing your employees to?

Mr. DAVIS. Well, a lot of them are going outside of our area. They

are staying with the Federal Government, because you know the

average age is 47, 48. You don’t want to throw your career away.

Many of them are still under the old retirement system so it is the

‘‘golden handcuff’’ type deal. They are going to other installations,

they are going to other areas. Those that don’t, they go to work for

the contractor, and they turn right back around and they are on

our installation doing the same work and making more money. And

they are not bashful about telling the co-workers out there, hey,

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you know, I’m making more money now doing the same work, living in the same house. I’m making more money.

So it is a critical problem.

Mr. SCARBOROUGH. Have you discussed with the Air Force any

administrative options that they may have for addressing the pay

problem?

Mr. DAVIS. Not at the level that can make that decision. All I

have seen is written testimony or statements that they want to

tweak the system and that they want to use some of the options

that are allowed under the General Schedule system to pay bonuses, moving expenses. That’s not going to work. That’s a temporary fix. We’ve been tweaking the wage-grade system for 21

years. We need to examine it from a very broad perspective.

Tweaking it is not going to fix it. We already have two classes of

people basically when you get into meetings and you talk about the

pay. Are we going to generate a third and a fourth and a fifth? I

just don’t see the logic behind that.

Mr. SCARBOROUGH. Let me ask you all just a broad question.

Again, Congressman Chambliss, you have talked around this, as

you have, Mr. Davis. But specifically, describe the morale at Robins

Air Force Base.

Mr. CHAMBLISS. Well, you know, these folks do a great job. And

I’ve not just seen them on the line but I’ve seen the end product.

They’ve been declared the best base in the Air Force a couple of

times since I have been a Member of Congress. So I don’t want to

let you think that there is not quality work going on there.

But by the same token, this work force knows and understands

that they’re not making an equal pay for equal work that their colleagues and folks doing the same thing are getting paid just within

a few miles up the road.

And that, in and of itself, requires them to go home every day

and face their family and say, ‘‘You know, we could move to Atlanta, or we could drive to Atlanta every day and I could provide

you with a better quality of life.’’ And having to face your wife and

your children every night when you go home in that type of atmosphere obviously causes significant problems, once they get up to go

to work the next morning.

So morale has been significantly affected by it. These people are

glad to have a job. Don’t misunderstand me there. They are happy

doing what they’re doing and they are glad to be working at Robins

Air Force Base. They would rather not have to drive that additional number of miles every day to do the same job. And with that

type of mind-set, it just has a significant effect on the overall morale, not just of that employee, but the employee working next to

them who may be a wage-grade employee, may be a contract employee; and for him to be standing side by side with a contract employee, knowing that the week before that contract employee was

getting paid the same thing he is, and now they are doing the same

job and the contract employee is getting $4 or $5 an hour more,

and plus he is getting a little different benefit, is really where the

morale problem hits its height. It is significant. It is widespread

within the work force.

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Jim was telling me earlier, now we’re up to 3,500 to 4,000 employees who are wage-grade employees. So it is a significant part

of our work force that is directly affected by it.

Mr. SCARBOROUGH. Mr. Davis, could you talk briefly about the

morale issue?

Mr. DAVIS. Mr. Chambliss was correct, they do quality work

there. The morale is low with respect to their trust in their management structure. They do the work that they do because they

know who’s getting on that airplane. They know who’s getting on

that airplane, and they know what they are getting on that airplane for.

If our work force was not at the age that it is, I’m afraid we

would see mass exodus. When we get the majority of our work force

under the new retirement system where they can take their money

with them, there is not going to be any reason for them to stay

when they talk about sending their kids to college. They’re dedicated employees. They grumble a lot. It affects them in their home

life, but they go out there and do their job every day.

So when you talk morale, that is a very broad issue. They are

going to do their job. They continue to do that job. And I believe

it is our responsibility to see to it that they are paid what they

should be paid because they are a very critical element in the defense of this country.

Mr. SCARBOROUGH. Do you all have anything else you would like

to say?

Mr. CHAMBLISS. I don’t think so, Mr. Chairman.

Mr. SCARBOROUGH. Thank you.

Mr. DAVIS. I appreciate the opportunity.

Mr. SCARBOROUGH. I appreciate you coming. Certainly appreciate, Saxby, all the hard work you have done on this issue, and

I appreciate your testimony. And we had a unanimous consent request to have you sit up on the dais for the next panel, so I would

like to invite you up and thank you, Mr. Davis.

