Defense Department to Call Back Most Furloughed Civilians

Photographer: Rich Clement/Bloomberg

The Pentagon this week put about 400,000 employees on leave, idling about half of its worldwide civilian workforce. Close

The Pentagon this week put about 400,000 employees on leave, idling about half of its... Read More

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Photographer: Rich Clement/Bloomberg

The Pentagon this week put about 400,000 employees on leave, idling about half of its worldwide civilian workforce.

The U.S. Defense Department plans to call back most of the civilian employees it furloughed last week under the federal government shutdown, a move that averted some layoffs planned by defense contractors.

Defense Secretary Chuck Hagel said in a statement yesterday that legislation signed by President Barack Obama, which ensured that service members were paid on time during the shutdown, permitted the military to call back employees responsible for the “morale, well-being, capabilities and readiness of service members.”

“I expect us to be able to significantly reduce -- but not eliminate -- civilian furloughs under this process,” Hagel said in the statement. “Employees can expect to hear more information from their managers starting this weekend.”

The Pentagon’s decision may reduce the pressure of the closing on military contractors. A unit of United Technologies Corp., whose work includes making Black Hawk helicopters, canceled furloughs for 2,000 employees after the Pentagon announcement.

Lockheed Martin Corp. (LMT), the world’s largest defense contractor, said on Oct. 4 that it had identified about 3,000 of its employees for furloughs starting tomorrow. It is still too early to tell if those plans will change, said Gordon Johndroe, a spokesman for the company.

“We’ll continue to be in close contact with the Pentagon and are hopeful that our programs and contracts can move forward,” Johndroe said in an e-mail.

Lost Wages

The Pentagon’s action came as the House passed a law that would eventually repay furloughed civilian workers their lost wages, a step that would mitigate some of the economic impact of the shutdown. House Majority Leader Eric Cantor, a Virginia Republican, called the wage bill part of an effort to “ease the pain” of the closing as lawmakers made no political headway on a path to end it.

The Pentagon last week put about 350,000 employees on leave, about half of its worldwide civilian workforce, Undersecretary of Defense Robert Hale told reporters on a conference call yesterday. He said he now expects 90 percent or more of those workers to be called back to work.

“No more than a few tens of thousands will remain on furlough, and it may be substantially less than that,” Hale said.

Employee Notification

Hale said employees would be notified in the coming days, and that he had no concrete estimate for how many would remain off the job. Among those who won’t return, he said, are those not directly related to service operations, including some in information technology, auditing, public affairs and those on the defense payroll engaged in work not directly related to the department.

The step will bring back workers amid the standoff in Congress over Obama’s Affordable Care Act that left the U.S. without a budget when the fiscal year began on Oct. 1. The partial government shutdown is the first since 1996.

Republican lawmakers had said the Pentagon furloughed far more workers than required under the shutdown.

Responding to yesterday’s announcement, Representative Howard P. “Buck” McKeon, the California Republican who heads the House Armed Services Committee, said in a statement, “Though I do not believe the law required these hundreds of thousands of workers to be furloughed in the first place, it is welcome news.”

Among those the Pentagon considers within its power to employ during the shutdown are those engaged in contracts and their oversight, including inspectors that monitor their work, according to a memo released yesterday. It also includes the vast majority of the department’s other employees, including those who work in health care, commissaries and in intelligence operations, according to the memo.

Lockheed Furloughs

The recall of Pentagon inspectors who oversee defense contractors may avoid furloughs at defense companies. Bethesda, Maryland-based Lockheed said that it was planning furloughs in part because some of its workers perform tasks in government facilities that are now closed or require inspectors to monitor their work.

“We will be bringing those inspectors back,” Hale said yesterday.

The Aerospace Industries Association said in a statement last week that companies had voiced concern that if the shutdown continues they would be forced to furlough tens of thousands of workers.

“We haven’t solved all the problems,” Hale said. “We still hope Congress will act very quickly to end this shutdown.”

To contact the reporters on this story: William Selway in Washington at wselway@bloomberg.net; Gopal Ratnam in Washington at gratnam1@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net; John Walcott at jwalcott9@bloomberg.net

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