Federal Managers Association

For more information on the TSP, please visit: www.tsp.gov.

FMA SUBMITS TESTIMONY ON LOCALITY PAY, SENATE BILL MOVES ON

On June 26, 2008, the House Oversight and Government Reform Subcommittee on the Federal Workforce, the Postal Service and the District of Columbia held a hearing entitled, In Search of Equity: An Examination of Locality Pay . The Federal Managers Association (FMA) submitted written comments for the record on the inequity of pay systems in Alaska, Hawaii and the U.S. Territories.

Federal employees who reside in Alaska and Hawaii receive a tax-free non-foreign area cost of living adjustment (COLA) in their pay; however, COLA is not credited to basic pay for retirement purposes and residents outside the contiguous United States do not receive the locality pay benefit most federal employees enjoy. This practice has a devastating effect on the retirement benefits rightly earned by these hardworking civil servants. Federal employees who reside in Alaska and Hawaii are denied these payments solely because they reside in these states, despite the fact the cost of living in these areas consistently ranks among the highest in the nation.

In his written testimony, FMA National President Darryl Perkinson stated, “High locality pay in the continental 48 states lures managers, high-level technicians, and engineers to leave Hawaii and Alaska to seek higher pay and an increased annuity towards the end of their careers. With the Los Angeles area offering a 25.26 percent locality adjustment and the San Francisco area offering 32.53 percent, it is easy to see why employees nearing the end of their careers would be looking to complete their final three years in these cities. Specific data to document this migration is hard to come by, but the stories are endless.”

For the federal government to remain the employer of choice, it must offer a competitive salary. Locality pay takes into account the cost of labor in a given area and was originally enacted to close the gap between public and private sector wages. Today, managers and supervisors in Hawaii are facing real retention and recruitment issues and we need to expedite a COLA to locality pay conversion in order to compete with not only the private sector but also our federal counterparts on the mainland.

Recently, Senators Akaka (D-Haw.), Inouye (D-Haw.), Stevens (R-Ak.) and Murkowski (R-Ak.) introduced legislation, S. 3013, the Non-Foreign Area Retirement Equity Assurance Act, which proposes a three year phase-in of locality pay combined with an annuity buy-in aimed at stabilizing the current retirement eligible workforce. The legislation also advises a 35 percent offset to COLA to protect the pay of all federal employees as they transition to locality pay. On June 25, 2008, the Senate Homeland Security and Governmental Affairs Committee passed the bill unanimously.

Perkinson concluded his written statement by saying, “COLA served its purpose half a century ago. It is now outdated and acts as a barrier to federal employment. By acting now and implementing this market-oriented approach to determining local salaries, Congress can arm Hawaii and Alaska federal managers with one more tool to attract and retain today’s highly mobile and talented workforce.”

For more information on the hearing, please visit: http://federalworkforce.oversight.house.gov/story.asp?ID=2028.

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WHAT’S HAPPENING ON CAPITOL HILL?

SENATE PANEL APPROVES LESS FUNDING FOR SSA EXPENSES

On June 26, 2008, the Senate Appropriations Committee approved the fiscal year 2009 Labor, Health and Human Services, Education and Related Agencies legislation at a cost of $154.9 billion, $9.5 billion over President Bush’s request.

Funding for the Social Security Administration (SSA) falls under the legislation. The bill provides $10.4 billion for the agency’s administrative expenses of the SSA aimed at reducing the backlog of disability claims. The amount is $50 million over the President’s budget request and $632 million more than fiscal year 2008.

However, the House version of the bill provides for $100 million above the President’s request, equal to that of SSA Commissioner Michael Astrue’s request for the agency in FY09. Going even further, the House and Senate agreed to provide $240 million above the President’s request in the Concurrent Resolution on the Budget for Fiscal Year 2009 (S.Con.Res. 70). “We at FMA believe that $10.567 billion in funding will allow the agency to fulfill its mission in serving the American people,” commented FMA National President Darryl Perkinson. “SSA needs the additional funds to address the severe backlog in disability hearing requests. Currently, the number of pending hearing requests at the Office of Disability Adjudication and Review is over 750,000, and receipts continue to climb. The average processing time is now over 500 days, and in some offices it is as high as 800.”