Mr. DAVIS. Thank you.

Mr. SCARBOROUGH. We will now go on to our second panel. And

that is going to consist of Roger Blanchard and Donald Winstead.

Since 1997, Roger Blanchard has served as Assistant Deputy

Chief of Staff for Personnel for the U.S. Air Force. He is responsible for comprehensive plans and policies covering all life cycles of

military and civilian personnel management, and we certainly welcome his participation.

Donald Winstead currently serves as Assistant Director for Compensation Administration at the Office of Personnel Management.

OPM develops and maintains governmentwide regulations and

policies on pay administration including basic pay setting and locality pay determinations.

We will start with you, Mr. Winstead.

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STATEMENT OF DONALD WINSTEAD, ASSISTANT DIRECTOR

FOR COMPENSATION ADMINISTRATION, OFFICE OF PERSONNEL MANAGEMENT; AND ROGER M. BLANCHARD, ASSISTANT DEPUTY CHIEF OF STAFF FOR PERSONNEL, U.S.

AIR FORCE

Mr. WINSTEAD. Mr. Chairman and members of the subcommittee,

thank you for inviting me to testify today on issues affecting the

pay of wage-grade employees of the Federal Government. You

asked specifically for information about how the process for making

wage-grade pay determinations is working in particular localities

in Florida, Georgia and Oklahoma.

Before addressing the circumstances of specific local wage areas

of interest to the subcommittee, please allow me to provide a brief

overview of the pay system under which wage-grade employees are

paid.

Since 1972, wage-grade employees have been paid under the Federal wage system. This system is separate from the General Schedule pay system that covers most white-collar Federal employees.

The Federal wage system covers about 250,000 Federal employees

in trade, craft and laboring occupations, which are sometimes referred to as blue-collar occupations. The vast majority of these employees work for the Department of Defense.

One of the key statutory principles underlying the Federal wage

system is that rates of pay are to be maintained in line with prevailing levels of pay for comparable work within a local wage area.

For this reason, wage-grade employees also are referred to as prevailing rate employees. To carry out this statutory principle, the

Department of Defense conducts wage surveys of private sector employers in each of 132 local wage areas throughout the United

States to determine local prevailing rates. Prevailing rate employees, including local Federal employee union officials, are involved

in all aspects of the prevailing rate pay-setting process. At the local

level, labor and management officials work in partnership through

a wage survey committee to collect the data needed to determine

local prevailing rates.

The Office of Personnel Management establishes local wage

areas under the Federal wage system. Generally, we establish a

local wage area where large concentrations of Federal employment

coincide with concentrations of private sector employment adequate

to determine local prevailing rate factors such as commuting patterns, distance from major Federal installations. Overall population

and the size and type of private industrial establishments are used

to set wage area boundaries. Major military installations and Department of Veterans Affairs medical centers typically serve as the

cores around which local wage area boundaries are constructed.

As in the case of data collection for local wage surveys, prevailing

rate employees are involved, through their Federal employee union

representatives, in the process for determining the boundaries of

local wage areas. At the national level, Federal employee unions

participate in this process through their membership on the Federal Prevailing Rate Advisory Committee. This advisory committee

is composed of five representatives from agency management, five

from Federal labor organizations and an independent chairman.

The committee advises OPM on all aspects of administering the

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Federal wage system, including how local wage area boundaries

are set.

Now, let me address your concerns about wage-grade pay in certain local wage areas. We’re aware that employees in the Macon,

GA wage area have expressed concerns about the fact that their

wage rates are lower than those in the neighboring Atlanta, GA

wage area. And we have heard similar concerns from employees in

the Wichita Falls, TX/southwestern Oklahoma wage area where

wage rates are lower than for comparable employees in the Oklahoma City wage area.

The pay situation in both of these wage areas is largely a consequence of the principle that levels of pay are to be maintained

in line with prevailing levels of pay for comparable work within

each local wage area. Levels of pay under the Federal wage system

vary, sometimes substantially, from one wage area to another. This

consequence is in keeping with the purpose behind the prevailing

rate principle, that the Federal Government should compete on an

equal footing with private sector employers in each local labor market. To do otherwise would unnecessarily drive up overall employment costs for the Federal Government and for private sector employees as well.

The pay situation in the Wichita Falls, TX/southwestern Oklahoma wage area has been further complicated by a series of pay

caps imposed on the Federal wage system during the past 20 years.

