U.S. Customs Service: Varied Reaction to the Labor-Management Partnership
Concept (Testimony, 03/11/97, GAO/T-GGD-97-54).

GAO discussed labor-management activities within the U.S. Customs
Service, focusing on: (1) the new relationship between Customs and the
National Treasury Employees Union (NTEU); (2) Customs' management,
supervisors, and NTEU views concerning the relationship; and (3) GAO's
observations on evaluating this relationship.

GAO noted that: (1) Executive Order 12871 required the head of each
federal agency to create labor-management councils to help involve
employees and their unions as full partners; (2) these partnership
councils are to identify problems and craft solutions to better serve
the agency's customers and accomplish its mission; (3) in June 1994,
Customs and NTEU entered into a partnership agreement that established
19 goals, set up a National Partnership Council, and stated that NTEU
will participate in agency operational meetings and groups to ensure
NTEU involvement in decisions that affect the workforce; (4) in February
1997, Customs and NTEU implemented a new national contract; (5) GAO's
limited work to date at Customs headquarters and selected field
locations revealed a variety of opinions regarding Customs-NTEU
relations since implementation of the executive order; (6) most of the
Customs managers GAO interviewed characterized their relationship with
NTEU chapters as better, and most of the NTEU chapter presidents GAO
spoke with also said the relationship was better; (7) the views of the
Customs first-line supervisors GAO interviewed were more evenly
distributed among the range of responses from "much better" to "much
worse"; (8) Customs managers and supervisors and NTEU representatives
provided similar comments identifying advantages of the partnership
concept, including: (a) faster problem resolution; (b) improved
communications; and (c) mutual involvement in decisions; (9) comments on
disadvantages revealed no clearly shared views; (10) to a limited
extent, Customs has begun to evaluate the results of the new
relationship; (11) however, these efforts have not set the groundwork
for the kind of comprehensive evaluation envisioned by the executive
order and partnership agreement; (12) although the Commissioner expects
it to take at least 5 years for the new relationship to become Customs'
normal operating environment, it is not too soon to develop a formal
plan for an evaluation and to share this plan with the Subcommittee; and
(13) this plan should address several critical questions, such as the
performance measures to be used and how often an evaluation should be
conducted.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-97-54
     TITLE:  U.S. Customs Service: Varied Reaction to the 
             Labor-Management Partnership Concept
      DATE:  03/11/97
   SUBJECT:  Customs administration
             Labor-management relations
             Government employee unions
             Labor contracts
             Labor negotiations
             Personnel management

             
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Cover
================================================================ COVER


Before the Subcommittee on Trade
Committee on Ways and Means
House of Representatives

For Release on Delivery
Expected at
10:00 a.m.  EST
Tuesday
March 11, 1997

U.S.  CUSTOMS SERVICE - VARIED
REACTION TO THE LABOR-MANAGEMENT
PARTNERSHIP CONCEPT

Statement of Norman J.  Rabkin
Director, Administration of Justice Issues
General Government Division

GAO/T-GGD-97-54

GAO/GGD-97-054T


(264435)


Abbreviations
=============================================================== ABBREV

  CMC - Customs Management Center
  NTEU - National Treasury Employees Union

U.S.  CUSTOMS SERVICE:  VARIED
REACTION TO THE LABOR-MANAGEMENT
PARTNERSHIP CONCEPT
====================================================== Chapter Summary

Executive Order 12871, October 1, 1993, required the head of each
federal agency to create labor-management councils to help involve
employees and their unions as full partners.  These partnership
councils are to identify problems and craft solutions to better serve
the agency's customers and accomplish its mission.  In June 1994, the
U.S.  Customs Service and the National Treasury Employees Union
(NTEU) entered into a partnership agreement that established 19
goals, set up a National Partnership Council, and stated that NTEU
will participate in agency operational meetings and groups to ensure
NTEU involvement in decisions that affect the workforce.  In February
1997, Customs and NTEU implemented a new national contract. 

GAO's limited work to date at Customs headquarters and selected field
locations revealed a variety of opinions regarding Customs-NTEU
relations since implementation of the executive order.  Most of the
Customs managers GAO interviewed characterized their relationship
with NTEU chapters as better.  Most of the NTEU chapter presidents
GAO spoke with also said the relationship was better.  The views of
the Customs first-line supervisors GAO interviewed were more evenly
distributed among the range of responses from "much better" to "much
worse." Customs managers and supervisors and NTEU representatives
provided similar comments identifying advantages of the partnership
concept, including (1) faster problem resolution, (2) improved
communications, and (3) mutual involvement in decisions.  Comments on
disadvantages revealed no clearly shared views. 

