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Agencies brace for exodus of contracting professionals

Apr. 3, 2013 - 10:23AM   |  

Agencies are bracing for what could be a mass exodus of seasoned federal contracting professionals.

Of the government’s 36,208 acquisition professionals, 13 percent — or 4,611 — are eligible to retire, according to 2012 data from the Office of Personnel Management. Another 6,386 employees, 18 percent of the workforce, are eligible to retire in one to five years.

At agencies with smaller staffs, such as the Federal Retirement Thrift Investment Board and Small Business Administration, those percentages are much higher.

“Our challenge is we don’t have a crystal ball … to know how many are going to retire next year versus the year after,” said Jan Frye, the deputy assistant secretary for acquisition and logistics at the Veterans Affairs Department. “We certainly have to plan on a good share of our workforce, and these are all seasoned people … departing in the next year or two.”

The number of retiring acquisition professionals jumped from 805 in 2009 to 1,239 in 2012, according to OPM’s FedScope site.

Defense Department agencies and the military services saw the bulk of retirements, including the Defense Contract Management Agency.

“What are we doing to retain these high-quality folks,” Joseph Jordan, administrator for the Office of Federal Procurement Policy at the Office of Management and Budget, said last month at an acquisition conference. “It’s going to be one of the most important things we deal with over the next few years.”

Governmentwide, agencies have struggled to recruit, train and retain qualified contracting professionals, who negotiate and administer more than $500 billion worth of goods and services annually. Senior leaders fear the combination of pay-scale freezes, increased workloads and fewer resources will drive more of their experienced employees out the door, leaving far fewer qualified people to negotiate tough bargains with vendors, develop cost-savings strategies and administer complex contracts.

“I understand all the public perception issues, but if you’re an 1102 [contracting professional] who has been working your butt off in these tough times, that doesn’t make you feel very valid,” Jordan said of the pay freeze, now in its third year.

VA’s Frye is also concerned about proposals to base pension calculations on an employee’s highest five years of salary, instead of the highest three. If such proposals are approved, then senior employees will leave government a lot sooner to avoid lower pensions, he fears.

An increase in retirements is an issue across government. But the impact could be especially dire across the acquisition community, where there are relatively few midlevel people to fill more senior positions and billions of dollars at stake.

As contracting staffs shrink and more highly experienced employees leave, agencies will find it harder to get better prices and performance from their vendors, said John Salamone, a vice president with consulting firm Federal Management Partners and a former OPM official.

To stem the tide, agency leaders will need to keep their aging contracting staffs engaged so they do not leave as soon as they become eligible to retire, Salamone said.

Retirement shouldn’t be the only concern, said John Palguta, vice president for policy at the Partnership for Public Service. If employees go to the private sector, that’s still a loss to government.

And those losses are not being offset by new hires: 1,833 contracting professionals left government last year, and the government hired only 1,694 — a net loss of 139.

And even when there are new hires, they fall short of making up for the brain drain of losing highly experienced employees, Frye said. It takes five to seven years for new employees to understand the contracting business and be productive, he said.

Frye said the result is that those remaining senior procurement officials feel more pressure to carry a bigger burden while less-experienced employees learn the ropes.

The concern is “we won’t execute our mission, or we won’t execute it in a way that safeguards taxpayer funds, or we will do it in such a way that stresses out people,” Frye said.

To speed workforce development, VA is hashing out a program where universities agree to teach federal acquisition courses and VA commits to hiring graduates at local contracting offices in those cities.

Angela Billups, associate deputy assistant secretary for acquisition at the Health and Human Services Department, said people who may not have been thinking about retiring before are retiring now.

To fill vacancies and hold on to their rising stars, some federal hiring officials are promoting inexperienced workers too quickly, Billups said. In some cases they get to GS-13 in three years and can’t perform.

HHS is building its workforce through small group discussions, where senior and midlevel employees and interns review contract cases and discuss what did and did not work, and new approaches, Billups said.

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