United States General Accounting Office

GAO Testimony

Before the Subcommittee on Trade

Committee on Ways and Means

House of Representatives

For Release on Delivery

Expected at

10:00 a.m. EST

Tuesday

March 11, 1997

U.S. CUSTOMS SERVICE

Varied Reaction to the

Labor-Management

Partnership Concept

Statement of Norman J. Rabkin

Director, Administration of Justice Issues

General Government Division

GAO/T-GGD-97-54

Summary 

U.S. Customs Service: Varied Reaction to the

Labor-Management Partnership Concept

Executive Order 12871, October 1, 1993, required the head of each federal

agency to create labor-management councils to help involve employees

and their unions as full partners. These partnership councils are to identify

problems and craft solutions to better serve the agency’s customers and

accomplish its mission. In June 1994, the U.S. Customs Service and the

National Treasury Employees Union (NTEU) entered into a partnership

agreement that established 19 goals, set up a National Partnership Council,

and stated that NTEU will participate in agency operational meetings and

groups to ensure NTEU involvement in decisions that affect the workforce.

In February 1997, Customs and NTEU implemented a new national contract.

GAO’s limited work to date at Customs headquarters and selected field

locations revealed a variety of opinions regarding Customs-NTEU relations

since implementation of the executive order. Most of the Customs

managers GAO interviewed characterized their relationship with NTEU

chapters as better. Most of the NTEU chapter presidents GAO spoke with

also said the relationship was better. The views of the Customs first-line

supervisors GAO interviewed were more evenly distributed among the

range of responses from “much better” to “much worse.” Customs

managers and supervisors and NTEU representatives provided similar

comments identifying advantages of the partnership concept, including

(1) faster problem resolution, (2) improved communications, and

(3) mutual involvement in decisions. Comments on disadvantages revealed

no clearly shared views.

To a limited extent, Customs has begun to evaluate the results of the new

relationship. However, these efforts have not set the groundwork for the

kind of comprehensive evaluation envisioned by the executive order and

partnership agreement. Although the Commissioner expects it to take at

least 5 years for the new relationship to become Customs’ normal

operating environment, it is not too soon to develop a formal plan for an

evaluation and to share this plan with the Subcommittee. This plan should

address several critical questions, such as the performance measures to be

used and how often an evaluation should be conducted.

Page 1 GAO/T-GGD-97-54
Statement 

U.S. Customs Service: Varied Reaction to the

Labor-Management Partnership Concept

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss labor-management activities

within the U.S. Customs Service. The Subcommittee asked us to review,

among other topics, the history of union activity at Customs and the effect

that the partnership agreement between Customs and the National

Treasury Employees Union (NTEU)—the exclusive representative of

Customs’ bargaining unit employees—had on Customs’ ability to establish

and achieve its mission-related goals. To date, we have performed

preliminary work at Customs headquarters, 5 Customs Management

Centers (CMC), 11 ports of entry around the country, the NTEU national

office, and 7 local NTEU chapters (see the appendix for a list of the CMCs,

NTEU chapters, and ports we visited). My testimony will cover information

we have obtained on the new relationship between Customs and NTEU;

Customs’ management, supervisors, and NTEU views concerning the

relationship; and our observations on evaluating this relationship.

We judgmentally selected the ports for our review focusing on the

southern border and those ports where Customs headquarters officials

told us that labor-management relations were strong and effective and

where there were less effective relationships. At these locations, we

interviewed Customs managers and first-line supervisors as well as NTEU

chapter presidents and representatives. We asked a series of questions

designed to gauge the extent of respondents’ satisfaction with and identify

their views on the advantages and disadvantages of the new relationship.

The information provided represents the views and opinions of only the

Customs officials and NTEU representatives we interviewed; it is not

statistically projectable to the entire Customs Service.