Pay caps are enacted through appropriations legislation and prevent Federal wage system pay increases from exceeding the overall

average GS pay increase. The pay cap in fiscal year 2000 was 4.93

percent. However, even without these pay caps, the pay rates in

the wage area would still be lower than those in the neighboring

Oklahoma City wage area.

The concerns expressed by Federal prevailing rate employees in

the Jacksonville area likely arise because recent pay increases for

these employees have been smaller than for General Schedule employees who are covered by a separate locality pay system. The

General Schedule locality pay system began in 1994 and is being

gradually phased in to reduce the pay gap for white-collar Federal

employees. But in Jacksonville, there is no pay gap for blue-collar

Federal employees; therefore, prevailing rate employees in Jacksonville receive pay increases each year to maintain parity with private sector blue-collar pay rates in that area, while white-collar

Federal employees have been receiving larger pay increases in

order to reduce a significant pay gap.

We are convinced that overall, the Federal wage system is accomplishing the purposes for which it was established in 1972. No

legislation is needed at this time to enable Federal agencies to recruit and retain skilled blue-collar workers.

No Federal agency has made us aware of any significant recruitment or retention problems affecting Federal agencies in the Jacksonville, FL; Macon, GA; or Wichita Falls, TX/southwestern Oklahoma wage areas. But if this situation changes, you can be sure

that OPM will work expeditiously to use existing administrative

authorities to deal with any problems that are brought to our attention.

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For example, at the request of an employing agency, OPM may

establish special salary rates to address specific recruitment or retention problems. In addition, we are now considering a request

from the Department of Defense to authorize recruitment and relocation bonuses and retention allowances for Federal wage system

employees. If this request is approved, Federal agencies will be

able to make such payments on a case-by-case basis or for groups

of employees in certain situations without prior OPM approval.

This concludes my remarks and I would be pleased to answer

any questions you may have.

Mr. SCARBOROUGH. Thank you, Mr. Winstead.

[The prepared statement of Mr. Winstead follows:]

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Mr. SCARBOROUGH. Mr. Blanchard.

Mr. BLANCHARD. Mr. Chairman, and distinguished members of

the Civil Service Subcommittee, it is a great honor to be here representing the men and women of the U.S. Air Force, and to report

to you on wage-grade pay determinations affecting Air Force bluecollar civilian employees in particular localities in Georgia and

Oklahoma. I request my full statement be entered in the record,

and I have a few remarks to make.

Mr. SCARBOROUGH. Without objection, so ordered.

Mr. BLANCHARD. I am sorry that Dr. Disney could not be here

in person for OSD, but I would like to thank her for providing a

comprehensive statement covering the process for setting pay in

the Federal wage system and describing the situation at several of

our Air Force bases, and finally for outlining the administrative

remedies available to installations that encounter recruiting and

retention problems.

[The prepared statement of Ms. Disney follows:]

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Mr. BLANCHARD. Our focus in the Air Force is to ensure that we

have a fair and equitable pay system for all employees, in particular a blue-collar wage system that assures the Air Force is competitive in today’s booming economy, marketing the Air Force as an

employer of choice, including attracting and hiring the highestskilled employees available into our positions. We are working to

retain, maintain, and sustain this critical part of our total force.

We know that when our compensation programs are working properly, there is minimum turbulence in our work force, and recruiting

and retention problems do not exist.

The other side of this balancing act is that we have an obligation

to ensure our blue-collar work force is cost-effective and efficient.

This is becoming more important as we go through the competitive

sourcing process for many of our functions. We operate in a competitive environment today, and in many cases the margins are

very close between the costs of in-house and contract labor. We owe

it to our dedicated employees to be careful that as we tweak the

compensation programs, we do not create situations where our people are no longer competitive in contracting-out situations.

As indicated in your statements and Congressman Chambliss’s

statements, our Air Force wage-grade work force is critical to the

day-to-day mission of the Air Force as well as to our continued future as the best aerospace force in the world. The work they do,

particularly in aircraft maintenance, has a direct mission impact

and contributes directly to the readiness of the U.S. Air Force.

These are skilled and dedicated employees, professionals in their

crafts, and we have invested substantially in them to ensure we

have a capable in-house work force to support America’s Air Force.

We believe the Federal wage system can operate to provide fair and

competitive compensation for our valuable employees and that it

currently contains enough administrative flexibility to address specific recruiting and retention problems in a targeted and cost-effective way.

