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News briefs: April 8, 2013

Apr. 7, 2013 - 01:17PM   |  
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Retirement numbers continue outpacing projections

More than 10,000 federal employees submitted retirement claims in March — more than twice as many as the government expected.

According to statistics released Friday by the Office of Personnel Management, 10,183 feds retired last month. The government had predicted 5,000 feds would retire in March. And March’s retirement figures are well over the 7,090 who retired in March 2012.

Some experts think the continuing increases in monthly retirement figures show the government is experiencing a troubling retirement wave. So far, 52,744 employees have retired in 2013. That is almost 51 percent more than the 34,984 who retired in the first quarter of 2012, 66 percent higher than the 31,629 who retired in the first quarter of 2011, and nearly twice the number who retired in the first quarter of 2010.

February also saw an exceptionally large number of federal employees retire: 20,374. OPM attributed that to U.S. Postal Service buyouts. But experts also think that pay freezes, announced furloughs and the threat of more pay and benefits cuts are encouraging many older employees to retire.

OPM Director John Berry referred to the alarming increase in retirements during a March 20 labor-management partnership council meeting, where he warned that cracks are starting to show in the federal workforce’s recruitment and retention efforts.

“I’ve seen it this year just in terms of the number of retirements,” Berry said. “They are continuing to climb far beyond what we originally projected.”

Despite the surprising increase in retirements, the backlog of unprocessed pension claims declined in March, from 41,103 to 36,603. OPM processed 14,683 claims last month, far more than the 11,500 it expected to process.

Berry has vowed to fix the longstanding problem of federal retirees having to wait months for their full pensions. OPM will release a plan to automate pension processing as part of the fiscal 2014 budget April 10.

OPM proposes CFC reforms

The Office of Personnel Management on April 8 will officially propose a slate of reforms it hopes will overhaul the ailing Combined Federal Campaign.

In the regulation that will be published in the Federal Register on Monday, OPM will call for:

• Holding the CFC solicitation period between Oct. 1 and Jan. 15, instead between September and December. This is to encourage donations after employees return from December vacations.

• Allowing new employees to make payroll deductions within 30 days of their hiring, instead of waiting for the solicitation period

• Eliminating cash, check and money order contributions, so only electronic pledges will be accepted. Electronic giving saves roughly $14 per pledge.

• Reducing the responsibilities of the Local Federal Coordinating Committees and renaming them Regional Coordinating Committees. Those committees would get additional training and oversight.

• Requiring charities to pay a yearly application fee to take part in the CFC campaign, as an advisory panel recommended last year. OPM hopes that would end the practice of donors paying for most campaign overhead with money deducted from their pledges.

• Creating a Disaster Relief Program that would allow federal employees to quickly contribute to relief programs within hours of a disaster such as last year’s Superstorm Sandy.

OPM will accept public comments on the proposed rule until June 7.

The changes come as the CFC is struggling with declining pledges and participation. Full results for the 2012 campaign are not released yet, but they are likely to be the lowest since 2006.

Obama takes pay cut in show of solidarity with furloughed feds

President Obama will voluntarily return 5 percent of his annual salary in a show of solidarity with at least 1 million furloughed federal workers.

“The salary for the president, as with members of Congress, is set by law and cannot be changed,” the White House said in a statement. “However, the president has decided that to share in the sacrifice being made by public servants across the federal government that are affected by the sequester, he will contribute a portion of his salary back to the Treasury.”

Obama will start cutting monthly checks to the Treasury Department this month, the White House said. Obama earns $400,000 as president, and will return $20,000.

Obama is not the first high-ranking government official to decide to give up part of his salary, even though he is not subject to furloughs. Defense Secretary Chuck Hagel on Tuesday said he would return part of his pay because hundreds of thousands of Defense Department employees are expected to be furloughed 14 work days later this year. Deputy Defense Secretary Ashton Carter also announced in February that he would do the same.

A 14-day furlough for Defense civilians would cost them 5.4 percent of their annual salary, slightly more on a percentage basis than Obama’s voluntary cut.

DoD will consider layoffs if sequester continues beyond this year

The Defense Department will consider layoffs and other long-term downsizing options if Congress doesn’t undo plans for sequesters in 2014 and beyond, according to Comptroller Robert Hale.

