Revenue woes lead GSA to freeze hiring

A decline in business revenues, particularly in the IT Solutions program, has led the General Services Administration to impose a hiring freeze agencywide and consider offering early retirement packages for certain positions within two divisions, according to administrator David Bibb.

In a Feb. 24 memo, Bibb said that combined with GSA's ongoing reorganization, the revenue decline has created 'an unsustainable situation' for the agency.

'Besides the reorganization, we are also dealing with business realities,' Bibb wrote. 'Specifically, our revenue has declined substantially in programs like IT Solutions, where cost has exceeded revenue''.

IT Solutions is an online shop for federal agencies to order and accept services and commodities from vendors.

As of August 2005, IT Solutions revenue at the regional level came in at $3.4 billion'$1.145 billion under GSA's planned expectations, according to agency financial results obtained by Government Computer News.

G. Martin Wagner, acting Federal Acquisition Service commissioner, said revenue at IT Solutions has dropped steadily since it reached its peak in at the end of fiscal 2004 of $7.2 billion. Revenue is projected to reach a low of $4.3 billion by the end of fiscal 2006, GSA said.

Wagner said he does not anticipate the need for any layoffs, and said the agency is taking these measures 'to avoid getting into layoffs.

The memo came just days after Bibb on Feb. 21 approved the organizational design for the new Federal Acquisition Service, created through the merger of GSA's Federal Technology and Federal Supply services.

In his memo, Bibb noted that acting FAS commissioner Marty Wagner had implemented a hiring freeze within FTS and FSS. Bibb said he imposed a hiring freeze for this fiscal year for general management and administration staff at GSA's Washington headquarters and throughout its regional offices.

Bibb also said the agency is considering exercising its buyout authority for certain FTS and FSS positions to encourage early retirements. If buyouts are offered, Bibb said GSA plans to provide transition assistance, including informing those employees of other jobs and training them for different positions.

'Resolving these two initiatives'the effort to bring costs in line with revenues and the longer term development of FAS'will contribute to a customer-focused, more efficient GSA,' Bibb wrote.

GSA has briefed its union and will meet with Congress this week, Bibb said in the memo.

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