Detailed Information on the
Federal Mediation and Conciliation Service Assessment

Establish an efficiency measure that demonstrates improved efficiency in achieving program goals.

Include information on what impacts alternative levels of funding might have on expected performance in budget requests and justifications.

Develop a means to identify stoppages that most threaten to cause a substantial interruption of interstate commerce, impair the national defense, and disrupt the provision of health care services.

Improve the accuracy of FMCS's estimate of its impact on work stoppages by capturing additional case information and referencing these data to external variables.

Collaborate with similar services internationally and at the federal and state level to develop comparable performance measures.

Enable mediators to estimate the cost of a potential work stoppage in an upcoming negotiation.

Develop a formal system for identifying and addressing management deficiencies within agreed upon time frames.

Measure: Percent of Collective Bargaining Contract Negotiation Cases Settled With Assistance of FMCS Mediation.

Explanation:XXX requires parties to collective bargaining contract negotiations to notify FMCS to of such negotiations when XXXX. Of these cases, FMCS is invited to mediate approximately X% of the time. Approximately X% of collective bargaining contract negotiations that FMCS is notified of each year do not result in settlement, or the signing of an initial or replacement collective bargaining agreement. Alternative outcomes include closure of businesses, X, and X. FMCS provides some type of mediation assistance, defined as the facilitation of at least one meeting between the negotiating parties, to approximately X% of all parties that notify FMCS that a contract is due to expire. This measure is defined as the percent of collective bargaining contract negotiation cases reported to FMCS for which both 1) FMCS has provided some type of mediation assistance; and 2) that negotiation ended in a settlement. This measure does not distinguish between cases where settlement was reached prior to a strike or work stoppage. In other words, this measure tracks the times FMCS is invited to mediate relative to the times in these cases that the negotiation reaches a positive conclusion. While, in theory measure could provide a disincentive to accept cases that might lead to a stoppages, mediators are trained to identify and mediation cases are assigned, in part, on the increased likelihood that a work stoppage is immanent. FMCS tracks the settlement rate as a percentage of "active" cases, rather than as a percentage of expiring contracts because X.

Measure: Percent "Reduction" in the Average Duration of Work Stoppages When FMCS Engaged in Mediation Prior to the Collective Bargaining Contract Expiration Date

Explanation:This measure compares the average length of work stoppage durations in cases when FMCS was engaged in the mediation of collective bargaining negotiations prior to the contract expiration date, relative to the average stoppage in cases when FMCS was not involved, or became involved after the contract expiration date. It is calculated as the difference between the average length of the stoppage durations when FMCS became involved prior to the contract expiration date, and the length of the average work stoppage when FMCS never became involved, or became involved after the contract expiration date or not at all, and is expressed as a percentage of the average duration of work stoppages that occur when FMCS never became involved, or became involved after the contract expiration date. Data on the length of stoppages that occur during the collective bargaining negotiation process, including those where FMCS never became involved, comes from X. This measure originated with a 2005 independent study by the Employment Policy Foundation, which revealed a strong and statistically significant correlation between the timing of FMCS's intervention in contract disputes and work stoppage duration. Specifically, the study demonstrated work stoppages that occurred between 1999 and 2004 in cases where FMCS mediation occurred before the contract expiration date lasted an average of 33 days (44 percent) less than stoppages in cases where the first FMCS mediation meeting occurred after the contract expiration date expiration date or not at all. Since 2005, the FMCS has tracked active mediator involvement in a collective bargaining cases prior to the contract expiration date based on the theory that early intervention helps minimize, and is a critical component of any strategy to reduce, the incidence and duration of work stoppages.

Measure: Percent of FMCS Mediated Cases In Which a Work Stoppage Occurs.

Explanation:This measure describes the number of work stoppages that occur each year in FMCS mediated cases as a percentage of all FMCS mediated cases. It divides the number of contract negotiations mediated by FMCS by the number of mediated cases with work stoppages. Not all instances of collective bargaining negotiations that are reported to FMCS are assigned for review by a Directors of Mediation Services and not all of those assigned for review become FMCS mediated cases. This number does not account for work stoppages that occur in cases where FMCS did not mediate. A lower work stoppage rate indicates that stoppages are occurring in fewer FMCS mediated cases. The implication of a low stoppage rate is that FMCS's mediation services have effectively minimized the incidence of work stoppages. The FMCS has reported this value intermittently since at least 1964, and very likely since the FMCS's founding in 1947.

Measure: Approximate Value ($ billions) of "Avoided" or "Shortened" Work Stoppages to Employees, Businesses, and Ancillary Employees and Businesses, that might be Attributable to FMCS Mediation.

Explanation:This measure estimates the dollar value of FMCS mediation activities to employees, businesses, and ancillary employees and businesses due to avoided and shortened work stoppages. The economic model used to make this estimate was developed by the Employment Policy Foundation in 2005. It is noteworthy that such a model assumes not only a correlation between shorter or lack of stoppages and FMCS intervention, but also assumes causality. These estimates consist of the sum of "saved" profits among businesses and employee wages of both directly affected and ancillary employers. Due to circumstances beyond FMCS's control, such as annual changes in average wages, hours worked, and corporate profits, this measure exhibits a high degree of variance. For this reason, the FMCS target consists of a long-term historical average. This average is adjusted as necessary as additional years of data become available.

Measure: Proportion of Active Collective Bargaining Negotiations with Meetings Held Prior to the Contract Expiration Date.

Explanation:Active mediator involvement in a collective bargaining case prior to the contract expiration date has a statistically significant and high degree of correlation with reduced incidence of work stoppages. The FMCS emphasized this measure following an independent 2005 study.

Measure: Proportion of Assigned Collective Bargaining Cases With Mediator Activity.

Explanation:This measure indicates the number of assigned cases each year in which FMCS mediators become actively involved in the negotiations between the parties.

Measure: Proportion of Grievance Mediations Cases Each Year With Settlement Reached.

Explanation:

Measure: Proportion of Employment Mediation Cases Each Year with Settlement Reached.

