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American Federation of Government Employees

As Delivered by Deputy Secretary of Defense William J. Lynn, III, Washington, DC, Saturday, February 20, 2010

Thank you John and Don.
Being at DOD is actually not my first experience dealing with labor unions.
I worked for six years for Senator Edward Kennedy.  As you know, he was one of labor’s staunchest advocates.  He was the last lion from a family committed to labor issues for more than half a century.
For the six years I worked there I got to watch him work with groups from across the professional and political spectrum—labor and management, Republican and Democrat, working class and white collar.  He always managed to find the middle ground on so many issues.
They way he talked about it is “old values will never wear out.” 
“Programs may sometimes become obsolete,” he said, “but the ideal of fairness always endures.”
Well it’s been more than 15 years since I worked for Senator Kennedy.  And of course he is no longer with us.  But I remember his wisdom every time I confront a difficult issue.  And I am particularly mindful of his wisdom today with the Department facing so many challenges.
More than 700,000 civilian employees work every day for the Department of Defense.  We have a remarkable workforce that confronts challenges that can only be described as extraordinary in every way.  We also bear, along with those in uniform, a sacred responsibility to protect and defend our fellow citizens.
Keeping our nation safe is no easy task.  
We live in a world where terrorists and rogue states have access to advanced capabilities, where make-shift bombs used by insurgents can penetrate even the most advanced armor, and where small investments in specific technologies can inhibit our ability to operate in the global commons—on the seas, in the air, in space, and in cyberspace.
As our Quadrennial Defense Review—which we just completed—makes clear, new and old enemies are challenging us with asymmetrical tactics.  Conflicts are lasting longer, placing new stress on our armed forces.  Even our computers, as Google recently discovered, are no longer safe from attack. 
If we are to keep America safe, the Defense Department must overcome these challenges.  We must devise new ways of defending ourselves and our interests.  Confronting adversaries who are agile, persistent, and deadly requires strong institutions.  And as those of us in this room know, our institutions are no stronger than the people who work in them.
The American Federation of Government Employees is a long-standing and valued partner with the Department of Defense.   You are our largest union—representing more than 265,000 DOD employees.  On critical personnel and workplace matters, you give voice to federal workers in our Department and across the government.
It is the responsibility of all of us to ensure that our civilian workforce is up to the task of protecting the American people.
To succeed in carrying out the complex tasks of the Department, we must enable all of our employees to excel in their jobs.  We must compensate them commensurate with their responsibilities.  And we must provide them with a quality of work life that fosters dedication over the long term.  To meet the security challenges we face, we need every single member of our civilian workforce to step-up.  The task before us is enormous. 
To design and implement a work environment that enables all these things, we need to work with employee representatives in a thoughtful and deliberate manner. 
Your National President, John Gage, has made clear that AFGE is willing and eager to help us move forward. 
On behalf of the Department of Defense, I accept that offer to work together to achieve our mission.   (Applause.)
I am here today to reinforce our commitment to a partnership with labor—a commitment made by the leadership of the Department, by the Administration as a whole, and by President Obama himself.
We are committed to involving labor because we believe three things: 
•         We believe that DOD’s civilian employees provide critical support to the ongoing war effort and to the larger mission of the Department.
•         We believe that collective bargaining rights are critical to ensuring a healthy and engaged civilian workforce.   (Applause.)
•         And we believe that working with labor’s representatives in a collaborative manner will improve the operations of the Department of Defense. 
These three core beliefs underpin the Department’s approach to labor-management relations.  Abiding by them will bring unions into the debate on how DOD can better perform its mission. 
We are committed to working with you to achieve a working partnership.  Where changes will affect bargaining unit members, we recognize that your leadership is crucial.  Working with AFGE and other unions is the best way to ensure that we develop policies that are trusted and accepted across the workforce.  (Applause.)
The Department has already taken important steps to improve labor-management relations. 
To understand your concerns and to begin a new dialogue on personnel issues, I have met personally with representatives of national labor unions, including John and Don.  Marilee Fitzgerald—who is here in the back—Acting Deputy Under Secretary of Defense for Civilian Personnel Policy, has continued that dialogue in a regular series of meetings with union representatives.  And it is now Administration policy for every department in the government to institutionalize the conversation we have begun.  
In December, President Obama signed Executive Order 13522, which creates Labor-Management Forums to improve the delivery of government services.  We are at present discussing with AFGE and other unions how best to implement that Executive Order. 
The forums mandated by this order will further strengthen our ability to discuss broad-based personnel issues in a non-adversarial manner.  They will help ensure that the concerns of employees at all levels reach our department’s leadership. 
We value and respect all members of the DOD workforce.  We recognize that our employees, and their representatives, are an essential source of ideas on improving how we do business. 
Labor-management forums will also help us ensure transparency in our decision-making process on personnel issues.  Keeping employees informed and unions involved adds value to our decisions.  By treating each other as partners, with respect for our roles and responsibilities, we can build the trust necessary for new policies to succeed.
As we work to improve labor-management relations, we are also evaluating the structure of our workforce as a whole, both civil servants and private contractors.
As part of this review of our “total workforce,” we are assessing whether the work that is currently contracted out should be brought “in-house.”  (Applause.)
Several factors drive our consideration of what mix of contractors and government personnel to employ. 
Cost-effectiveness is one of the most important criteria.  But so too is the extent to which contracting introduces operational risk and supports functions that should be performed only by employees with direct responsibility for the public interest.