Background The Customs Service is responsible for ensuring that all goods and

persons entering and exiting the United States do so in accordance with all

U.S. laws and regulations. As of January 1997, Customs’ workforce

included about 19,500 personnel, approximately 11,200 of whom were

eligible to join NTEU. Approximately 7,200 (65 percent) of those eligible to

join NTEU had done so.

In September 1994, Customs’ report, People, Processes and Partnerships,

provided a blueprint of its plans to transform itself into an agency

prepared to meet the demands of the 21st Century. The report proposed in

general terms the agency’s vision and a three-part process to achieve this

Page 2 GAO/T-GGD-97-54
Statement 

U.S. Customs Service: Varied Reaction to

the Labor-Management Partnership Concept

vision: (1) organizational change, (2) reengineered business processes, and

(3) cultural conversion.

Customs has made progress in implementing its reorganization plan. Two

years ago we reported1

 that Customs had started to downsize its

headquarters and was planning to close its 7 regional offices and 42

district offices, replacing them with 20 CMCs. Many functions formerly

performed by the regions and districts, such as hiring and assessing fines

and penalties on companies violating trade laws, were to be transferred to

the ports. CMC and port directors we spoke with told us that the transition

of responsibility to the ports was proceeding as planned. Customs was

also proceeding with the redesign and development of performance

standards for its core business processes.

One element of Customs’ process to achieve its vision is its plan to change

its culture, including its relationship with NTEU. According to its

September 1994 report, Customs has historically been characterized by

divisive internal competition, highly visible turf battles with other

agencies, a controlling management style, and an adversarial relationship

with its employee union. To help change this relationship, Customs and

NTEU created a labor-management partnership.

The New

Labor-Management

Partnership: How It

Came About and What

It Is

On October 1, 1993, the President issued Executive Order 12871, which

called for creating cooperative labor-management relations throughout the

federal government and setting up a national council to promote

partnership. The Order required the head of each agency to create

labor-management councils at appropriate levels to help involve

employees and their union representatives as full partners with

management representatives to identify problems and craft solutions to

better serve the agency’s customers and accomplish its mission. The Order

further required agencies to bargain with unions on issues formerly

bargained on only at the agency’s discretion. These issues include

“numbers, types and grades of employees or positions assigned to any

organizational subdivision, work project, or tour of duty, or on the

technology, methods, and means of performing work.” It also called for

agencies to evaluate the progress and improvements in organizational

performance resulting from the labor-management partnerships.

1

Customs Management: Status of Reorganization and Modernization Efforts (GAO/T-GGD/AIMD-95-70

Jan. 30, 1995).

Page 3 GAO/T-GGD-97-54
Statement 

U.S. Customs Service: Varied Reaction to

the Labor-Management Partnership Concept

In June 1994, Customs and NTEU entered into a partnership agreement that

established 19 specific goals. These include involving employees (through

NTEU) before final decisions are made and managing conflict to settle or

resolve disputes faster. The agreement established a National Partnership

Council at Customs Headquarters as well as local partnership councils at

CMCs and ports. The partnership agreement states that NTEU will participate

in agency operational meetings and groups to ensure NTEU involvement in

decisions that affect the workforce. NTEU may also appoint representatives

to all task forces and groups formed by Customs for the purpose of

improving or changing work processes and procedures.

In February 1997, Customs and NTEU implemented a new National

Agreement.2

 Key provisions in the new agreement include (1) alternative

dispute resolution procedures that attempt to resolve conflicts informally

at the lowest level possible to replace the old grievance procedures;

(2) involvement of NTEU as an observer in the promotion process; and

(3) nine new issues to be negotiated locally, such as uniforms and a pilot

alternative work schedule program.