To a limited extent, Customs has begun to evaluate the results of the
new relationship.  However, these efforts have not set the groundwork
for the kind of comprehensive evaluation envisioned by the executive
order and partnership agreement.  Although the Commissioner expects
it to take at least 5 years for the new relationship to become
Customs' normal operating environment, it is not too soon to develop
a formal plan for an evaluation and to share this plan with the
Subcommittee.  This plan should address several critical questions,
such as the performance measures to be used and how often an
evaluation should be conducted. 


U.S.  CUSTOMS SERVICE:  VARIED
REACTION TO THE LABOR-MANAGEMENT
PARTNERSHIP CONCEPT
==================================================== Chapter Statement

Mr.  Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss labor-management activities
within the U.S.  Customs Service.  The Subcommittee asked us to
review, among other topics, the history of union activity at Customs
and the effect that the partnership agreement between Customs and the
National Treasury Employees Union (NTEU)--the exclusive
representative of Customs' bargaining unit employees-- had on
Customs' ability to establish and achieve its mission- related goals. 
To date, we have performed preliminary work at Customs headquarters,
5 Customs Management Centers (CMC), 11 ports of entry around the
country, the NTEU national office, and 7 local NTEU chapters (see the
appendix for a list of the CMCs, NTEU chapters, and ports we
visited).  My testimony will cover information we have obtained on
the new relationship between Customs and NTEU; Customs' management,
supervisors, and NTEU views concerning the relationship; and our
observations on evaluating this relationship. 

We judgmentally selected the ports for our review focusing on the
southern border and those ports where Customs headquarters officials
told us that labor-management relations were strong and effective and
where there were less effective relationships.  At these locations,
we interviewed Customs managers and first-line supervisors as well as
NTEU chapter presidents and representatives.  We asked a series of
questions designed to gauge the extent of respondents' satisfaction
with and identify their views on the advantages and disadvantages of
the new relationship.  The information provided represents the views
and opinions of only the Customs officials and NTEU representatives
we interviewed; it is not statistically projectable to the entire
Customs Service. 


   BACKGROUND
-------------------------------------------------- Chapter Statement:1

The Customs Service is responsible for ensuring that all goods and
persons entering and exiting the United States do so in accordance
with all U.S.  laws and regulations.  As of January 1997, Customs'
workforce included about 19,500 personnel, approximately 11,200 of
whom were eligible to join NTEU.  Approximately 7,200 (65 percent) of
those eligible to join NTEU had done so. 

In September 1994, Customs' report, People, Processes and
Partnerships, provided a blueprint of its plans to transform itself
into an agency prepared to meet the demands of the 21st Century.  The
report proposed in general terms the agency's vision and a three-part
process to achieve this vision:  (1) organizational change, (2)
reengineered business processes, and (3) cultural conversion. 

Customs has made progress in implementing its reorganization plan. 
Two years ago we reported\1 that Customs had started to downsize its
headquarters and was planning to close its 7 regional offices and 42
district offices, replacing them with 20 CMCs.  Many functions
formerly performed by the regions and districts, such as hiring and
assessing fines and penalties on companies violating trade laws, were
to be transferred to the ports.  CMC and port directors we spoke with
told us that the transition of responsibility to the ports was
proceeding as planned.  Customs was also proceeding with the redesign
and development of performance standards for its core business
processes. 

One element of Customs' process to achieve its vision is its plan to
change its culture, including its relationship with NTEU.  According
to its September 1994 report, Customs has historically been
characterized by divisive internal competition, highly visible turf
battles with other agencies, a controlling management style, and an
adversarial relationship with its employee union.  To help change
this relationship, Customs and NTEU created a labor-management
partnership. 


--------------------
\1 Customs Management:  Status of Reorganization and Modernization
Efforts (GAO/T-GGD/AIMD-95-70, Jan.  30, 1995). 


   THE NEW LABOR-MANAGEMENT
   PARTNERSHIP:  HOW IT CAME ABOUT
   AND WHAT IT IS
-------------------------------------------------- Chapter Statement:2

On October 1, 1993, the President issued Executive Order 12871, which
called for creating cooperative labor-management relations throughout
the federal government and setting up a national council to promote
partnership.  The Order required the head of each agency to create
labor-management councils at appropriate levels to help involve
employees and their union representatives as full partners with
management representatives to identify problems and craft solutions
to better serve the agency's customers and accomplish its mission. 
The Order further required agencies to bargain with unions on issues
formerly bargained on only at the agency's discretion.  These issues
include "numbers, types and grades of employees or positions assigned
to any organizational subdivision, work project, or tour of duty, or
on the technology, methods, and means of performing work." It also
called for agencies to evaluate the progress and improvements in
organizational performance resulting from the labor-management
partnerships. 

