Bibb: GSA to downsize by 400 employees

The acting administrator of the General Services Administration confirmed today that the agency will offer early outs and buyouts to about 400 employees as the agency wrestles with financial problems.

David Bibb, who became acting administrator after Administrator Stephen Perry left the agency in October 2005, said GSA is taking “business steps” to curb a sharp decline in revenue from some services by freezing hiring for the Federal Technology Service and Federal Supply Service.

GSA is awaiting permission from the Office of Management and Budget and the Office of Personnel Management to offer early-out packages to 400 employees, who constitute 8 percent of GSA’s workforce, Bibb said.

“We have to not only operate like a business, but we have to cover our expenses with our income," he said. "And right now for the information technology service as a whole — and particularly, for IT Solutions — we are not covering our costs with our revenues."

Information Technology Solutions is one of FTS's assistant procurement services, in which agencies submit information about their needs to GSA. GSA evaluates the need, formulates specific requirements based on it, then buys the necessary products and services on behalf of the customer and charges the cost plus a small fee.

The fees are supposed to cover the cost of running the service so that no appropriated funds are needed, but the agency has fallen short. Revenue from the service has fallen from $7.2 billion in fiscal 2004 to a projected low of $4.3 billion for fiscal 2006, a 40 percent drop, according to GSA records.

Bibb said income has decreased because of a shift in agencies’ buying habits and a changing marketplace. Because budgets are tight, agencies are buying in bulk to get a greater discounted price. Agencies are skipping individual purchases on the GSA supply schedules, he said.

“Being a business that has to change with the times, we’ll adjust our schedules to be complimentary to that kind of process,” Bibb said.

Also, this month, the GSA and Defense Department inspectors general will issue a joint letter reporting on whether the GSA’s regional IT services programs are compliant with specific Federal Acquisition Regulations and Defense contracting regulations. If the letter is unfavorable, GSA will be blocked from handling large contracts for DOD.

Congress required the audits in a fiscal 2005 Defense authorization bill. The letter marks the end of the second phase of audits, and will be sent to the House and Senate Armed Services committees by March 15.

Bibb said he is confident the letter will show that GSA has addressed problems revealed in earlier audits.