Pay for Performance Expanded in New, 2-Year Deal

The FAA and NATCA have signed a two-year contract extension that  expands pay-for-performance to air traffic controllers and provides potential savings of several million dollars.

The extension modifies or eliminates 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.

“This extension helps the agency and the union concentrate on what we  do best: moving airplanes safely,” said FAA Administrator Marion C. Blakey. “The FAA is becoming a more performance-based organization, and this extension is a significant component of that effort. 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 over 15,000 air traffic 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.

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.

“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 (right) 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.”

The agency and union also amended a number of memoranda of  understanding in order 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 current contract was ratified in 1998. The FAA expects to begin negotiations on a new agreement with NATCA in early 2005.

NATCA Statement

NATCA agreed to a performance-based pay system which ties part of controllers’ pay to reductions in runway incursions and operational errors. The new agreement will save the FAA up to $100 million in pay rules changes over the life of the contract.

In addition, NATCA agreed to rewrite all of the side agreements, called memorandums of understanding, which the FAA brought forward and sought to renegotiate as a result of a report by the Department of Transportation Inspector General. One of those MOUs to be rewritten involves the National Airspace Redesign project. NATCA agreed to rework that MOU to improve the systemic designing capacity, which will lead to increased efficiency of flights over some of the most congested air corridors in the country.

“This agreement is the culmination of hard work on the part of both sides working in a spirit of collaboration,” NATCA President John Carr said. “We are particularly pleased to see the gains in safety and efficiency that will be achieved with this deal. It’s a win-win situation for the flying public.”

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. The FAA believes we have plenty of controllers,” Carr remarked. “But we agreed to put this issue to the side for the good of the system so that everyone can enjoy the cost savings, safety and efficiency enhancements which this new agreement brings.”

FMI: www.faa.gov, www.natca.org