“We’ll have to get smaller, and we’ll have to look at some areas where we can take some more risk, get rid of more overhead and make a lot of other tough decisions,” Hale said last week at a webinar organized by the Association of Government Accountants.

“But we’re not going to have a repeat of this mess,” he said, referring to the $41 billion in across-the-board sequester cuts the Pentagon must absorb in fiscal 2013.

However, unless lawmakers and the Obama administration agree on another route, the Pentagon will have to confront similarly steep reductions each year through 2021, although it would have more flexibility to manage than is true this year.

In his 2014 budget request set for release April 10, President Obama assumes that another sequester will be avoided, Hale said. If not, the Pentagon’s substitute spending plan may include “reductions-in-force and involuntary separations” instead of furloughs, Hale said, adding that DoD wants “to start doing this with more of a scalpel and less of a meat ax.”

With a civilian workforce of almost 800,000, DoD is the government’s largest employer. While the final number hasn’t been set, “we expect the vast majority of civilians — at least at this point — to be subject to furlough” for 14 days through the end of September, Pentagon spokesman George Little told reporters Tuesday. Like other presidentially appointed, Senate-confirmed officials, Defense Secretary Chuck Hagel is exempt from furlough, but plans to forfeit a portion of his pay, Little said.

OPM cancels benefits conference

Tight budgets have forced the Office of Personnel Management to cancel this year’s benefits conference.

In a listserv e-mail Wednesday, OPM said few benefit officers from around the federal government would have been able to attend the annual conference due to a lack of funds. OPM is also canceling a fall training festival that would have been held in November, the agency said.

The agency did not say when and where the now-canceled 2013 benefits conference would have been.

“We will work to develop alternative training opportunities such as webcasts during the rest of this year,” Raymond Kirk, an OPM benefits officer said in the e-mail. “While they will not be a complete, nor in some ways sufficient, substitute for the conference, they will allow us to continue providing training for benefits officers on critical issues.”

OPM’s benefits conferences usually include workshops on benefits such as retirement, insurance, Social Security and the Thrift Savings Plan. The last five-day conference was held in Dallas in June 2012.

OPM is still planning to hold a benefits training conference next year in Pittsburgh.

Several federal agencies have canceled conferences over the last year due to budget crunches, decreased attendance and increased scrutiny after conference spending scandals at the General Services Administration and Veterans Affairs Department. Since February, GSA canceled three of its mainstay annual conferences: the GSA Training and Expo, FedForum and SmartPay Training Forum conferences that were to be held in May, July and August, respectively.

Last year, the Office of Management and Budget ordered agencies to cut travel spending in 2013 by 30 percent from 2010 spending levels.

GAO denies bid protest of controversial IRS contract

The Government Accountability Office on Tuesday denied a protest from bidders challenging the award of a big Internal Revenue Service technology contract that a top House Republican wants investigated.

The GAO ruling upholds the IRS contract to Signet Computers over challenges from Government Acquisitions Inc. of Ohio and PCi Tech of Virginia, which had raised questions about both the evaluation and source selection, according to the six-page decision.

In a letter to the IRS in February, Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, cited interviews with unnamed witnesses in asking for an investigation into whether an IRS official steered contracts to Signet.

Issa’s letter said the company had been awarded up to $500 million in federal contracts last year, all from the IRS. It also raised questions about whether Signet improperly qualified for HUBZone status from the Small Business Administration.

Issa sent his request for an investigation to the IRS. The GAO ruling was confined to specific issues raised in the protest filed by the two competitors.

While the GAO ruling noted that Signet was not a HUBZone-certified firm when a bidders list was issued June 20, the IRS pointed out the company did get certified by the time the solicitation closed on July 30. The company lists offices in Washington and Virginia.

In addition, GAO said, the solicitation was “ambiguous” as to the timing for HUBZone certification.

GAO also backed the IRS decision to deem Signet a better value, while PCi challenged whether the agency’s decision was properly documented.

Attorneys for the protestors and Signet were not immediately available for comment Tuesday afternoon.

“Although the agency’s explanation of the rationale for its award decision is brief and concise, we conclude that the award decision was reasonable and adequately documented in the source selection decision,” GAO said.