Management and

NTEU Views

Regarding Partnership

Relations

Our limited work at Customs and NTEU headquarters, 5 CMCs, 7 NTEU

chapters, and 11 ports of entry revealed a variety of opinions regarding

Customs-NTEU relations since the partnership concept had begun. When

asked to compare NTEU-management relations at the time of our visits with

the relationships before the partnership agreement, CMC directors we

interviewed characterized the relationship with the seven NTEU chapters as

better than before partnership with five, about the same with one, and

worse with one.3

 Six of the seven NTEU chapter presidents also said that

the relationship was better than before partnership; one chapter president

said that the relationship was worse. In addition, 7 of the 11 port directors

characterized the relationship with NTEU chapters as better than before, 2

said it was about the same, and 2 said it was much worse.

In addition to interviewing Customs management officials and NTEU

representatives, we asked 55 first-line Customs supervisors at the 11 ports

we visited how they would characterize the relationships at the time of our

visits between management and NTEU at their ports compared to the

2

This agreement, also known as the “contract”, replaced the prior labor-management agreement dated

May 19, 1991. As distinguished from the partnership agreement and the 19 goals, the contract sets out

44 articles governing items such as travel, attire and appearance, adverse actions, and arbitration.

3

Three CMC directors work with one NTEU chapter each, and two CMCs work with two NTEU

chapters each.

Page 4 GAO/T-GGD-97-54
Statement 

U.S. Customs Service: Varied Reaction to

the Labor-Management Partnership Concept

relationships before the partnership agreement. Their views were more

evenly distributed among the range of responses from much better to

much worse than were those of the Customs managers and NTEU chapter

presidents.4

 One supervisor told us that labor-management relations were

100-percent better now and that problems were handled informally at the

supervisor-subordinate level with less confrontation. Another supervisor

stated that in his 22 years with the Customs Service, he had never seen

better management-labor relations. On the other hand, several supervisors

described the management-NTEU relationship under the partnership

concept as “us against them.” One supervisor told us that implementation

is one-sided. Another supervisor stated that NTEU does not compromise

unless it is to its advantage.

Our limited work also identified a variety of views from managers,

supervisors, and NTEU representatives regarding the advantages and

disadvantages of the partnership concept. While our results cannot be

generalized to all of Customs, they can be summarized and characterized

in terms of the managers, supervisors, and NTEU representatives we

interviewed at the locations we visited.

A few clearly shared views emerged. Managers, supervisors, and NTEU

representatives provided similar comments identifying advantages of the

partnership concept. They generally stated that the concept has resulted in

• faster resolution of problems;

• a reduction in the number of grievances filed;

• improved communications between management and the union; and

• mutual involvement in decisions.

NTEU representatives we interviewed believed that these factors had

contributed to improved operational efficiency at the Customs Service.

Our analysis of the comments about the disadvantages of the partnership

concept and how it was being implemented at the ports we visited did not

show any clearly shared views. While individual managers, supervisors,

and NTEU representatives told us that some managers did not understand

the concept of partnership, the underlying reasons differed significantly.

Managers and supervisors generally stated that

4

Fifteen percent said it was much better, 29 percent said it was better, 33 percent said it was about the

same, 11 percent said it was worse, 9 percent said it was much worse, and 4 percent had no basis to

judge.

Page 5 GAO/T-GGD-97-54
Statement 

U.S. Customs Service: Varied Reaction to

the Labor-Management Partnership Concept

• all issues must be bargained with the union before any action can be taken

by management;5

• the partnership concept requires too many meetings and too much of

management’s time;

• while managers remain accountable for actions and results at their ports,

there is no union accountability; and

• the union will only bargain on issues that address union interests and not

on those that address the needs of the Customs Service.

NTEU officials generally raised the following concerns:

• the partnership concept is not clearly understood by management;

managers want to choose when they include NTEU in making decisions and

when they do not;

• managers are not fully trained in the partnership concept; and

• managers do not want to involve union representatives in the

decisionmaking process; they continue to want to make unilateral

decisions.

GAO Observations on

Evaluating Customs’

and NTEU’s

Implementation of the

Partnership Concept

In our January 1995 testimony on Customs’ reorganization, we concluded

that Customs’ efforts to date had the potential to position Customs to meet

its future challenges. We encouraged Customs to continue discussing both

its progress and results with this Subcommittee. Among the issues we

encouraged Customs to explore was identifying what indicators or

measurements it should use to determine the success or effectiveness of

the new relationship.