We do not believe a legislative solution is necessary or desirable.

However, we are interested in adding flexibility in the system by

expanding the authority to offer recruitment and relocation bonuses and retention allowances authorized in the Federal Employees Pay Comparability Act to Federal wage system employees. Currently, these three Rs are only available to General Schedule employees. We believe these additional flexibilities together with the

administrative flexibilities already available would further enhance

our ability to react quickly to specific recruiting and retention problems.

Once again I thank you for the opportunity to be here, and I will

be glad to answer any of your questions.

Mr. SCARBOROUGH. Thank you. I appreciate it.

[The prepared statement of Mr. Blanchard follows:]

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Mr. SCARBOROUGH. Let me ask both of you, before we start asking questions, if you will stand up and take the oath.

[Witnesses sworn.]

Mr. SCARBOROUGH. Now you are prepared to answer tough questions from Saxby Chambliss. Saxby, why don’t we defer to you?

Mr. CHAMBLISS. Thank you, Mr. Chairman.

Mr. Winstead, can you tell me what comparison is made for the

wage-grade salary determination at Robins?

Mr. WINSTEAD. Every year the Department of Defense conducts

a wage survey in that local wage area. We conduct—the Department of Defense conducts full-scale surveys every other year, and

in the years in between they conduct surveys by telephone or mail

to update those surveys, and the Department of Defense compares

jobs at a similar level of work.

For example, there are a number of jobs under the system that

are graded at a similar level, and so the Department of Defense

looks for jobs having similar level of work in the private sector in

the Macon wage area, and surveys private sector establishments

that have those kinds of jobs to come up with an overall salary

level for the private sector and compares that with the rates that

are being paid to Federal wage-grade employees in that area.

Mr. CHAMBLISS. Do you know, specifically, though, who those

wage-grade employees’ jobs are compared with?

Mr. WINSTEAD. There are a number of jobs that are graded at

wage-grade 10 level, which is, I believe, the job—the level at which

aircraft mechanics are graded under the system. And, for example,

those would include motor grader operators, automotive mechanics,

welders, pipe fitters, sheet metal workers, electricians, and machinists.

Mr. CHAMBLISS. But again, can you tell me who they are compared with? Do you have a list of folks that were called to check

to see how much they were being paid to compare the wage-grade

folks at Robins with?

Mr. WINSTEAD. Your question is which employers?

Mr. CHAMBLISS. Yes.

Mr. WINSTEAD. I don’t have a list of the employers. I can defer

to the Department of Air Force or get back to you on that question.

Mr. CHAMBLISS. I would like a list of those as far as the last survey that was conducted. Is that survey, in the case of Robins, limited to Bibb County and Houston County?

Mr. WINSTEAD. No, there are other counties in the survey area

in the Macon wage area.

Mr. CHAMBLISS. All right. What determines how far the area

would go that the survey would include? What is the criteria there?

Mr. WINSTEAD. We look at areas that have large numbers of

wage-grade employees, at least 100 employees in that county. And

we look at the private sector establishments in those areas.

Mr. CHAMBLISS. Well, of course, the problem with that is once

you leave Houston and Bibb County, you’re in rural areas all

around Robins Air Force Base and you simply don’t have, Mr.

Winstead, any comparable jobs there. And that’s been my continuing problem with this; that, sure, I understand that you can compare a mechanic to a motor grader to a mechanic on an airplane

just from the standpoint that they are both mechanics. But the

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level of sophistication of that job to ensure that that warfighter has

a properly prepared weapons system that that mechanic is working

on doesn’t compare, really, with the mechanic that is working on

a motor grader.

And that is my problem that I have had continually with this.

You are not comparing apples to apples, you are comparing apples

to oranges when you try to do that.

Second, the area is obviously very limited. This has been somewhat of a fuzzy area that I get every time I ask this question about

what is the area, what counties are included? But as I say, when

you get outside of Macon and Bibb County, if you go to Bleckley

County, you have no heavy construction folks there. Twiggs County, you have no heavy construction folks there; no airplane mechanics that you can compare them with.

But yet if you go to Delta Airlines at the Atlanta airport, which

is approximately 80 miles away, you have a strong contingent of

airplane mechanics that you could look at.