The trend towards contract support over the past two decades has yielded many gains.  But we believe it has gone too far in some areas.   (Applause.)
So during fiscal 2010 and fiscal 2011, we expect to establish 20,000 new civilian positions.   (Applause.)
In-sourcing is occurring predominantly in the areas of acquisition oversight, logistics support, program management, and cost accounting.
In-sourcing supports the President’s direction to perform critical functions in-house and it complements contracting reforms passed recently by the Congress. 
A stronger and more skilled government workforce will enable our operations to function with greater efficiency and effectiveness. 
Contractors will remain an integral part of our Total Force and will continue to provide vital expertise and services.  But they will do so under more effective oversight by government officials and they will do so in areas where their services enhance rather than supplant activities crucial to the Department’s readiness and management.
In addition to rebalancing the role of government personnel and private contractors in our workforce, we are taking three broad steps to reform personnel practices in the Department.
First, NSPS is over.   (Applause.)
In response to Congress direction, I have directed our Department to begin moving employees out of NSPS.  And we will make this transition as quickly as possible.
I have appointed Mr. John James as the Director of the NSPS Transition Office.  John is an experienced career senior executive, well-suited to overseeing a rapid transition.  He is charged with devising the strategy to transition employees from NSPS quickly and effectively.  His program management experience will be invaluable as the Department makes this move.
Although we have turned the page on NSPS, we must bear its lessons in mind.  We learned the hard way with NSPS that change will fail if it is not seen as fair.  So as we seek to move forward, we must do two things.  We must ensure new personnel policies are fair on their own terms.  And we must develop them with input from those who they affect the most. 
So we meet at a moment of great possibility for labor union involvement.
We face the question of what comes next.  What human resources innovations will better meet the needs of federal workers.  Our department and the American people expect us to work together to fashion a new system.
We will be charting that course over the next several years.  And we will be charting it as partners. 
The second step in personnel reform is for us to use our existing authorities more fully and more creatively and to make use of new authorities Congress has granted to us.
I believe we can do a better job recognizing and rewarding those who make contributions to the Department’s mission. 
We are looking at ways we can use the tools are resident in the General Schedule to reward workforce performance.  For example, we can make greater use of quality step increases and performance awards to recognize great performance.
Congress also has recognized that the Defense Department faces unique personnel challenges.  In the FY2010 National Defense Authorization Action—the NDAA—Congress provided us with new tools to achieve our missions. 
Specifically, the Department is examining how to establish an enterprise-wide performance management system.  The idea is to provide a better way of setting requirements and measuring employee contributions.
Such a system would enable employees to understand their job requirements better and how their work supports the Department’s mission.  It would establish clear performance expectations and a shared understanding of them between employees and their supervisors.  And it would ensure employees and supervisors regularly assess performance against those expectations.
Along with greater expectations comes the possibility of greater rewards.  The NDAA authorized the creation of a DOD Workforce Incentive Fund.  This fund would provide incentive payments for employees based on individual or team performance.  The fund can also be used to attract or retain employees with particular or superior qualifications.  And it performs both of these functions while still operating under the General Schedule framework. 
To further enhance our management efforts, the NDAA also allows the Department to develop a streamlined hiring system.  I believe we share common interests in expediting the hiring of employees across the Department.  Filling open positions quickly is especially critical as we grow our workforce to meet new needs.  Employee representatives will play a key role as we move forward with implementing this new hiring authority.
So we look forward to hearing your ideas on how to design and implement these new authorities and to make fuller use of existing ones.  I am confident that AFGE and other employee representatives will help the Department find new ways to hire, and to encourage and reward outstanding performance.
The third step in improving our personnel system is to ensure that DOD is a part of a government-wide reform effort.
Although our civil service system is constantly adapting to new challenges, it has not been overhauled for nearly five decades.  Under the leadership of John Berry, the Office of Personnel Management is working with unions, academics, and members of Congress to evaluate how the civil service system recruits, pays, evaluates, and trains federal workers. 
OPM is examining different models for how the civil system measures merit and helps employees develop their skills to the fullest.  It is also focused on streamlining the hiring process.  
Working with OPM, DOD will play a central role in any effort toward civil service reform.  With nearly half of the population of federal workers, we have a lot at stake and much to gain from a properly focused reform effort.
Through the efforts of OPM and the President’s personal engagement, the Administration is pioneering a new era of labor-management relations. 
Our Department has already taken important steps to strengthen our workforce.  We are quickly transitioning out of NSPS.  We are undertaking a sweeping review of the use of contractors in the workforce.  And by using new and existing authorities, we are devising better ways to hire, evaluate, and reward civilian employees.  And finally, we will be a part of any government-wide civil service reform.
As we work together to improve the civilian workforce at the Department of Defense, we must do so with the wisdom of Senator Kennedy in mind. 
Senator Kennedy knew that change is never easy.  But he also believed that by working together, even groups with diverging interests can reach common agreement. 
In the last public address Senator Kennedy gave before his death, he reminded us once again of the important role we each play in building a better tomorrow.
He said, “We know the future will outlast all of us.  But I believe that all of us will live on in the future we make.”
I am here today to work with AFGE. 
Together, we will make our future safe, secure, and rewarding for our employees.
Thank you, and I’m happy to take any questions.  (Applause.) 

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