Explanation:

Measure: Proportion of Closed Arbitration Cases Each Year With Timely Awards.

Explanation:

Is the program purpose clear?

Explanation: The purpose of the Federal Mediation and Conciliation Service (FMCS) is to 1) prevent or minimize the economic cost of work stoppages resulting from labor disputes in private industries, specifically those that threaten to cause a substantial interruption of interstate commerce in the U.S., impair the national defense, or disrupt the provision of health care services; and 2) reduce the time and cost burdens of disputes between federal agencies and labor organizations by improving the participation of federal workers in the formulation and implementation of personnel policies and practices that affect the conditions of their employment.

The general approach taken by FMCS in the private sector seeks to minimize the economic impact of work stoppages by reducing their incidence and duration through mediation and by promoting practices and providing solutions that generally improve labor harmony between contract negotiations. In this way FMCS seeks also to make work stoppages less likely to occur in the future. The authority for these activities comes from several statutes (see list in evidence section), but primarily derives from the Labor-Management Relations Act of 1947. Subsequent amendments to the act have expanded the FMCS's role to also minimize the effect of any work stoppage on national defense or the provision of health care services.

The authority for FMCS's second mission and its work in the federal sector also comes from numerous sources. In 1962, Executive Order 10988 provided employees with the right to engage in collective bargaining with union representation, and in 1969 Executive Order 11491 , later codified in the Civil Service Reform Act of 1978, designated the FMCS as the sole provider of "services and assistance to Federal agencies and labor organizations in the resolution of negotiation disputes." Together, these executive orders and the 1978 Act indicate the executive and congressional branches' desire to standardize national labor policy by endowing public sector workers with the same rights to labor representation as private sector workers, to develop and implement "work practices to facilitate improved employee performance and efficiency", and to provide federal employees "an opportunity to participate in the formulation and implementation of personnel policies and practices affecting the conditions of their employment."

The FMCS does not generally become involved in public sector collective bargaining negotiations, particularly if the state or local government provides its own mediation service, but makes it services available upon request to backstop the efforts of a state or local agency. Exceptions to this policy are made on a case-by-case basis in public sector negotiations that may have an effect upon interstate commerce, the national defense, or the provision of health care services. On occasion, the FMCS will accept an invitation from a state or local mediation agency to assist a negotiation or from the parties if no such agency exists.

Evidence:

• The FMCS Fiscal Year 2009 Congressional Budget Justification, available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf
• FMCS 2008-2013 Strategic Plan, available at http://www.fmcs.gov/assets/files/2008_Strategic_Plan_FINAL.pdf
• Executive Order 11491, available at http://www.archives.gov/federal-register/codification/executive-order/11491.html
• The Labor-Management Relations Act of 1947 (Public Law 80-101, 29 U.S.C. 158(d), 173 et seq.) directs the Service to prevent or minimize interruptions to the free flow of commerce growing out of labor disputes by helping the parties settle such disputes through mediation.
• The Health Care Amendments of 1974 (Public Law 93-360, 29 U.S.C. 158(d) (4)) (amending the National Labor Relations Act) include special provisions intended to prevent or minimize work stoppages in the health care industry.
• The Civil Service Reform Act of 1978 (Public Law 95-454, 5 U.S.C. 7119(a)) directs the FMCS to provide mediation assistance in disputes arising from negotiations between federal agencies and the exclusive representatives of their employees.
• The Postal Reorganization Act of 2006 (Public Law 109-435, 39 U.S.C. 1207) requires the FMCS to appoint mediators and assist in the establishment of arbitration boards in collective bargaining disputes between the Postal Service and the exclusive representatives of its employees.
• Presidential Statement, March 24, 1953. The Atomic Energy Labor-Management Relations Panel was established to ensure the uninterrupted functioning of the atomic energy program without strikes or lockouts due to labor-management disputes.
• Executive Order 11374, October 11, 1967, transferred the responsibilities of the Missile Sites Labor Commission (created by Executive Order 10946) to provide priority resolution of labor disputes at missile sites to the FMCS.
• The Federal Insecticide, Fungicide and Rodenticide Act of 1978, as amended (Public Law 95-396, 7 U.S.C. 136a(c)(l)(F)(iii)) requires the FMCS to provide for the appointment of arbitrators to decide disputes concerning compensation for the use or development of pesticide registration data.
• The Labor Management Cooperation Act of 1978 (Public Law 95-524, 29 U.S.C. 175a, 186) authorizes and directs the FMCS to encourage and support joint labor-management activities conducted by plant, area, and industry-wide committees designed to improve labor-management relationships, employment security, and organizational effectiveness
• The Administrative Dispute Resolution Act of 1996 (Public Law 104-320, 5 U.S.C., 571, et seq., 29 U.S.C.173(f)) authorizes and encourages agencies to use various alternative means of dispute resolution in the federal administrative process in order to avoid the time and expense of litigation.
• The U.S. Code of Federal Regulations at 45 CFR 90.43(c)(3), authorizes the FMCS to provide mediation assistance for the resolution of age-discrimination charges.
• The Federal Aviation Reauthorization Act of 1996 (Public Law 104-264, 49 U.S.C. 40122(a)) directs the FMCS to mediate disputes between the Administrator of the Federal Aviation Administration and its employee representatives concerning changes to the FAA's personnel management system.
• The Homeland Security Act of 2002 (Public Law 107-296, 5 U.S.C. 9701 (1)(B)(iii)) gives the Secretary of Homeland Security the option of using "the services of the Federal Mediation and Conciliation Service" to "facilitate the process of attempting to reach agreement" on proposed personnel changes in dispute.
• National Defense Authorization Act for 2004, Public Law 108-136, 5 U.S.C. 9902 (f)(B)(iii)).
• Veterans Health Care, Capital Asset and Business Improvement Act of 2003, Public Law 108-170, 38 U.S.C. 7403 (h)(4)(C)).

Does the program address a specific and existing problem, interest, or need?

