Unions seek more pay, want contractors cut


WASHINGTON -- Unions representing the nation's 1.3 million federal workers -- about 280,000 of whom live in Maryland -- hope to take their red pencils to President Clinton's budget blueprint and find money for a bigger pay raise.

The $1.52 trillion spending plan unveiled this week allocates $1.1 billion for federal workers. The unions say that figure is $700 million short of the amount needed to fund locality pay and the annual pay increase called for under current law.

Leaders of the American Federation of Government Employees, the AFL-CIO's public employee department, the National Federation of Federal Employees and the National Treasury Employees Union want the government to cut $3.15 billion in spending on services purchased from private contractors.

"We're not asking for more money. We're asking for the law to be followed," said NFFE President Sheila Velazco. "If I were to go out to my people and say, 'I want more money for federal employees,' then that sounds like I'm asking for something I'm not due. And I'm not asking for that."

But why target private contractors? The unions say that's where most government dollars are wasted.

To back up that charge, they point to a study last month by the Office and Management and Budget that assailed the government's contracting system as bloated, wasteful and inefficient. The unions want Congress to cut 3 percent of the $105 billion spent annually on contracts, and funnel that money into pay raises.

But private contractors call this strategy an elaborate ruse to fatten federal worker paychecks by taking money from a legitimate, private work force.

"I don't understand why they think they can raise the wages of government employees by getting rid of service contract workers," said Gary Engebretson, president of the Contract Services Association of America. "They say the contractors rip off the government, and we say they don't know what they're talking about." Mr. Engebretson offered proof in the way of a 1987 study by the Congressional Budget Office that stated that contracting out work creates a savings of 15 percent on a job. Adding pension and health benefit costs over a worker's lifetime, and the savings is about 30 percent, the study said.

Mr. Engebretson said the Department of Defense employs the largest number of nongovernment workers, paying $1.6 billion to Maryland service contractors in 1992.

In Baltimore, the Defense Department spent $828,000 on prime contracts, which cover services, construction and research and development. That figure represented nearly 90 percent of the department's total spending in the Baltimore area in 1992, Mr. Engebretson said.

Federal worker unions are fighting not only for pay raises but for membership dues as well, Mr. Engebretson charged.

The average federal employee salary is less than $37,400, the unions say. This year, federal workers got a boost with the addition of locality pay, which aims to bring those paychecks up to the higher levels in the private sector.

But the unions say locality pay falls short of workers' needs. And although Mr. Clinton's proposed pay raise is more welcome than the salary freeze he sought unsuccessfully last year, the unions say this year's budget proposal still falls short.

George King, a spokesman for NTEU, said that cutting contract work complements the administration's efforts to streamline government.

"You'd have a leaner and better trained work force," he said. "We believe [that] by shaving contracting-out, the government would dTC realize more money than would even be required to fund the full pay raise."

Armed with that argument, NTEU and other unions hope to enlist allies in Congress -- and be rewarded with a pay raise.

Federal workers may well win their fight. Last year, Congress secured more than $1.6 billion for pay raises for most white-collar government workers after a long and grueling battle with the administration.

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