And I am just continually bothered by that. And I know that you

recently in the State of Rhode Island—excuse me, in the Boston

area—that you have proposed adding the entire State of Rhode Island to the Boston locality pay area; and that in California, you are

proposing adding Monterey, CA to the San Francisco pay area for

the purpose of comparing wages. Can you tell me what the difference would be, then, why we don’t include Atlanta in the area

for Robins for the same reasons that you are adding areas in those

particular localities?

Mr. WINSTEAD. Well, of course, we are talking about two different pay systems to start with. The pay system for the white-collar employees is the General Schedule, and we do have a locality

system for that work force. The folks in Rhode Island—the agencies

in Rhode Island presented some issues to the Federal Salary Council last week regarding recruitment and retention problems there

that lead the Federal Salary Council to make a recommendation regarding adding Rhode Island to the Boston locality pay area. And

the President’s PAYGEN, which consists of OPM and the Office of

Management and Budget and the Department of Labor, agreed

with that recommendation.

I think in general, though, our observation would be that the

local labor market generally is broader in scope geographically for

white-collar-type workers in professional, administrative, technicaltype jobs as opposed to the trades craft and labor kinds of occupations that are covered by the Federal wage system. And so under

the Federal wage system, we generally have smaller pay areas or

wage areas.

Mr. CHAMBLISS. Why would that be, though? Why does that

make sense to do that? Why don’t you treat your blue-collar employees the same way you do for white-collar employees?

Mr. WINSTEAD. We think the labor market for those two categories of employees are different and we believe it makes sense to

compare blue-collar workers with blue-collar workers and white-collar workers with white-collar workers.

Mr. CHAMBLISS. I understand that, and surely that is the way to

do that, but you are saying that the area encompassed by the survey for white-collar employees is broader than the area for blue-colVerDate 11-MAY-2000 12:34 Nov 07, 2001 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 C:\DOCS\74928.TXT HGOVREF1 PsN: HGOVREF1
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lar employees, so really you are discriminating against those bluecollar employees if that is in fact the case. And my question is why

do you do that? Why don’t you have a broader area for the bluecollar workers?

Mr. WINSTEAD. Again, I would say that the local labor markets

for most occupations that are covered by the Federal wage system

is generally smaller than is the case for most of the occupations

that are covered by the General Schedule.

Mr. CHAMBLISS. Well—and that is a classic reason why, Mr.

Winstead, in the case of airplane sheet metal workers, airplane mechanics, folks that pull seats out of airplanes and repair those seats

and put them back in airplanes, there is nobody else in the Macon

area that does that. That’s exactly why we are having this conversation today and exactly why, if you go 80 miles up the road,

you are going to find people that do that, that ought to be compared to the employees at Robins.

You just answered my question specifically, and I am glad that

is exactly the way you feel.

Now, can you explain why a wage-grade 10, level 5, position in

Atlanta would make 23 percent more than a wage-grade 10, step

5, at Robins?

Mr. WINSTEAD. Again, that has to do with the local labor market

for those jobs in those two areas. The Department of Defense conducts surveys in the Macon wage area and conducts separate surveys in the Atlanta wage area, and the conclusion based on those

surveys is that the local prevailing rates in the Atlanta area are

higher than the local prevailing rates in the Macon wage area.

Mr. CHAMBLISS. Let me ask either of you if you know of—have

any personal knowledge of why we don’t extend the area north to

Atlanta where there are these jobs at Lockheed? Mr. Blanchard, do

you have any comment on that? Do you have any knowledge about

that?

Mr. BLANCHARD. I do not have any personal knowledge about

why the wage area has not been extended. I know that the process

for doing that requires a recommendation to come forward through

the system, the prevailing rate system for consideration, and is a

product of a labor-management effort to bring that kind of issue

forward.

I also know that Robins, the commander at Robins presently is

working within the system to identify additional industries and

jobs within the survey area to be surveyed, and included in the survey process in an attempt to ensure that a wider range of industries are included in that process. Of course, industries may or may

not agree to participate in the survey process, and that’s another

issue that needs to be resolved.

If, in fact, we are able to identify additional industries within the

survey area for inclusion in the survey process, getting them to

agree to participate is the next step. And hopefully by doing that,

then we begin to see the reflection of their rates in the overall rate.

Mr. CHAMBLISS. You mentioned that it’s preferable from the Air

Force perspective to try to resolve this administratively as opposed

to legislatively, and I agree. I wish we could come to some resolution of it. What can the Air Force do, what sort of steps can you

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take from a positive perspective to try to resolve this administratively?