“Programs administered by SSA provide benefits to more than 50 million Americans. It is crucial that the agency receive the full $240 million above the President’s request in order to adequately serve the American people,” Perkinson went on to say. “Staffing levels at SSA are at their lowest since the early 1970s. While the action taken by the Subcommittee is certainly a step forward, any additional funding will have a direct impact on SSA’s ability to hire necessary staff, and in turn, have an immediate effect on this unprecedented backlog.”

APPROPRIATIONS BILLS CONTINUE TO MOVE THROUGH CONGRESS

Despite the widespread belief that Congress will fail to pass any appropriations bills until the new Administration enters office in January, the House and Senate Appropriations Committees continue to work on the funding bills.

On June 25, 2008, the House Appropriations Committee approved the Financial Services bill, which included a 3.9 percent pay raise for federal employees. In its entirety, the bill would cost $22.4 billion, $200 million above the President’s request, and fund the Small Business Administration, the Internal Revenue Service, and the District of Columbia, among others. The Senate Committee will consider its version this week.

Both the House and the Senate Committees have finished their work on the fiscal year 2009 Commerce/Science/Justice bill (S. 3182). The House version of the bill contains $56.9 billion in funding, $2.8 billion above the President’s request. Agencies funded in the bill include the Departments of Commerce and Justice and all the agencies under their jurisdiction, as well as our nation’s science programs.

Additionally, both the House and the Senate Committees have finished their work on the fiscal year 2009 Homeland Security bill (S. 3181). The Senate version invests $41.3 billion in measures that are “the nation’s highest-priority security projects.” This includes an increase of nearly $2.6 billion above President Bush’s budget request and an increase of $2.6 billion above the FY08 funding level. The legislation funds border security, immigration and transportation security programs.

The House Appropriations Committee has also completed its work on the Water and Energy and the Military Construction/Veterans Affairs bills. The $33.265 billion Water and Energy bill ($2 billion above the President’s request) funds our nation’s water infrastructure as well as the Department of Energy (DOE). Of the total funding, $27.2 billion is directed at DOE. The Mil Con/VA bill provides $24.8 billion for military construction, mostly due to the costs of implementing the latest Base Realignment and Closure (BRAC) and plans to increase the size of the Army and Marine Corps. The Department of Veterans Affairs would receive $47.7 billion under the bill, with most of it going directly to medical care.

For more information on the FY09 appropriations bills, please visit: http://thomas.loc.gov/home/approp/app09.html.

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WHAT’S NEW IN THE EXECUTIVE BRANCH?

MORE INFORMATION NEEDED TO MANAGE BRAC IMPACT

According to a report by the Government Accountability Office (GAO), communities need more information and assistance to deal with the next Base Realignment and Closure (BRAC) round.

Due to several simultaneous Department of Defense (DOD) force structure and basing initiatives, 20 installations are expecting a combined net growth of over 173,000 military and civilian personnel, not including family members and contractors, over fiscal years 2006-2012. Although communities surrounding these installations can expect to realize economic benefits in the long term, DOD has identified these 20 to be substantially and seriously impacted in terms of their ability to provide infrastructure to accommodate the growth.

Communities surrounding Department of Defense growth installations have begun to identify infrastructure needs to help support expected personnel growth in general terms, but planning efforts have been hampered by a lack of consistent and detailed information about anticipated DOD personnel movements, according to GAO.

In order to assist communities in planning to provide the infrastructure necessary to support defense-related growth and to ensure quality of life for members of the armed forces, their families, and other members of surrounding communities, GAO recommended that the Secretary of Defense direct the Secretaries of the military services and the Commandant of the Marine Corps to develop and implement guidance initiatives. For timely, complete, and consistent dissemination of DOD planning information such as estimated timelines and numbers of personnel relocating, as well as demographic data such as numbers of school-aged children, GAO recommended that such initiatives be in place no later than the end of fiscal year 2008, with information updated quarterly.

The GAO report, GAO-08-665, can be accessed at www.gao.gov.

INTERNAL REVENUE SERVICE MODERNIZATION ON TRACK

On June 24, 2008, the Treasury Inspector General for Tax Administration (TIGTA) released its annual assessment of the Internal Revenue Service’s (IRS) Business Systems Modernization program. According to the Inspector General (IG), the IRS has achieved success when the Modernization Program followed its systems development and management guidance.

