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Washington, D.C.—The administration’s efforts to compete the jobs of as many as half of the federal workforce against the private sector continue to take a toll on federal employees even when they prevail in the public-private competition for their work.

Today the Internal Revenue Service (IRS) announced that IRS employees have put together a winning bid in their efforts to retain the work of the submission processing files function, but at a significant cost. The in-house group of employees, known as the Most Efficient Organization (MEO), won the work by giving up valuable benefits.

Under the new structure, the work will now be performed by hundreds of “intermittent” employees, as opposed to full-time, part-time or seasonal employees. In the federal government, intermittent employees have no fixed work schedule and generally are not eligible for sick or annual leave, health or life insurance benefits, or Thrift Savings Plan participation.

“It is clear,” said National Treasury Employees Union President Colleen M. Kelley, “that federal employees have their backs against the wall and feel a great deal of pressure to give up critical benefits in order to hold on to a small measure of their employment. This is not how an employer should treat its own employees.”

Currently the work is performed by 843 employees (82 of whom are intermittent employees) at eight service centers across the country. The workforce will

be reduced to 677 employees. Only 98 of those positions will be permanent; 124 positions will be temporary and the remaining 455—the bulk of the jobs—will be intermittent workers. These employees deal with the handling and storage of tax returns and supporting documentation after it is processed.

In order to retain the work, and compete against private companies that may offer substandard pay and few if any benefits, the employees often must structure their bid in ways that almost inevitably result in the loss of federal jobs, Kelley said, but “this is one of the worst situations NTEU has encountered.”

There is a much better way than pitting one group of workers against another to improve the delivery of federal services, said Kelley.

The better course—for federal employees, agencies and taxpayers—is for agencies to work with their employees on the continuous improvement of work processes. “Meaningful employee involvement is the surest path to efficient, effective delivery of government services,” President Kelley said.

She added: “The turmoil, chaos and anxiety generated for employees by this administration’s relentless drive to contract out federal work is having the opposite effect,” calling the inevitable negative impact of forcing federal employees into a competition for their jobs “the worst aspect of this for everyone involved, including taxpayers.”

The public-private competition that led to the files function decision was conducted under Office of Management and Budget (OMB) Circular A-76, which sets out the rules for federal contracting. President Kelley and NTEU have long led the fight against runaway federal contracting.

The new structure will be put into place by June of 2006 but NTEU will immediately begin to implement an agreement the union reached with the IRS in an effort to mitigate the impact on employees.

That agreement calls for directly impacted employees to receive a reassignment preference for all IRS vacancies at the same or lower grade than their present position; an early out/buyout program next January if all directly impacted employees have not already been placed through the reassignment preference program; a job sharing and job swap program; indirect buyouts involving the jobs of employees not directly impacted by the contracting decision; and administrative time for the use of outplacement services.

NTEU is the largest independent federal union, representing 150,000 employees in 30 agencies and departments, including some 94,000 in the IRS.