Home Media Center News Releases

Washington, D.C.—Despite strenuous and lengthy union efforts to get the Internal Revenue Service to restructure its information technology operation in ways that would avoid layoffs, the agency instead made “an unnecessary and unfortunate choice” that will cost the jobs of at least 218 IT workers in ten sites across the country, the leader of the union representing IRS employees said today.

The multiple job losses will occur because the IRS chose to compete this work against the private sector.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) called that decision “the direct result” of the IRS “doing its best to meet the administration’s unstated quota” of each agency contracting out a certain percentage of federal jobs.

“If these changes had been made as NTEU urged,” President Kelley said, “through reorganization and streamlining efforts, then the IRS would not be able to count job losses toward the administration’s clearly defined goal” of competing one out of every two federal jobs against the private sector.

Even though the function will remain in the IRS, she said, the result is the same—“a large number of employees all losing their jobs at the same time, and a likelihood of a detrimental impact on

service to the public.” NTEU had strongly encouraged the agency to use attrition, retraining and similar steps. “That would have gotten the workforce where the IRS wants it,” she said.

The NTEU leader urged the IRS to use all available programs—such as indirect buyouts, priority placement and a hiring freeze—to mitigate to the maximum extent possible the impact on affected employees.

The jobs cuts are in the agency’s Modernization and Information Technology Services (MITS) operation. In the ten large IRS campus operations in cities across the country, MITS employees provide information systems products —both hardware and software—and services that aid in the processing of tax returns and in providing customer service.

The number of employees performing this function will be reduced to 60 employees from 278, with only five in each location and a quality control center; presently, the number of employees in each of the 10 centers working in MITS Campus Operations range from 19 to 36.

The decision to keep the work in-house—although with a sharply-reduced workforce—was made after a public-private competition conducted by the IRS under rules established by the Office of Management and Budget (OMB) in a document known as Circular A-76.

From its first days in office the administration has made contracting out of federal jobs one of its principal management priorities. At one time, acting through OMB, the administration had actual numeric quotas of jobs to contract out—five percent in one year and a total of 15 percent over a two-year period—that agencies were supposed to meet.

It has since backed away from formal quotas, but, President Kelley said, “the heads of federal agencies clearly still feel the pressure to contract out.”

At the IRS, the MITS function is one of a number of areas the agency has under various stages of study for possible contracting out. Yesterday, the IRS announced that 274 agency employees will lose their jobs as the result of a competitive sourcing study of its Area Distribution Centers (ADCs).

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including about 98,000 in the IRS.