Mr. BLANCHARD. We’re working with Robins now to support their

effort to gather the kind of data that the system requires to reflect

the recruiting and retention problems, either present or anticipated, that are being experienced or anticipated to be experienced,

to justify either advances in hire rates which would be helpful in

a recruiting sense and/or special salary rates which might be helpful in a retention sense, and are targeted to the occupation—specific occupation where the special salary rates would be required.

That, however, is dependent upon demonstrating the recruiting

and retention problems and/or the serious likelihood of those problems in the system, so that the administrative action can be taken

to either authorize one or the other of those actions. Robins is looking at that activity now, based on their experience. The commander

is very much engaged in that process both with the DOD wage-fixing activity as well as with us, and we’re supporting that effort. We

think that is the right way to go.

Mr. CHAMBLISS. Well, you heard what I had to say about contract

workers working side by side with wage-grade employees. And Mr.

Davis even gave you some specific numbers on what contractor employees make versus what wage-grade employees make. Now,

knowing that scenario, knowing that these guys were both wagegrade employees, they were working side by side, both of them

making $16 an hour, then 2 weeks later, the contractor employee,

who is the exact same employee doing the exact same job, stands

side by side with that individual and he’s all of a sudden making $19 an hour, sitting there telling his buddy, well you come to work

for this guy and you will make $19 an hour, is that fair?

Mr. BLANCHARD. I’m not going to comment on whether it is fair.

I will tell you that one of the things that we have asked, that the

Robins commander is asking, is that the rates of contractor employees at Robins be included in the wage survey data so that those

can be reflected in the overall rates for setting the wage-grade pay

as well. Which, if it is unfair, then that would correct the inequity.

Mr. CHAMBLISS. And I think that will certainly help the problem,

and I think what you’re going to find is that they are paying Atlanta wage rates. It is exactly what they are paying, because that

is where the contractors come from, that’s where the employees

come from, and that’s where the contractors come from.

In that same vein—I mean, when we hire a contract employee,

that employee is really still paid by the Air Force, correct?

Mr. BLANCHARD. Through the contractor; yes, sir.

Mr. CHAMBLISS. Yes. And when we hire that contractor to do a

job, we fully expect that contractor not just to do the job, but he’s

going to make money on that job, would he not? Otherwise, he’s not

going to stay in business.

Mr. BLANCHARD. Yes, sir.

Mr. CHAMBLISS. So my point being, that if we have the contractor

wage rate higher than our wage-rate employees, and built into that

is not just a higher wage, but some profit factor, then it just looks

to me like that the Air Force ought to be making that profit, if

nothing else; and in the long-term we are going to be saving

money, because we are going to hire less contractor employees, we

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are going to be paying our folks a little bit more, we are going to

be improving morale, we are going to be thus improving efficiency

of those employees. And I could just tell you, having been in the

private sector and having to hire folks and fire folks that did not

do the job for one reason or another, it just makes absolutely perfect sense that we ought to be hiring those folks ourselves and paying them a little more rather than paying that contractor plus paying that contractor’s built-in profit. It almost makes so much sense

that the folks in Washington can’t understand it. And I am not saying the Air Force doesn’t understand it.

Let me just ask you, because I have heard from time to time, as

I mentioned a minute ago, that one reason that we cannot change

the pay scale of our wage-rate folks is that it is going to have a

financial impact on the base. We do want to make sure that we

provide quality work at reasonable rates in order to be competitive.

Could both of you-all comment on this issue of what effect raising

wages for wage-grade employees would have on our ability to compete in the open market for our various contracts?

Mr. BLANCHARD. From our perspective, we need to be concerned,

and we are concerned, about the cost-effectiveness of the work force

and controlling those costs as of one factor along with other factors

in terms of providing the service that we provide and maintaining

the readiness of the force.

To the degree that contractor rates or that our wage rates rise

and increase the cost of our labor, I’m not exactly sure how that

is reflected in wage rates that private employers must pay in terms

of Department of Labor wage rates under the Contract Act. I’m not

an expert in those areas. However, our bottom-line concern has to

be on maintaining a cost-effective and efficient work force, whether

it is a contractor work force or an in-house government work force.

And our focus needs to be on the product and the service delivery

of those work forces, whether they are in an in-house work force

or a contractor work force.