Explanation: Approximately 441 work stoppages occurred in 2006 and 2007 that caused employees and businesses to lose an estimated $1.5 billion in wages and profits. Many of these stoppages adversely impacted interstate commerce and the stability of the economy. The need for improved time and cost efficiencies of disputes between federal agencies and labor organizations is demonstrated, for example, by a current FMCS case with the Patent and Trademark Office, whose employees have been working without a revised contract for more than 20 years. After negotiating on their own for more than a year to develop a new contract, the parties have recently invited the FMCS to assist them work through their remaining issues, a process that is expected to take 6-8 months.

Many different models exist to estimate the direct and indirect impacts of work stoppages and their costs. Since 2005, FMCS has used an Economic Model, developed by the Employment Policy Foundation, to estimate the cost of work stoppages, a model that is well-suited to the volume and type of data the FMCS has available for analysis. In addition to $1.5 billion in wages and profits that this model estimates were affected in FY 2006 and FY 2007, the model also estimates that disruption to ancillary businesses cost an additional $1.6 billion during this period. This model does not include losses among "downstream" users who may rely on the output of the affected company.

The FMCS seeks to mitigate the economic effects of labor discord by: 1) mediating disputes between parties to a labor agreement; and 2) facilitating the development of collaborative problem-solving approaches between labor and management to make future mediation efforts more effective. Its core work is to mediate initial collective bargaining contract negotiations??which take place between an employer and a newly certified or recognized union representing its employees??and negotiations for successor collective bargaining agreements.

Since federal employees cannot strike or be locked out, the FMCS is unable to calculate the cost of work stoppages in the federal sector. However, the intangible costs of labor unrest in the federal sector can have a considerable effect on the provision of public services. For example, protracted contract negotiations can delay implementing administrative rules or legislation.

The FMCS seeks to shorten federal contract negotiations and resolve workplace disputes before they spill over into the court system, by strengthening labor-management relationships through mediation.

A 1991 GAO study noted that while the large majority of all experts it interviewed said the federal labor-management relations program was too adversarial and often bogged down by litigation over procedural matters and minutiae, and some dispute resolution mechanisms are too lengthy, slow, and complex??"the majority of agency and union respondents to the questionnaire said they wanted to be involved in joint labor-management cooperative efforts to improve agency operations."

Despite the steady decline in private sector union membership since the early 1970's, approximately 15.7 million American workers still belong to a labor union, and more than 22,000 collective bargaining contracts will be renegotiated in 2008. Private sector unions continue to represent a large proportion of workers in strategic sectors of the national economy, such as construction, utilities, telecommunications, health care, and transportation. In contrast, public sector union membership has held more or less steady in recent decades, and just over one-third of all public sector employees are represented by unions.

Evidence:

• Impact Measures of Federal Mediation and Conciliation Service Activities 1999-2004, EPF, 2005, available at http://fmcs.gov/assets/files/Public%20Affairs/2005%20Documents/FMCS_Activities_-Main-_Final_color.pdf
• Federal Labor Relations: A Program in Need of Reform, GAO/GGD-91-101, available at http://archive.gao.gov/d19t9/144654.pdf

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: Yes. While the private sector provides the vast majority of mediation in the U.S., primarily through the court system, it is unable to provide all of the same collective bargaining functions as the FMCS. For example, parties to a work stoppage that have been enjoined to return to negotiations because such a work stoppage imperils the national health or safety??by statute??must make every effort to settle their differences with the assistance of FMCS. Further, the cost of mediating a private collective bargaining agreement can be considerable, particularly on a per-capita basis in negotiations involving relatively few bargaining unit members. These high costs could likely discourage many parties from seeking private assistance during their contract negotiation, which could lead to more work stoppages.

One other federal agency, the National Mediation Board (NMB), provides services similar to the FMCS, in addition to more than 30 state and local mediation agencies. However, the jurisdiction of the two federal mediation agencies is distinct; the Congress provided the NMB jurisdiction in the railroad and airline industries and FMCS jurisdiction in all others.

The FMCS has a limited role in mediating disputes in the state and local government sector. Generally, FMCS mediates such disputes: 1) upon the joint request of the parties to a dispute that is likely to have an adverse impact on interstate commerce, and where either no state or local mediation agency exists or where the services of the state or local agency are not available to the parties; or 2) where a health care institution is involved, pursuant to the 1974 Health Care Amendments to the Labor Management Relations Act.

The Labor Management Relations Act specifically excludes state and local governments from FMCS coverage. The FMCS does not generally become involved in public sector collective bargaining negotiations, particularly if the state or local government provides its own mediation service, but is sometimes available upon request to backstop the efforts of a state or local agency. Exceptions to this policy are made on a case-by-case basis in public sector negotiations that may have an effect upon interstate commerce, the national defense, or the provision of health care services. Through its participation in the Association of Labor Relations Agencies, the FMCS maintains relationships with state and local mediation agencies, and assists them in developing their expertise and enhancing the services that they provide.

Through the Civil Service Reform Act of 1978, FMCS has exclusive jurisdiction within federal agencies over collective bargaining negotiations until such time as they reach impasse, at which time the case is turned over to the Federal Service Impasses Panel. As with the private sector, federal agencies are not obliged to use the FMCS for help in their negotiations. To resolve other disputes agencies may create their own mechanism, use FMCS, or contract with an outside provider.

The FMCS also advocates for international core labor standards and helps foreign labor relations agencies strengthen the rule of law and workers' rights in developing countries to help to level the economic playing field for U.S. companies and workers and create stable and productive work forces that are needed to attract foreign investment and improve living conditions. In all international work, the FMCS coordinates with the U.S. Department of State to ensure that its programs do not overlap or duplicate other agencies' efforts. In fiscal year 2007, FMCS mediators attended conferences in Ireland and Australia/New Zealand, and also to renew a memorandum of understanding with China to help it design labor-management committees. In the last two years, at least six delegations from other countries' mediation agencies met with the FMCS in the U.S.