In June 1994, Customs and NTEU entered into a partnership agreement
that established 19 specific goals.  These include involving
employees (through NTEU) before final decisions are made and managing
conflict to settle or resolve disputes faster.  The agreement
established a National Partnership Council at Customs Headquarters as
well as local partnership councils at CMCs and ports.  The
partnership agreement states that NTEU will participate in agency
operational meetings and groups to ensure NTEU involvement in
decisions that affect the workforce.  NTEU may also appoint
representatives to all task forces and groups formed by Customs for
the purpose of improving or changing work processes and procedures. 

In February 1997, Customs and NTEU implemented a new National
Agreement.\2 Key provisions in the new agreement include (1)
alternative dispute resolution procedures that attempt to resolve
conflicts informally at the lowest level possible to replace the old
grievance procedures; (2) involvement of NTEU as an observer in the
promotion process; and (3) nine new issues to be negotiated locally,
such as uniforms and a pilot alternative work schedule program. 


--------------------
\2 This agreement, also known as the "contract", replaced the prior
labor-management agreement dated May 19, 1991.  As distinguished from
the partnership agreement and the 19 goals, the contract sets out 44
articles governing items such as travel, attire and appearance,
adverse actions, and arbitration. 


   MANAGEMENT AND NTEU VIEWS
   REGARDING PARTNERSHIP RELATIONS
-------------------------------------------------- Chapter Statement:3

Our limited work at Customs and NTEU headquarters, 5 CMCs, 7 NTEU
chapters, and 11 ports of entry revealed a variety of opinions
regarding Customs-NTEU relations since the partnership concept had
begun.  When asked to compare NTEU-management relations at the time
of our visits with the relationships before the partnership
agreement, CMC directors we interviewed characterized the
relationship with the seven NTEU chapters as better than before
partnership with five, about the same with one, and worse with one.\3
Six of the seven NTEU chapter presidents also said that the
relationship was better than before partnership; one chapter
president said that the relationship was worse.  In addition, 7 of
the 11 port directors characterized the relationship with NTEU
chapters as better than before, 2 said it was about the same, and 2
said it was much worse. 

In addition to interviewing Customs management officials and NTEU
representatives, we asked 55 first-line Customs supervisors at the 11
ports we visited how they would characterize the relationships at the
time of our visits between management and NTEU at their ports
compared to the relationships before the partnership agreement. 
Their views were more evenly distributed among the range of responses
from much better to much worse than were those of the Customs
managers and NTEU chapter presidents.\4 One supervisor told us that
labor-management relations were 100-percent better now and that
problems were handled informally at the supervisor-subordinate level
with less confrontation.  Another supervisor stated that in his 22
years with the Customs Service, he had never seen better
management-labor relations.  On the other hand, several supervisors
described the management-NTEU relationship under the partnership
concept as "us against them." One supervisor told us that
implementation is one-sided.  Another supervisor stated that NTEU
does not compromise unless it is to its advantage. 

Our limited work also identified a variety of views from managers,
supervisors, and NTEU representatives regarding the advantages and
disadvantages of the partnership concept.  While our results cannot
be generalized to all of Customs, they can be summarized and
characterized in terms of the managers, supervisors, and NTEU
representatives we interviewed at the locations we visited. 

A few clearly shared views emerged.  Managers, supervisors, and NTEU
representatives provided similar comments identifying advantages of
the partnership concept.  They generally stated that the concept has
resulted in

  -- faster resolution of problems;

  -- a reduction in the number of grievances filed;

  -- improved communications between management and the union; and

  -- mutual involvement in decisions. 

NTEU representatives we interviewed believed that these factors had
contributed to improved operational efficiency at the Customs
Service. 

Our analysis of the comments about the disadvantages of the
partnership concept and how it was being implemented at the ports we
visited did not show any clearly shared views.  While individual
managers, supervisors, and NTEU representatives told us that some
managers did not understand the concept of partnership, the
underlying reasons differed significantly.  Managers and supervisors
generally stated that

  -- all issues must be bargained with the union before any action
     can be taken by management;\5

  -- the partnership concept requires too many meetings and too much
     of management's time;

  -- while managers remain accountable for actions and results at
     their ports, there is no union accountability; and

  -- the union will only bargain on issues that address union
     interests and not on those that address the needs of the Customs
     Service. 

NTEU officials generally raised the following concerns: 

  -- the partnership concept is not clearly understood by management;
     managers want to choose when they include NTEU in making
     decisions and when they do not;

  -- managers are not fully trained in the partnership concept; and

  -- managers do not want to involve union representatives in the
     decisionmaking process; they continue to want to make unilateral
     decisions. 