Competitiveness is becoming more of an issue, as I indicated in

my opening statement. And the ability of the in-house work force

to compete on an equal basis with the contractor is obviously a concern to the work force, to the in-house work force, and one that we

need to be concerned about as well as we rely on either of those

work forces to provide the services that we are procuring.

I think with regard to the overall competitiveness, it may end

upon being sort of a wash in terms of the labor costs associated

with each contract. But that’s a product of the A–76 process under

OMB Circular A–76 on contracting out, and I am admittedly not

an expert in that area.

Mr. WINSTEAD. Representative Chambliss, we would defer to the

Department of Defense’s observations on the competitiveness and

the issue of contracting out. I would just say that the—of course,

the Office of Personnel Management is interested in maintaining a

system that allows the Federal Government to get the work done.

And that’s what we believe that the Federal wage system is designed to help do and we will, of course, depend on the agencies—

in this case the Department of Defense—to let us know when there

is a problem with the system so that we can use some of the adVerDate 11-MAY-2000 12:34 Nov 07, 2001 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 C:\DOCS\74928.TXT HGOVREF1 PsN: HGOVREF1
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ministrative flexibilities that are available to try to address the situation.

Mr. CHAMBLISS. How long has the current system been in place?

Mr. WINSTEAD. It was established in 1972.

Mr. CHAMBLISS. OK. So 28 years, roughly, almost 30 years. During that time, Mr. Blanchard, you and I were talking about earlier

that we have significantly downsized the force structure, which has

caused some downsizing of our civilian work force also. But we

have certainly changed the way we do business within the Air

Force from the standpoint of Air Force personnel. And after 28

years, I think it may be time that we took a look at maybe some

new ideas and some creative things that ought to be done to ensure

that we continue not just to recruit, but to retain these folks and

that we don’t lose them, as Mr. Davis had reference to.

And I want to make sure that you all understand and that you

convey to the folks that you are going to go back to and report on

this hearing that we are dead serious about this issue and we want

to see something done about it.

I don’t like employees coming to me and saying that they like living in Warner Robins, GA, but they are considering moving to Atlanta because they are going to be able to make more money and

provide a better education opportunity for their children, because

there is such a significant difference in that wage-grade scale in

Atlanta and in Warner Robins.

And I should have mentioned this story earlier, but I will close

with this, Mr. Chairman, and I think you will appreciate this. I

was on the line 1 day talking with a particular individual who is

a wage-grade employee. And he related a story to me of a guy who

worked next to him doing the exact same job, who was fired from

his position by the Air Force for the right reasons. He just simply

was not doing his job. Two weeks later he is hired by the contractor, brought back to the same job, right next to this individual, and

he is making $4 to $5 an hour more than the wage-grade employee.

Now, when we talk about morale-busting, folks, that will bust

your morale of your work force. And everybody out there knew the

guy should have been fired and he shouldn’t have been hired by the

contractor, but he was. And it caused some very serious problems

just in that one particular instance.

Mr. Chairman, I thank you very much and I apologize for going

probably too long.

Mr. SCARBOROUGH. Actually, you were given 5 minutes and you

went 4 minutes and 59 seconds. I would like to also congratulate

you on using the official word, which is now in the lexicon of all

Republicans, by accusing Mr. Winstead of a ‘‘fuzzy’’ answer. I

thought that was very good. At least he did not go to the ‘‘fuzzy

numbers’’ thing. And notice Mr. Winstead did not sigh while you

were asking the questions. I think we have elevated this debate to

a higher level than others.

So, Mr. Chambliss did ask a question that I did not understand

the answer to and would like a clarification. I guess it would be

easy for people from a distance from Washington, DC, who have

been to Macon, GA and Atlanta, GA, to say, gee, they really are

two separate types of cities, and maybe we could understand about

the wage differences until he brings up the fact that Rhode Island

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is connected to Boston, all of Rhode Island, and Monterey is connected to San Francisco.

And I don’t know if—I am sure you have been in Monterey and

San Francisco and Rhode Island and Boston. Obviously, two very

distinct cultures. And I would think that somebody that is familiar

with those areas, even more distinct than Macon and Atlanta.

What was your answer as to why Rhode Island was in the same

wage area as Boston, and Monterey the same as San Francisco, but

Macon not connected with Atlanta?

Mr. WINSTEAD. The General Schedule has a locality pay system

and under that system we have 32 locality pay areas, many fewer

than under the Federal wage system. Those locality pay areas are

designed to coincide with metropolitan statistical areas. And the

boundary of the Boston metropolitan statistical area includes many

of the—much of the eastern part of Massachusetts, but it did not

include portions of Rhode Island. And, similarly, in the San Francisco area, the San Francisco metropolitan area does not include

Monterey County.