Evidence:

• FMCS Authorizations identified as evidence to support Question 1.1.
• The Railway Labor Act (NMB's Authorization), available at http://www.nmb.gov/documents/rla.html
• The FMCS Fiscal Year 2009 Congressional Budget Justification, available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf
• FMCS Directives Manual, N2105, maintained by the FMCS Office of Human Resources.
• The Federal Mediation and Conciliation Service Should Strive to Avoid Mediating Minor Disputes, Government Accountability Office, HRD-81-14, available at http://www.gao.gov/docdblite/info.php?rptno=HRD-81-14

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: There is no strong evidence that that alternative approaches to FMCS's mediation program would be more efficient or effective to 1) minimize the economic costs of work stoppages that threaten to cause a substantial interruption of interstate commerce in the U.S., impair the national defense, or disrupt the provision of health care services; and/or 2) reduce the time and cost burdens of disputes between federal agency management and employee representative labor organizations.

Additionally, FMCS has made changes to its mediation approach to improve its effectiveness and achieve greater efficiencies in response to performance data, external reviews, and customer feedback. For example, when an independent study by the Employment Policy Foundation in 2005 revealed that work stoppage durations were significantly and statistically shorter when FMCS mediation occurred before a collective bargaining contract expired, FMCS emphasized earlier intervention in disputes and began tracking mediators' involvement in cases prior to the contract expiration date. Since 2005, FMCS mediators have improved their early mediation rates from 46 percent of active cases to 48 percent in the following year, and continue to make progress towards the long-term goal of 50 percent.

Similarly, in October 1997, mediators from the FMCS also convened a series of summit meetings with representatives from the US Postal Service (USPS), four major postal labor unions and three management associations to discuss approaches to solving long-standing labor-management relations problems. Although the Government Accountability Office noted that the sometimes adversarial relationships between management and union leadership at national and local levels will always exist, it also noted that the "option of using a third-party facilitator to help the parties reach agreement on common goals and approaches has merit."

Evidence:

• 2004 Report on the Federal Mediation and Conciliation Service, Third National Survey, maintained by the FMCS Office of Public Affairs.
• June 10, 1998 Testimony of Bernard L. Unger (AO/T-GGD-98-142), available at http://www.gao.gov/archive/1998/gg98142t.pdf
• U.S. Postal Service: Little Progress Made in Addressing Persistent Labor-Management Problems, Government Accountability Office, GGD-98-142, available at http://www.gao.gov/archive/1998/gg98001.pdf

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: Yes. The FMCS has developed four mechanisms to help it effectively target resources.

First, the FMCS has set general criteria that prioritizes whether and how field staff should accept new cases through its strategic plan, procedural rules, and regular management reviews of program performance data. Field managers evaluate each potential case, consider the potential economic impact of a prolonged or failed negotiation, local factors that may affect the negotiation, the importance of the business to national security or the provision of health care services, and any overlap in jurisdiction with other federal or state agencies. Cases that are unlikely to have such impact are only rarely mediated by FMCS. Field managers also monitor mediator activity in individual cases, prioritize mediators' efforts, and validate their work. In FY 2007, the FMCS received more than 22,000 notices of expiring contracts and declined to mediate in more than 7,300 of these.

Second, since FY 2005 the FMCS has conducted an annual work load evaluation of each field office through its "Field Office Performance Matrix." This system evaluates and ranks each field office against a national case load average in four categories and is used to model and report the potential impact of staffing changes.

Third, the FMCS periodically evaluates the number and geographical distribution of its field offices and management positions required to service those offices. A July 2007 review, for example resulted in positions in two offices to remaining unfilled. Currently, the FMCS's network of approximately 170 collective bargaining mediators and 69 field offices are strategically located in areas with high concentrations of unionized workplaces. Concentration is particularly high among the major U.S. industrial states to minimize travel times and increase the parties' access to FMCS mediators and neutral meeting spaces.

Fourth, the FMCS provides district-specific case load and new business development analysis for field managers that help inform any staffing requests, target new service areas, or analyze existing work loads.

In 1980, the Government Accountability Office noted that the FMCS does not have a clear process to determine the potential for substantial interruption of interstate commerce before it becomes involved. It noted that the FMCS instead considers such factors as the number of employees in the union, the potential impact on the local community, whether the FMCS assistance is requested, and whether FMCS has mediated the parties' last dispute. It also noted that the majority of FMCS's workload is in states that have public mediation services and that FMCS continued involvement in minor disputes in states without a mediation service creates a disincentive for these states to provide such services.

The FMCS has noted that: 1) it has limited authority to collect information that would allow it to set clear conditions for its involvement in individual negotiations. For example, details of the employers' financial condition is not available and could be disclosed to the other party through a Freedom of Information Act request and undermine the FMCS's position as a neutral party; 2) the vast majority of contract expiration notices come from unions, so FMCS has insufficient information about employers at the time a case must be assigned to make a clear determination of the need for its services; and 3) state mediation services tend to only be able to mediate public sector disputes. FMCS also cooperates with state mediation services to ensure that no duplication of effort occurs.

It is noteworthy that the Congress has taken no action to change FMCS's interpretation of its mandate, that no evidence suggests that the FMCS's involvement in local government mediation discourages states from expanding mediation, and that the FMCS has encourages the development of state mediation services and staff.

Evidence:

• FMCS Directives Manual, N3104, maintained by the FMCS Office of Human Resources.
• 2007 Field Office Performance Matrix, maintained by the FMCS Office of the Deputy Director.
• Field Office #72 Case Activity Map, maintained by the FMCS Office of the Deputy Director

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The FMCS has developed three long-term performance outcome measures that estimate the impact its work is having on the economic cost of private-sector stoppages that threaten to cause a substantial interruption of interstate commerce in the U.S., impair the national defense, or disrupt the provision of health care services. Taken together, they meaningfully reflect the primary purpose of the program.