--------------------
\3 Three CMC directors work with one NTEU chapter each, and two CMCs
work with two NTEU chapters each. 

\4 Fifteen percent said it was much better, 29 percent said it was
better, 33 percent said it was about the same, 11 percent said it was
worse, 9 percent said it was much worse, and 4 percent had no basis
to judge. 

\5 While this was a perception of some managers and supervisors, 5
U.S.C.  7101-35 contains specific provisions related to which issues
are and are not bargainable. 


   GAO OBSERVATIONS ON EVALUATING
   CUSTOMS' AND NTEU'S
   IMPLEMENTATION OF THE
   PARTNERSHIP CONCEPT
-------------------------------------------------- Chapter Statement:4

In our January 1995 testimony on Customs' reorganization, we
concluded that Customs' efforts to date had the potential to position
Customs to meet its future challenges.  We encouraged Customs to
continue discussing both its progress and results with this
Subcommittee.  Among the issues we encouraged Customs to explore was
identifying what indicators or measurements it should use to
determine the success or effectiveness of the new relationship. 

Customs' partnership agreement with NTEU and Executive Order 12871
call for evaluating the progress of and improvements in the agency's
performance resulting from the partnership concept.  To a limited
extent, Customs has begun that effort. 

A working group met in October 1995 to review and analyze data on
partnership activities.  The group questioned the accuracy of the
information it had gathered and recommended that on-site surveys be
conducted.  In a memorandum to the Commissioner shortly after the
working group report, the Assistant Commissioner for Human Resources
Management concluded that Customs needed an effective way to monitor
partnership performance. 

In April 1996, the Commissioner and the President of NTEU jointly
sent all Customs employees an "organizational climate survey" that
included questions about the partnership concept.  Customs has
compiled and analyzed the results of that survey, and intends to use
the data as a baseline against which to measure the results of future
surveys. 

However, neither of these efforts has set the groundwork for the kind
of comprehensive evaluation envisioned by the Executive Order and
partnership agreement.  In our work thus far at Customs' headquarters
and several field locations, we have not seen any plans for an
evaluation of the impact of the partnership approach on Customs'
mission. 

Cultural changes such as those promised by the partnership concept do
not occur quickly.  The Commissioner told us that he expects it to
take at least 5 years for partnership to become part of the normal
operating environment throughout Customs.  Nevertheless, given that
Customs and NTEU have been in this new relationship for almost 3
years, it is not too soon to develop a formal plan for the evaluation
of progress and improvements in organizational performance resulting
from this labor-management partnership.  Some of the critical
questions to be answered include: 

  -- What performance measures should be used? 

  -- What factors in addition to the partnership concept may be
     affecting organizational performance? 

  -- How often should an evaluation be conducted? 

  -- Should the focus of an evaluation be at the national or the port
     level or both? 

Developing a plan that addresses these questions will be difficult
and will present Customs with significant challenges.  It is
reasonable for Customs and NTEU not to have completed any
comprehensive evaluation at this point.  However, it is also
reasonable to expect that they would have begun developing and
sharing with this Subcommittee their plan for carrying out that
evaluation. 


------------------------------------------------ Chapter Statement:4.1

Mr.  Chairman, this completes my statement.  I would be pleased to
answer any questions. 


FIELD LOCATIONS VISITED
==================================================== Appendix Appendix

Customs Management
Centers                 NTEU chapters\a         Ports of entry\b
----------------------  ----------------------  ----------------------
South Pacific           Chapter 111             Los Angeles
(Long Beach,            (Los Angeles            International Airport\
California)             International Airport,
                        California)
                                                Los Angeles Harbor
                        Chapter 103
                        (Los Angeles Harbor,
                        California)

Southern California     Chapter 105             San Ysidro
(San Diego,             (San Diego,
California)             California)             Otay Mesa

                        Chapter 123             Calexico
                        (Calexico, California)

West Texas/New Mexico   Chapter 143             El Paso
(El Paso, Texas)        (El Paso, Texas)
                                                Presidio

Arizona                 Chapter 116             Nogales
(Tucson, Arizona)       (Nogales, Arizona)


South Florida           Chapter 137             Miami International
(Miami, Florida)        (Miami, Florida)        Airport

                                                Miami Seaport

                                                Port Everglades
----------------------------------------------------------------------
\a NTEU chapters that we visited represent bargaining unit employees
at more ports than those we visited. 

\b The Port of Los Angeles includes the Los Angeles International
Airport and the Los Angeles/Long Beach Harbor (Terminal Island). 
They are represented by two separate local NTEU Chapters--#111 and
#103, respectively.  We, therefore, treated them as two separate
ports for this review. 


*** End of document. ***