GSA’s Wagner says agency’s revenue drop prompts a hiring freeze

Marty Wagner, acting administrator of the General Services Administration’s Federal Acquisition Service, said today that the Federal Technology Service suffered a “substantial drop in volume” between 2004 and 2005, prompting some drastic changes, including a hiring freeze.

The two roots of GSA’s financial problems are an “inappropriate rapid growth” and a shift in agencies’ buying practices, Wagner said.

“Those trends are such that the cost to deliver on the services are out of kilter with the revenue, and GSA needs to cover its costs,” Wagner said.

A failure to follow GSA contracting procedures caused the inappropriate rapid growth, he said. To fix that, GSA embarked on the Get It Right program.

But when Get It Right clamped down on abuses, revenue dwindled. “When we pulled back, tightened up procedures, that led to certainly a reduction in rate of growth and an actual decline,” Wagner said.

Agencies are also shifting how they buy commodities, favoring an enterprise-level approach in contracting vehicles because they believe it better suits their needs, Wagner said.

He briefed Capitol Hill lawmakers today about the situation, which includes hiring freezes and potential workforce cuts.

GSA has requested the authority from the Office of Personnel Management and the Office of Management and Budget to offer early-outs and buyouts to some employees, he said.

Wagner would not comment on the specific number of employees that could be affected. Jack Hanley, president of the National Federation of Federal Employees’ Council of GSA Locals, said he learned in a Feb. 22 GSA briefing that the move could impact about 400 employees.

GSA Acting Administrator David Bibb outlined GSA's difficulties in a Feb. 24 memo, adding that the agency plans to help employees with training and other opportunities at GSA and in the government.

Wagner said GSA would offer early-outs and buyouts to employees working in areas in which business has dropped, and he expects approval from OPM and OMB in a few weeks.

Bibb approved the merger of FTS and the Federal Supply Service, which created the Federal Acquisition Service Feb. 21. But the reorganization did not affect the plan for the early-outs and buyouts.