The first measure compares average work stoppage durations in cases where FMCS became involved in the dispute prior to the contract expiration date, to those where FMCS became involved after the contract expiration date, or not at all. This measure originated with a 2005 study by the Employment Policy Foundation (EPF), which revealed a strong and statistically significant correlation between the timing of FMCS's intervention in contract negotiations and work stoppage duration. Specifically, the study demonstrated that work stoppages that occurred between 1999 and 2004, in cases where FMCS mediation occurred before the contract expiration date, lasted an average of 28 days (48 percent) less than stoppages in cases where the first FMCS mediation meeting occurred after the contract expiration date expiration date or not at all. Since 2005, the FMCS has tracked active mediator involvement in a collective bargaining cases prior to the contract expiration date based on the theory that early intervention helps minimize, and is a critical component of any strategy to reduce, the incidence and duration of work stoppages.

The second measure tracks the percentage of active FMCS cases that experience a work stoppage. This "stoppage rate" is calculated by dividing the number of contract negotiations mediated by FMCS by the number of mediated cases with stoppages. The implication of a low stoppage rate is that FMCS's mediation services have effectively minimized the incidence of work stoppages.

The third measure also uses a model developed by the EPF and tracks an estimate of savings that FMCS mediation might be providing businesses and individuals through fewer and shorter work stoppages. It is noteworthy that such a model assumes 1) not only a correlation between shorter or lack of stoppages and FMCS intervention, but also assumes causality; and 2) the average value of profits and wages that businesses affected by stoppages are "lost" in a strike without any additional economic benefit such as an increased efficiency of the striking business or impact on other business. These estimates consist of the sum of "saved" profits of businesses and employee wages at both directly affected and ancillary employers and employees.

FMCS mediators do not yet estimate the cost of a work stoppage for every ongoing contract negotiation. The FMCS has also not yet developed a means to identify stoppages that threaten to cause a substantial interruption of interstate commerce or the non-economic cost of stoppages that threaten to impair the national defense or disrupt the provision of health care services. Rather, it estimates the impact of work stoppages in aggregate at the end of each fiscal year. In-year estimates are available on a limited case-by-case basis to field managers.

The FMCS has also not yet developed a measure of its long-term impact with respect to its secondary mission of reducing the time and cost burdens of disputes between federal agencies and labor organizations. Any such projects will likely to require a collection and analysis of new and substantial data.

In 2008 the FMCS will capture additional case information that will allow for more accurate "savings" estimates. A 2008 project to match each of the FMCS's customers with a Dun & Bradstreet number will also provide additional variables for analysis. From these, the FMCS hopes to identify data that will lead to improved performance measures.

Evidence:

• Long-Term Performance Measures (These measures are defined, and targets and other data are identified, in the Program Performance Measures section of this PART.)
• Impact Measures of Federal Mediation and Conciliation Service Activities (2005), EPF, available at http://fmcs.gov/assets/files/Public%20Affairs/2005%20Documents/FMCS_Activities_-Main-_Final_color.pdf
• Economic Model 2007 Update, maintained by the FMCS Office of the Deputy Director.
• Historical Work Stoppage Rate Data, maintained by maintained by the FMCS Office of the Deputy Director.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program has clear baselines from which to measure targets and changes in performance for outcome measures and the program has established long-term targets. However, several targets are not ambitious.

In order to assess the FMCS's targets one must estimate the level of impact the FMCS might have on its long term measures. Consideration of whether or not the FMCS promotes continued improvement, then, necessarily accounts for the many factors other than the FMCS's activities that also impact the data of the FMCS's long-term measures, and the variance in the impact data. For data in the economic model (the 3rd long term measure), for example, some of this variance can be attributed to changes in the economic assumptions, such as hourly wages, hours worked, and corporate profits that are beyond the FMCS's control. From 1999 to 2007, the net benefit of mediation varied between $728 million and $2.4 billion per year. A smoothing of the long-term data in order to discern meaningful long-term trends shows a continued average net benefit of $1.5 billion per year.

FMCS approaches its targets for this measure by setting its targets for 2008 through 2010 targets on the trend line, at $1.5 billion per year. Although the 2008 target reflects an 18% improvement from its 2007 estimated benefits of $1.272 million, this approach actually results in targets that maintain the status quo, according to the trend line, rather than the continued realization of additional efficiencies.

Instead, the FMCS should create a standard mechanism by which it establishes trend lines and also estimates the level of positive impact the FMCS might have on that trend, within achievable efficiencies. For example, the FMCS might increase the slope of this measure's trend line to account for recent or planned improvements to its mediation approach, like increased attention on early intervention.

The FMCS's "work stoppage rate" data (2nd long-term measure) demonstrate that the rate has declined steadily from about 1-in-3 active cases in 1969, to less than 1-in-20 in 2007. Variance in this measure, for example, is largely due to the strong effect of outliers on a relatively small number of work stoppages that currently occur each year. Recent data, however, demonstrate a downward trend, more so than great variance or years of atypical "outlier" data. While the FMCS targets for this measure represent that the FMCS anticipates that progress will reverse itself and remain flat at 5 percent, the trend of the data suggests that work stoppage rates will continue to decrease, although likely with diminishing returns. The targets of a constant work stoppage rates at 5 percent for FY08-FY10, therefore, are not reasonably ambitious.

In the case of work stoppage duration in early mediator activity, the targets again remain flat, and close to the average historical data periods of reduced duration. Since 1999, work stoppages that occurred where an FMCS mediator was first involved in the negotiation before the contract expiration date have been 44 percent shorter than work stoppages where the mediator was not involved until after the contract had expired. This number has varied between 14 and 66 percent from 1999 to 2007, and the average reduction in work stoppages with early FMCS intervention is 44 percent. The FMCS targets maintain this level of reduced stoppage durations in early mediator activity through 2010. Accordingly, while the 2008 target reflects a 15 percentage point improvement from the 2007 actual to 44 percent, maintaining this level of reduced stoppages through 2010 is not sufficiently ambitious.

Evidence:

• Long-Term Performance Measures (These measures are defined, and targets and other data are identified, in the Program Performance Measures section of this PART.)
• Economic Model Table 19 Summary, maintained by the FMCS Office of the Deputy Director.
• Economic Model Benefits of Mediation, maintained by the FMCS Office of the Deputy Director.
• Historical Work Stoppage Rate

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The FMCS has five annual performance measures that each tie to either: 1) its long-term performance goals (which measure progress toward the primary program purpose identified in the response to question 1.1); or 2) the secondary program purpose identified in the response to question 1.1. In other words, while the FMCS has developed long-term measures of its progress towards its primary purpose, it has developed annual measures that reflect progress toward both its primary and secondary purpose.