Customs’ partnership agreement with NTEU and Executive Order 12871 call

for evaluating the progress of and improvements in the agency’s

performance resulting from the partnership concept. To a limited extent,

Customs has begun that effort.

A working group met in October 1995 to review and analyze data on

partnership activities. The group questioned the accuracy of the

information it had gathered and recommended that on-site surveys be

conducted. In a memorandum to the Commissioner shortly after the

working group report, the Assistant Commissioner for Human Resources

Management concluded that Customs needed an effective way to monitor

partnership performance.

5

While this was a perception of some managers and supervisors, 5 U.S.C. 7101-35 contains specific

provisions related to which issues are and are not bargainable.

Page 6 GAO/T-GGD-97-54
Statement 

U.S. Customs Service: Varied Reaction to

the Labor-Management Partnership Concept

In April 1996, the Commissioner and the President of NTEU jointly sent all

Customs employees an “organizational climate survey” that included

questions about the partnership concept. Customs has compiled and

analyzed the results of that survey, and intends to use the data as a

baseline against which to measure the results of future surveys.

However, neither of these efforts has set the groundwork for the kind of

comprehensive evaluation envisioned by the Executive Order and

partnership agreement. In our work thus far at Customs’ headquarters and

several field locations, we have not seen any plans for an evaluation of the

impact of the partnership approach on Customs’ mission.

Cultural changes such as those promised by the partnership concept do

not occur quickly. The Commissioner told us that he expects it to take at

least 5 years for partnership to become part of the normal operating

environment throughout Customs. Nevertheless, given that Customs and

NTEU have been in this new relationship for almost 3 years, it is not too

soon to develop a formal plan for the evaluation of progress and

improvements in organizational performance resulting from this

labor-management partnership. Some of the critical questions to be

answered include:

• What performance measures should be used?

• What factors in addition to the partnership concept may be affecting

organizational performance?

• How often should an evaluation be conducted?

• Should the focus of an evaluation be at the national or the port level or

both?

Developing a plan that addresses these questions will be difficult and will

present Customs with significant challenges. It is reasonable for Customs

and NTEU not to have completed any comprehensive evaluation at this

point. However, it is also reasonable to expect that they would have begun

developing and sharing with this Subcommittee their plan for carrying out

that evaluation.

Mr. Chairman, this completes my statement. I would be pleased to answer

any questions.

Page 7 GAO/T-GGD-97-54
Appendix 

Field Locations Visited

Customs Management

Centers NTEU chaptersa Ports of entryb

South Pacific 

(Long Beach, California)

Chapter 111 

(Los Angeles International

Airport, California)

Chapter 103 

(Los Angeles Harbor,

California)

Los Angeles International

Airport 

Los Angeles Harbor

Southern California 

(San Diego, California)

Chapter 105

(San Diego, California)

Chapter 123

(Calexico, California)

San Ysidro 

Otay Mesa 

Calexico

West Texas/New Mexico 

(El Paso, Texas)

Chapter 143 

(El Paso, Texas)

El Paso 

Presidio

Arizona 

(Tucson, Arizona)

Chapter 116 

(Nogales, Arizona)

Nogales

South Florida 

(Miami, Florida)

Chapter 137 

(Miami, Florida)

Miami International Airport

Miami Seaport 

Port Everglades

aNTEU chapters that we visited represent bargaining unit employees at more ports than those we

visited.

bThe Port of Los Angeles includes the Los Angeles International Airport and the Los

Angeles/Long Beach Harbor (Terminal Island). They are represented by two separate local NTEU

Chapters—#111 and #103, respectively. We, therefore, treated them as two separate ports for

this review.

(264435) Page 8 GAO/T-GGD-97-54
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