DoD contracting official charged with bribery

Federal prosecutors have charged a Defense Department contracting official in California, who purportedly referred to himself as “the Godfather” at Camp Pendelton, with bribery following an undercover sting.

Charging documents filed in U.S. District Court in San Diego late last week accuse Natividad Lara Cervantes with steering a $4 million flooring contract in exchange for tens of thousands of dollars.

Wearing a hidden buttonhole audio and video recorder, an undercover informant met with Cervantes last month and agreed to pay him $40,000 for help securing the upcoming Camp Pendelton flooring contract, according to federal prosecutors.

At one point during the conversation, prosecutors said, Cervantes picked up the phone and called a contracting official to ask about the contract, charging papers say.

Told the award wasn’t “set in concrete”, Cervantes replied, “Okay, but you’ll do your magic, right?” according to the documents.

Cervantes is the supervisor for construction and service contracts inspection at Camp Pendelton, according to the complaint. An attorney for Cervantes was not listed on the federal court docket. The Los Angeles Times reported that he was arrested and booked into the Metropolitan Correctional Center in San Diego on Thursday.

The charges against Cervantes come just weeks after three defense contractors who worked at Camp Pendelton pleaded guilty to stealing more than $3 million in medical equipment that was supposed to go overseas to treat injured Marines.

Man sentenced for embezzling from SSA employees association

A retired Social Security Administration manager was sentenced to 15 months in prison Wednesday after pleading guilty to embezzling more than $400,000 from an SSA employees association.

Salvatore Petti, 76, will also have to spend three years on supervised release and pay some $570,500 in restitution, under the sentence from U.S. District Judge J. Frederick Motz in Baltimore. The Baltimore U.S. attorney’s office, which prosecuted the case, announced the sentence in a news release.

Petti, who worked for the Social Security Administration for more than 40 years, retired in 1995 as a GS-15 district director. But he continued to serve as treasurer of the Employees Activities Association, a private organization based at SSA’s Baltimore-area headquarters that ran a day-care center and provided other services to members, according to court filings.

For Petti’s work as treasurer, the association paid him about $60,000 per year from 2005 to 2008, according to the release. But in the course of an audit started in 2009, the SSA inspector general found that Petti had not reported any association income to the IRS for several years. The next year, Petti filed amended tax returns that included the income, but were padded with false expenses for travel, supplies and utilities, the release said. He was also stealing money from the association by writing himself checks for administrative and general expenses, according to the release.

In a December plea agreement on wire fraud and tax evasion charges, Petti admitted to spending some $430,000 in association funds at Atlantic City casinos from 2005 to 2010 and acknowledged failing to pay federal income taxes on some of the money. As part of the plea deal, he must pay almost $300,000 to the employees association and about $271,000 to the IRS. Petti’s lawyer, Caroline Ciraolo of Baltimore, could not immediately be reached for comment Wednesday.

Feds give their leadership lowest scores

Budget cuts, staffing reductions and an ongoing pay freeze have pushed federal employees’ satisfaction with their leadership to an all-time low, according to a new report by the Partnership for Public Service.

The leadership score fell from a 54.9 out of a possible 100 in 2011 to 52.8 in 2012, the lowest score since the organization began tracking the data in 2003.

Large agencies that saw the biggest drop in their scores include the Veterans Affairs Department — which fell 4.8 points from a score of 52.3 in 2011 to 47.5 in 2012.

The Agriculture Department dropped two points from 52.7 in 2011 to 50.7 in 2012.

The analysis stems from the Federal Employee Viewpoint Survey, conducted by the Office of Personnel Management, and takes into account questions regarding fairness, empowerment, leadership and supervisors, according to the Partnership for Public Service.

Other agencies that saw steep drops in their leadership scores include:

• The Federal Maritime Commission dropped 17.2 points from 53.3 in 2011 to 36.1 in 2012.

• The Office of the U.S. Trade Representative fell 11.3 points from 47.0 in 2011 to 35.7 in 2012.

• The Nuclear Regulatory Agenc fell 4.4 points from 72.0 in 2011 to 67.6 in 2012.

David Dye, director of the federal human capital practice at Deloitte Consulting LLP, which helped create the report, said that while the results are not surprising in an atmosphere of budget cuts, the falling numbers serve as a message that managers need to take swift action.

“If we don’t take care of it now, things may only get worse,” Dye said.

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