The first annual measure, the percentage of active collective bargaining negotiations with at least one meeting held prior to the contract expiration date, is the most important. This measure was identified in a 2005 independent study by the Employment Policy Foundation as a statistically significant variable strongly correlated with work stoppage durations.

The second measure, the percentage of assigned collective bargaining cases closed with mediator activity, is an important indicator of mediator and the FMCS's effort in finding opportunities for intervention. The FMCS tracks mediator involvement in negotiations based on the theory that such activity provides opportunities for the FMCS to repair and strengthen existing labor-management relationships, thus reducing the probability that work stoppages will occur in the future.

The third and fourth measures, the percentage of grievance and employment mediation cases closed due to dispute settlement being reached, are important indicators of mediator effectiveness and the FMCS's progress of improving bargaining and employment relationships. The FMCS tracks settlement in individual grievances under the theory that mediation improves relationships between employees and employers, and thus also decreases tensions at the bargaining table and the time and cost burdens of such a dispute.

The fifth measure, for the FMCS arbitrator referral service, is the percentage of cases that were completed (closed) with an award made in a timely manner. While arbitrators are not employed by the FMCS, the performance of FMCS-endorsed arbitrators, as measured by the percent of cases closed with a timely award, is tracked under the theory that the behavior of arbitrators affect labor and management's perceptions of the FMCS and any programs that its mediators deliver. The FMCS notes that while cannot directly control the activity of arbitrators in its referral service, it is responsible for ensuring that its arbitrators uphold its high standards. Thus, high quality awards, made in a timely manner, support the overall mission of FMCS and provide the FMCS with opportunities to help repair troubled relationships through its mediation program.

Evidence:

• Annual Performance Measures (These measures are defined, and targets and other data are identified, in the Program Performance Measures section of this PART.)
• FMCS 2008-2013 Strategic Plan, available at http://www.fmcs.gov/assets/files/2008_Strategic_Plan_FINAL.pdf
• The FMCS FY 2009 Congressional Budget Justification, available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf
• Impact Measures of Federal Mediation and Conciliation Service Activities (2005), Employment Policy Foundation, available at http://fmcs.gov/assets/files/Public%20Affairs/2005%20Documents/FMCS_Activities_-Main-_Final_color.pdf,

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The program has baselines for all annual measures, specific annual targets have been established that provide a specific value with which performance can be compared, and targets are included for two years beyond the current year. However, most of the targets are not ambitious and don't promote continued improvement within achievable efficiencies.

As with the targets for FMCS's third long-term measure, the FMCS has set targets for each of its five annual measures on the trend lines of its historical performance, rather than estimating the level of positive impact the FMCS might have on that trend, within achievable efficiencies.

Targets for the percentage of assigned collective bargaining cases closed with mediator activity, for example, represent performance within trends of a data time-series that the FMCS has published intermittently since 1959. From 1985 to present?? the percentage of active cases to closed assigned cases averaged 30 percent, even as the number of collective bargaining agreements up for renegotiation and the number of FMCS mediators has fallen. While the proportion of assigned collective bargaining cases with mediator activity has increased since 2004, though, the 2008-2010 targets reflect a decrease below the 2007 actual performance and maintenance of the decrease. The FMCS notes that efforts to substantially raise this rate must be pursued cautiously as such efforts risk damaging the status of mediation as a voluntary process.

The FMCS first published data for the percentage of active collective bargaining negotiations with at least one meeting held prior to the contract expiration date in 2005 and later recreated data back to 1998. From 1998 to 2004, this measure rarely exceeded 40 percent. After the FMCS emphasized the importance of early mediation to its mediator corps in 2006 this rate rose to nearly 48 percent. The targets for this measure are based on the assumption that over the next few years, the FMCS's mediators will become involved in 50 percent of assigned cases before contract expiration. While the trend of recent data reflects a continued path towards increasing this percentage, the law of diminishing returns suggest that the 2008 target of 50 percent is likely ambitious. However, the targets for 2009 and 2010 do not reflect ambitious, continued, realization of efficiencies.

Targets for the third and fourth measures, the proportion of cases closed as a result of the parties settling their dispute in either an employment mediation (EM) or a grievance mediation (GM) case, are based on much shorter trend lines. The FMCS first published the GM measure in 2004. The "settlement rate" has recently been approximately 75 percent, and since 2004, the first year with available data, the rate has fluctuated between 75 and 82 percent. Since 2005, the early mediation rate has averaged 47 percent and since 1998, the first year with available data, the rate has fluctuated between 35 and 48 percent. EM targets reflect decreases to current performance over the next three years, although the trend line does not reflect performance is declining. The targets for GM reflect continuation of the performance level of the past three years for the next three years rather than ambitious, continued, realization of efficiencies.

The FMCS first began tracking the final measure, the percentage of arbitration referral service cases that were completed (closed) with an award made in a timely manner, in 2005. The trend in available data reflects a continued decrease in the performance. The target of having 99.95 percent of arbitrator awards made in a timely manner in 2008 therefore represents an ambitious goal, while the targets of maintaining this level in 2009 and 2010 may or may not seem ambitious once the 2008 data is available.

Evidence:

• Annual Performance Measures (These measures are defined, and targets and other data are identified, in the Program Performance Measures section of this PART.)
• The FMCS FY 2009 Congressional Budget Justification, available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: N/A. Several other academic programs; federal, state, and local agencies; professional associations; businesses; and labor unions support the larger goal of promoting labor harmony in the American economy and the FMCS does collaborate on a number of fronts with these groups to promote best practices and collective bargaining mediation. However, none of these entities are responsible for carrying out different aspects of the FMCS program and none explicitly work towards FMCS's long-term goals. Accordingly , none report to the FMCS on their performance as it relates to accomplishing the program's goals.