The Modernization Program, which began in 1999, is a complex effort to modernize the IRS’ technology and related business processes. The program aims to replace the IRS’ computer system within 15 years. In 2005, delays in the program and cost issues led the agency to take over the primary role as the systems integrator , replacing the contractor, Computer Sciences Corp.

According to the report, the IRS has continued to improve its abilities and processes that are critical to achieve success in modernizing its business systems. Since July 2007, the IRS has implemented further capabilities and provided improvements to taxpayers and stakeholders. The Modernization Program has also improved contract negotiations and management practices, assumed more responsibility for Program integration, expanded the Information Technology Modernization Vision and Strategy, and continued addressing organizational and Program concerns through the Highest Priority Initiatives process.

The Modernization Program effort involves integrating thousands of hardware and software components and must be done while replacing outdated technology and maintaining the current tax system. The IRS has achieved some success in addressing these crucial challenges, but it still must overcome significant barriers to manage the inherent risks of modernization and deliver a level of service American taxpayers expect, according to TIGTA.

For more information on the report, please visit: www.ustreas.gov.

WHITE HOUSE REQUIRING ALL AGENCIES TO VET CONTRACTORS

On June 9, 2008, President Bush amended Executive Order 12989, directing all federal departments and agencies to require contractors, as a condition of each future federal contract, to agree to use an electronic employment eligibility verification system – designated by the Secretary of Homeland Security – to verify the employment eligibility of all persons hired during the contract term and all persons performing work within the United States on the federal contract.

"A large part of our success in enforcing the nation's immigration laws hinges on equipping employers with the tools to determine quickly and effectively if a worker is legal or illegal," said Homeland Security Secretary Michael Chertoff. "E-Verify is a proven tool that helps employers immediately verify the legal working status for all new hires."

Operated by Citizenship and Immigration Services in partnership with the Social Security Administration, E-Verify is an online system through which employers can cross check the names of new hires and Social Security Numbers. More than 69,000 employers currently rely on E-Verify to determine that their new hires are authorized to work in the United States. Employers have run more than four million employment verification queries so far in fiscal year 2008. Of those queries, 99.5 percent of qualified employees are cleared automatically by E-Verify.

To view the Executive Order, please visit www.whitehouse.gov.

IRS ADJUSTS MILEAGE RATE, GSA HOLDS BACK

Last month, the Internal Revenue Service (IRS) announced an increase in the optional standard mileage rates for the final six months of 2008. The rate will increase to 58.5 cents a mile for all business miles driven from July 1 through December 31, 2008. This is an increase of eight cents from the 50.5 cent rate in effect for the first six months of 2008.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. "Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The General Services Administration (GSA) also announced plans to increase the mileage reimbursement rate for relocation of federal employees to 27 cents a mile, up from 19 cents, consistent with the Internal Revenue Service rate change, effective July 1. However, GSA has yet to determine whether to change the existing federal reimbursement rate of 50.5 cents a mile, and will consult the Departments of Transportation, Defense and other stakeholders, reporting adjustments to Congress and fulfilling other legal requirements.

For more information, please visit: www.irs.gov.

GSA ADMINISTRATOR LEAVING, NEW HEAD NOMINATED

On June 25, 2008, President Bush nominated James A. Williams to be Administrator of General Services Administration (GSA). Earlier that day, GSA announced that David Bibb, who has been serving as acting administrator of the agency since Lurita Doan resigned in April, would retire from government on September 1.

Mr. Williams currently serves as Commissioner of the Federal Acquisition Service at the General Services Administration. Prior to this, he served as Director of the U.S. Visitor and Immigrant Status Indicator Technology (US - VISIT) Program at the Department of Homeland Security. Earlier in his career, he served as Deputy Associate Commissioner for Program Management in the Business Systems Modernization Office at the Internal Revenue Service. Mr. Williams received his bachelor's degree from Virginia Commonwealth University and his MBA from The George Washington University.

For more information visit: www.whitehouse.gov.

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GET INVOLVED AT THESE EVENTS!

