Federal Daily - March 8, 2010

Postal Regulatory Commission Orders Audit of CSRS Liability

The Postal Regulatory Commission last week issued a notice establishing a docket to conduct a review of the U.S. Postal Service’s Civil Service Retirement System pension liability.

The Postal Accountability and Enhancement Act requires the commission to enlist an actuary to evaluate pension obligations at the request of the Postal Service. USPS filed its request for the assessment on Feb. 23. The report, when completed, will be sent to USPS, the Office of Personnel Management and Congress.

The Postal Service’s new 10-year plan to control costs and restructure the USPS business model—outlined by Postmaster General John Potter last week—includes measures aimed at reining in expenses related to pre-funding of retiree health benefits, and at addressing overpayments to the USPS Civil Service Retirement System pension fund.

“This is an important study which will provide information regarding the financial health and viability of the Postal Service, and it will assist the commission as it analyzes the mounting financial losses the Postal Service is projecting,” said PRC Chairman Ruth Y. Goldway.

To see more, go to: www.prc.gov/prc-pages/default.aspx.

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Many Factors Play into State Department’s Security Force Decisions

While much of the debate over the government’s use of private security contractors in Iraq has focused on the quality of those forces, the other question is: Are those forces more cost-effective than federal employees? According to a study released March 4 by Government Accountability Office, the answer is …it depends.

In its analysis, GAO compared likely State Department costs versus contractor costs for four task orders and one contract awarded by the department for security services in Iraq. According to GAO, for three of the task orders and the contract, the cost of using State Department employees would be greater than using contractors. For the remaining task order, the estimated cost to use federal employees was less.

In one case, using State Department employees to provide onsite security for its embassy in Baghdad would have cost about $858 million for one year, compared to about $78 million charged by the contractor, GAO said. On the other hand, GAO’s cost comparison of the task order for providing personal security for the department’s employees in and around the Baghdad region—which required security staff to have security clearances—indicated the department’s estimated cost would have been about $240 million per year, compared to approximately $380 million charged by the contractor.

But that comparison is complicated by the fact that the State Department currently does not have enough trained personnel to provide security in Iraq—meaning it would have to recruit and train more personnel at an additional cost of $162 million, the study said.

GAO said that the department’s contract requirements, especially security clearance requirements, are a big determinant in whether contractors or government personnel are less expensive. Other factors—such as time constraints and overhead costs—also play a role in the decisions. For example, it can take longer to recruit, hire and train new feds than to acquire contractors. It also can cost more in administrative costs to cut those federal personnel if they are no longer needed. And there can be other overhead costs, such as housing expenditures, when feds are added to staff. Conversely, there also are administrative costs associated with awarding contracts and providing oversight, GAO said.

To see more, go to: www.gao.gov/new.items/d10266r.pdf.

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Bill Would Offer Tax Credit to Bolster Job Opportunities for Military Spouses

A coalition of lawmakers introduced a bipartisan bill on March 4 that would—if signed into law—provide employers with a new tax incentive to hire the spouses of military servicemembers.

The Military Spouses Employment Act, sponsored by John Carter, R-Texas, would expand the Workforce Opportunity Tax Credit to include military spouses. The change would allow employers to claim an income tax credit of 40 percent for the first $6,000 in wages for qualified spouses who remain on the payroll at least 400 hours. For spouses who remain employed from 120 hours to 399 hours, employers would be eligible for a tax credit of 25 percent.

Qualified spouses include all spouses of active-duty military, as well as spouses of National Guard and Reserve members who are activated for 90 days or more.

“This legislation will help alleviate some of the longstanding obstacles to quality jobs for military spouses,” said Carter, who represents the Fort Hood, Texas, area. “Far too often, employers overlook military spouses in the hiring process due to concerns over family transfers.”

The bill, cosponsored by a group of 12 Republican and five Democratic House members, was introduced in the wake of news last month that DoD temporarily suspended a popular employment assistance program for military spouses, the My Spouse Career Advancement Account program, pending review.

To see more, go to: http://tinyurl.com/yj89hfo.

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