Washington Report: NATCA and FAA Sign Contract Extension

 - January 31, 2007, 8:48 AM

Following an acrimonious battle between the FAA and the National Air Traffic Controllers Association over the recently passed FAA reauthorization bill and a provision to privatize some control towers, the agency and the union signed a two-year contract extension last month that expands pay for performance to air traffic controllers and provides potential savings of several million dollars.

It marks the FAA’s first halting steps to become a performance-based organization (PBO) by modifying or eliminating a number of costly pay rules and other agreements that had been in place over the past five years. Under the extension, a portion of the controllers’ annual salary increases will be based on meeting agency performance targets. Depending on actual hiring needs, the extension could allow the agency to avoid costs of as much as $40 million over the next four years.

“The FAA is becoming a more performance-based organization, and the extension is a significant component of that effort,” said FAA Administrator Marion Blakey. “This agreement helps us focus on the needs of the traveling public and the taxpayer.”
The contract extension increases the number of agency employees whose pay is tied partly to performance from 37 percent to 75 percent. The pay-for-performance compensation system for more than 15,000 controllers is based on safety and capacity targets set forth in the FAA’s strategic Flight Plan. These targets include reducing operational errors and runway incursions and increasing on-time performance and arrival efficiency rates. The funding for the system will come from money that would traditionally go to longevity raises under the federal government’s general schedule system. There are no new base-pay increases in the extension beyond government-wide increases, which ranged from 4 to 4.9 percent last year.

The amount of money involved in performance-based pay is relatively small. Making progress in each of four performance categories will increase controller pay by 0.2 percent, for a total of 0.8 percent. If those goals are not met, the bonus is withheld.
The typical controller earns $100,000 in base pay, and receives locality pay based on local wages and costs of living. The FAA said that in future contracts it will be seeking to increase the amount of money that is subject to pay for performance.

The FAA and the union also agreed under the extension that a provision binding the FAA to maintain a fixed number of controllers each year expired at the end of September. As a result, the FAA now will be able to adjust staffing levels based on actual workload.

NATCA said that despite lengthy discussions, the two sides were not able to reach a staffing agreement. “Too few controllers are operating the system right now and we are far from seeing a bubble of hiring needed to prepare for the coming wave of controller retirements,” said NATCA president John Carr. “The FAA believes we have plenty of controllers.”

The agency and union also amended a number of memoranda of understanding (MOU), or side agreements, to reaffirm management’s decision-making authority in areas that are not subject to collective bargaining. In June, the FAA established a strict process for negotiating, approving, recording and implementing MOUs, which are now subject to financial and labor-relations review, analyzed for affordability related to anticipated funding levels and recorded in a central database.

“The contract extension responds to direction from Congress and the Department of Transportation inspector general to exert greater cost control over air traffic control operations,” Blakey said. “We modified or eliminated a number of controller pay rules that had unintended costly consequences, such as allowing controllers who fail training at a more complex facility to keep much of the pay raise they received on returning to a less complex facility.”

Blakey and Carr were at loggerheads for much of the late summer and early fall over a plan to privatize 69 low-level control towers, which the union characterized as the Bush Administration’s first steps to privatizing the entire ATC system.

House and Senate versions of the reauthorization bill originally contained provisions against privatizing ATC (other than the 69 towers) for the life of the bill (the end of fiscal year 2007). But a House/Senate conference committee removed those provisions because the White House threatened a veto. After Blakey promised that the FAA would not outsource any jobs now performed by FAA employees until Sept. 30, 2004, the amended bill was finally passed.

The current contract was ratified in 1998. The FAA expects to begin negotiation on a new agreement with NATCA in early 2005.