REGISTER NOW FOR FMA’S 17TH ANNUAL MID-YEAR CONFERENCE!

Please join us for FMA’s 17th annual Mid-Year Conference and Management Training Seminar, August 6 – 9, 2008 in Philadelphia, Pennsylvania! This year’s Conference, Where Leadership in Government Began, will be held at the Sheraton Society Hill Hotel. Conference attendees will receive a special room rate of $149/night. You can make reservations by calling the hotel at 215-238-6000 and be sure to ask for the special rate for the Federal Managers Association Mid-Year Conference. The special rate is available August 3 – 10, 2008.

FMA members are now able to register for the conference via FMA’s Web site at www.fedmanagers.org. Fees for the Conference are as follows:

Early-bird: $325 (until June 27, 2008), Regular: $375, (until July 18, 2008), and Late: $400 (until August 1, 2008). Please continue to check www.fedmanagers.org for the most up-to-date information!

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Long Term Care Partners, LLC , FMA Corporate Partner. Long Term Care Partners is the administrator of t he Federal Long Term Care Insurance Program. Sponsored by the U.S. Office of Personnel Management, the Program is available to Federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and their qualified relatives. With more than 210,000 enrollees, it is the largest employer-sponsored long term care insurance program in the country. FLTCIP policies are simple to understand and offer enrollees some distinct advantages, including comprehensive coverage, competitive and stable rates, international coverage, and administrative service standards that are the highest in the long-term care insurance industry. Policies are sold direct through a highly-trained, non-commissioned staff with no high pressure sales tactics – simply sound advice. Visit www.LTCFEDS.com or http://www.opm.gov/insure/ltc/index.asp for more information.

Blue Cross Blue Shield Association Federal Employee Program, FMA Corporate Partner: The Blue Cross and Blue Shield Association represents the independent, locally operated Blue Cross and Blue Shield Plans. The 40 local member companies of the Blue Cross and Blue Shield Association have provided millions of families with top-quality, affordable health insurance for more than 70 years. For the one in four Americans who carry Blue Cross and Blue Shield cards, the Blue Plans symbolize health security. Visit www.fepblue.org and join the best, most-recognized group of health insurance providers in the world.

GEICO, FMA Corporate Partner: GEICO was created over 60 years ago to insure Federal employees. Over the years GEICO has continuously strengthened its affiliation with the Federal workforce. Today GEICO has a special program established to support the Federal community. GEICO’s Federal program participates in the following organizations and programs: GEICO Public Service Awards, which have honored Federal workers (active and retired) who have contributed to the public good since 1980; and GEICO Federal Leave Record Cards, which for over 40 years have been provided by GEICO to Federal employees, free of charge, to help them track their annual leave. Find out how much you could save with GEICO auto insurance as an FMA member by getting a line-by-line rate quote at: www.geico.com

Shaw, Bransford, Veilleux and Roth, P.C. , (SBVR) concentrates its law practice on the representation of Federal employees, with a special emphasis on the representation of executives and managers. SBVR serves as General Counsel to the Federal Managers Association and is uniquely situated to recognize the interests and viewpoints of Federal managers. For up to two free half-hour legal consultations and reduced legal fees as an FMA member, please visit: www.shawbransford.com

The Federal Managers Association and Management Concepts have teamed up to present the Federal Managers Practicum — a targeted certificate program for Federal managers. As the official development program for FMA, the Federal Managers Practicum helps FMA members develop critical skills to meet new workplace demands and deepen their managerial capabilities. FMA’s leadership fully recognizes the need to prepare career-minded federal employees to manage the demands of the 21 st century workplace with greater competence and fully supports this unique and comprehensive certificate program. For more information, please visit: www.managementconcepts.com/fmp/fmpodp.asp

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The Washington Report is published biweekly by the Federal Managers Association.
Jessica Klement, Editor; FMA Staff Writers.

The Federal Managers Association, established in 1913, is the oldest, largest, most influential association representing the interests of the nearly 200,000 managers, supervisors and executives serving in today’s Federal government.

1641 Prince Street ~ Alexandria VA 22314-2818 ~ (703) 683-8700 ~ FAX (703) 683-8707 ~ E-Mail Info@fedmanagers.org

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