The FMCS does provide an arbitrator referral service that is available to collective bargaining parties and collects information on how well these independent contractors adhere to basic FMCS expectations for the program. The work of FMCS arbitrators, though, does not directly affect the FMCS's primary mission and the FMCS provides no funding or direct oversight of the arbitrators or their work, despite a general confluence of interests.

The 2005 independent study by the Employment Policy Foundation upon which FMCS bases several of its performance measures also noted that "to help reduce the duration of work stoppages that do occur, FMCS should consider disseminating information contained in this report to educate union and employer representatives of the cost of a stoppage in their specific industry. Additional research might also prove helpful in determining the impact of a work stoppage in a particular industry. Future research could include the analysis of labor contract specific information??such as the timing of unfair labor practice charges, grievance filings, and previous participation in FMCS mediation activities??to identify negotiations that are highly likely to result in a work stoppage before the stoppage occurs. This system can also help mediators focus on negotiations that would potentially cause the most disruption to economic activity."

One important part of the FMCS's collaboration consists of maintaining close working relationships with state mediation agencies and by sponsoring and co-sponsoring regional and national labor-management conferences. Through these conferences, the FMCS promotes best practices, exposes attendees to new or improved conflict resolution models and techniques, provides a forum for attendees to share their success stories, and introduces mediation models from other nations. The largest of these conferences, the bi-annual National Labor-Management Conference (NLMC), brings together labor and management labor relations professionals from across the U.S. and the world to discuss emerging labor issues and solutions. The 14th NLMC will be held June 9-11, 2008 in Washington DC, and the FMCS expects more than 1,200 attendees. In any given year, the FMCS also sponsors and co-sponsors approximately 80 regional or state labor-management conferences.

Another collaborative effort occurs through its mediators, who maintain close relationships with a number of prominent professional organizations, such as the Labor and Employment Relations Association (LERA) and the Association of Labor Relations Agencies (ALRA). In recent years the FMCS has pursued a number of partnerships with academic institutions that specialize in labor relations and conflict resolution, including the University of Michigan, Pepperdine University, Georgia State University, and The Kennedy School. Through its linkages with academic and professional organizations, the FMCS seeks to share its experience and expertise among labor relations professionals and to learn from individuals whose cutting edge work and research help the FMCS improve its own mediation programs and performance.

Evidence:

• Description of the Office of Arbitration Services, available at http://www.fmcs.gov/Internet/itemDetail.asp?categoryID=185&itemID=16525
• 14th Annual National Labor-Management Conference Calendar, available at http://www.fmcs.gov/internet/itemDetail.asp?categoryID=229&itemID=17884 Flier
• Regional Conference Calendar, available at http://www.fmcs.gov/internet/calendar.asp?categoryID=40.
• FMCS Academic Partnerships, available at http://www.fmcs.gov/internet/itemDetail.asp?categoryID=32&itemID=15906

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The FMCS commissioned a study in 2005 from an independent non-profit economic analysis organization, the Employment Policy Foundation (EPF), which revealed that work stoppage durations were significantly shorter when FMCS mediation occurred before a collective bargaining contract expired. The study was conducted by an unbiased, independent party, and was of sufficient quality scope to provide results that enabled the FMCS to make significant program improvements.

The FMCS also commissioned the EPF to estimate the economic costs of work stoppages in the U.S. economy and, assuming a causal connection behind the correlation described above, the benefits of the FMCS's mediation efforts. The economic model integrates data sets from the Current Population Survey (a joint product of the U.S. Department of Labor and the U.S. Census Bureau), the Department of Commerce Bureau of Economic Analysis' Regional Input-Output Modeling System (RIMS II) and National Income and Product Accounts to create a cost estimate for each work stoppage that occurs. The model also estimates the value of work stoppages that it assumes are avoided or shortened through FMCS intervention using data from the University of Massachusetts (U of M) studies discussed below and the aforementioned data sets.

In 1996, 1999 and 2003, the FMCS also commissioned independent national survey studies of its mediation programs as part of the National Performance Review initiative. These studies, conducted by a team of nationally known labor relations experts from the Center for Survey Research at (U of M) and the MIT Sloan School of Management, used matched-pair telephone interviews of more than 3,800 of FMCS's labor and management customers. These matched pairs represent roughly 1-in-10 of the FMCS's collective bargaining negotiations in any given year. A sample of this size is sufficient to allow meaningful assessment of the customers' views of the mediation programs.

From its experience with these studies, the FMCS has made a number of important changes to the data that it collects and the way in which it prioritizes mediator activity. For example, using the methodology and data model developed by EPF, the FMCS creates new estimates each year as part of its budgeting process and to emphasize the benefits of early mediation. These estimates help raise public awareness of the real economic costs that occur as a result of work stoppages. The EPF-provided model also gives the FMCS a limited capacity to estimate the daily cost of a work stoppage before it actually occurs. This estimate differs from those commonly produced by industry analysts when a major work stoppage looms, in that industry analysts tend to only consider lost sales and company profits, not the loss of employee wages and the effect of the stoppage on suppliers of goods and services to the company involved.

It is noteworthy that the FMCS does not measure or estimate its long-term impact on areas related to the program's second purpose: to reduce the time and cost burdens of disputes between federal agencies and labor organizations. The FMCS is encouraged not only to continue collecting meaningful data that will allow it to commission regular studies of the scope and quality of the EPF review, but also to support continued program improvements by collecting any additional data that might enable more detailed analysis of the FMCS's impact and disputes that show the greatest potential to disrupt economic activity.

Evidence:

• 1997, 2000, and 2004 National Performance Review Surveys, available at maintained by the FMCS Office of Public Affairs..
• Impact Measures of Federal Mediation and Conciliation Service Activities, Employment Policy Foundation (2005), available at http://fmcs.gov/assets/files/Public%20Affairs/2005%20Documents/FMCS_Activities_-Main-_Final_color.pdf

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The FMCS annual Congressional Budget Justification (CBJ) provides a budget presentation that is partially integrated with its performance information. The FMCS CBJ does include the FMCS's annual and long term performance measure data, as well as targets for future fiscal years. The CBJ does not, however, include in its budget presentation information of what impacts alternative levels of funding might have on expected performance. The relationship between the FMCS's resources and its annual and long-term performance targets are unclear.