However, the Federal Salary Council, which is responsible for

making recommendations regarding the administration of the

white-collar pay system, recommended to us last year that those

two locations that immediately adjoin Boston in the one case and

San Francisco in the other, should be added to those localities for

the General Schedule locality pay purposes. They presented—the

individuals from those areas presented compelling cases to the Federal Salary Council and the Federal Salary Council subsequently

recommended to us that those changes be made. And the PAYGEN

has agreed to those changes.

Mr. SCARBOROUGH. I guess that is what I am saying. I am not

taking this up with you here, but those people that made those arguments and made those decisions were inaccurate. Again, you

look at San Francisco, just go a little bit south to Los Gatos or to

Palo Alto or further south to San Jose, those areas are radically

different than San Francisco; but you keep going south to Monterey, and I think you are just in a completely different world. And

to connect those areas and to connect Rhode Island with Boston—

some parts of Rhode Island are fairly rural. I just think it’s—I just

don’t see the consistency there. And certainly I think, Mr.

Chambliss, that is something that, certainly to me at least, would

be a compelling argument to connect Macon with Atlanta.

Let me ask a question about retention and recruitment. Mr.

Blanchard, have you discussed the issues with OPM as far as your

requests for bonuses and other incentives to help for retention and

recruitment?

Mr. BLANCHARD. That request has gone to OPM via OSD, and it

is under active consideration by OPM at the present time and we

have discussed it. They are obviously aware that we are in favor

of it and that it provides an additional set of flexibilities, as I indicated, that would be useful to target recruiting and retention.

Mr. SCARBOROUGH. OK. And, of course, Mr. Davis testified earlier that he did not think that would be enough and that was a

piecemeal solution. But, still, are you confident that they are going

to end up accepting that proposal from the Air Force?

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Mr. BLANCHARD. I hope so. I hope so. I think that together, as

I said, with the administrative flexibilities that are in the Federal

wage system already—that is, the ability to set advanced in-hire

rates and the ability to set special pay rates on an occupational

basis—this would be more flexibility to target at specific recruitment and retention problems within a particular wage area. And

it is cost effective in that it allows you to target to the specific area

where there is a problem, rather than applying a generalized increase that may or may not solve other problems.

Mr. SCARBOROUGH. Mr. Winstead, has OPM made a decision?

Are they close to making a decision? Can you give us an update?

Mr. WINSTEAD. We have not yet made a decision but I believe we

are very close to reaching a conclusion of our review of the request

that we received from the Department of Defense, and that it is

very likely that we will make that decision very quickly.

Mr. SCARBOROUGH. What criteria is OPM using right now to

come to a decision on the Air Force request?

Mr. WINSTEAD. We are looking at the question about which

groups of employees generally are eligible to receive these kinds of

bonuses and make—taking a look at whether or not we believe it

would be appropriate to extend that authority to the Federal wage

system.

Mr. SCARBOROUGH. Has OPM extended that authority to other

agencies?

Mr. WINSTEAD. We have extended that authority to other groups

of—other pay systems outside the general pay schedule in the past,

yes.

Mr. SCARBOROUGH. Can you cite a few of those?

Mr. WINSTEAD. I could get you a list of those for the record.

Mr. SCARBOROUGH. If you could just, in the next 2 weeks if you

could, and we will certainly put that in the record.

OK. I appreciate it. Mr. Chambliss, do you have any additional

questions or comments?

Mr. CHAMBLISS. No, Mr. Chairman, I think that covers it. Thank

you very much.

Mr. SCARBOROUGH. Great. Thank you. I thank both of you gentlemen for coming and testifying today. Certainly it was helpful. Mr.

Davis, I thank you again. And, Congressman Chambliss especially,

thank you for bringing this issue to the forefront.

I ask unanimous consent that the statement of Elijah Cummings,

ranking member, be entered in the record.

And I ask unanimous consent that the statement of Colleen M.

Kelley, the president of the National Treasury Employees Union,

be included as a part of the record.

Without objection, so ordered.

We are adjourned.

[Whereupon, at 11:25 a.m., the subcommittee was adjourned.]

[The prepared statement of Hon. Elijah E. Cummings and additional information referred to follows:]

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