This information is missing, in part, because many factors other than the FMCS's activities also impact the FMCS's ability to meet its performance targets, and many of those factors are unpredictable and demonstrate great variance. Also, any direct measure of successfully reducing work stoppages necessarily involves an estimated benefit of something that will not occur. When the FMCS is able to estimate the value of its services, the external data that it relies upon changes unpredictably from year-to-year, depending upon national economic conditions. These issues affect the FMCS's ability to provide evidence that the requested resources mix will enable the program to achieve its performance goals and to report the resources needed to meet its performance targets.

The CBJ contains a Workload Outputs and Projections section that reports on prior year outputs and estimates outputs associated with the President's Budget level. These estimates are developed during each budget cycle by projecting the FMCS's current-year work loads and anticipated mediator head counts. For internal scenario modeling, the FCMS has developed a Field Office Performance Matrix. This programmable database is used by the FMCS to prioritize and inform staffing decisions and to model the specific effect that retirements, new hires, and reorganizations will have upon mediator work loads.

In the past, the remaining long-term data have been published each year in an annual update to the Economic Model. Future CBJs will include these data.

Evidence:

• Historical Staffing Data, maintained by the FMCS Office of the Deputy Director.
• 2007 Field Office Performance Matrix, maintained by the FMCS Office of the Deputy Director.
• Hourly Mediator Cost Work Sheet, maintained by the FMCS Office of Budget and Finance
• The FMCS Fiscal Year 2009 Congressional Budget Justification available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The FMCS undertook a major rewrite of its Strategic Plan in the summer of 2007 to address a number of deficiencies it identified through a series of internal discussions and to integrate lessons learned from independent evaluations conducted in 2005. These included: 1) an updated analysis of the challenges and opportunities that may appear in the future; 2) re-aligning program descriptions into groups that better reflect the FMCS's business model; and 3) clearly differentiating between outputs and outcomes and the data available to describe progress in each. The new plan also detailed for the first time a discrete set of actions to be used in meeting its strategic goals.

Evidence:

• FMCS 2008-2013 Strategic Plan, available at http://www.fmcs.gov/assets/files/2008_Strategic_Plan_FINAL.pdf
• FMCS 2004-2009 Strategic Plan, maintained by the FMCS Office of the Deputy Director.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The FMCS collects workload, labor contract expiration, and work stoppage data and uses this information to assign cases to mediators (see 1.5) and make other program priority, resource, and management decisions. In addition, the program regularly collects output data, as well as information related to its long-term goals, and uses this information to collect the baseline data necessary to set meaningful, ambitious performance targets.

Since 1983, the FMCS has maintained an electronic case and contact management system that field staff use to record and track their work activity. The FMCS case system is also available to key national office staff for accessing summary information and creating routine manager and performance reports.

National office staff generate reports from the system on a routine and as-needed basis. Each week, field and national managers are provided with summaries of mediator activity in work stoppage and significant cases in their district. Monthly reports include performance data for each field office and mediator under their supervision. Field managers use the monthly reports to help decide how to allocate upcoming assignments among the mediators, ensure proper case reporting, and monitor mediator effort. Field managers conduct semi-annual reviews of each mediator's work and revisit action plans as necessary. Each field manager receives an annual report summarizing mediator case loads and providing other data that become a part of mediator annual performance reviews and work plans. Data from this system also feed directly into the Economic Model, Field Office Performance Matrix, and GIS mapping software. Other reports are written as needed to inform a wide range of management decision-making.

The FMCS has also used the findings of a 2005 independent study (see answer to question 2.6) to modify its approach to mediation to improve the program's long-term impacts. When the 2005 study revealed that work stoppage durations were significantly shorter when FMCS mediation occurred before a collective bargaining contract expired, the FMCS adopted a performance measure that tracked mediators' involvement in cases prior to the contract expiration date, and emphasized this statistic in its mediator performance evaluations. Since 2005, FMCS mediators have improved their early mediation rates from 46 percent of active cases to 48percent.

As noted in the 2005 study, the FMCS should encourage research on the impact of stoppages in particular industries and to disseminate information contained in the EPF report to educate union and employer representatives of the cost of a stoppage in their specific industries. As noted in the report, "Future research could include the analysis of labor contract specific information??such as the timing of unfair labor practice charges, grievance filings, and previous participation in FMCS mediation activities??to identify negotiations that are highly likely to result in a work stoppage before the stoppage occurs. This system can also help mediators focus on negotiations that would potentially cause the most disruption to economic activity."

It is noteworthy that the FMCS is unable to use workload, work stoppage, and contract expiration data to manage its resources toward achievement of several annual, and all of its long-term performance measure targets. This is because many factors other than the FMCS's activities also impact the FMCS's ability to meet its performance targets, and many of those factors are unpredictable and demonstrate great variance (See 2.7). The FMCS also does not benefit from frequent and objective audits of an Inspector General or an office dedicated to validating the quality of its output data.

Evidence:

• Monthly DOS-46, maintained by the FMCS Office of the Deputy Director.
• Monthly DOS-80, maintained by the FMCS Office of the Deputy Director.
• FOIA Work Stoppage Report, available at http://www.fmcs.gov/internet/downloadsList.asp?categoryID=276

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: The FMCS federal managers are held accountable for cost, schedule, and performance results.

FMCS maintains a well-defined field office structure consisting of mediators, regional office staff and managers, national program and administrative managers, and national office support staff. Fourteen managers are directly responsible for achieving key program results. These consist of two national office, two regional, and 10 district, or sub-region, managers. Thirteen of these are provided an annual operating budget by which to manage their office and operations.

With its 170 mediators travelling a total of more than 2 million reimbursable miles on official business in 2007, the FMCS places a high priority on strong financial controls. Budgets, expenditures, and open obligations are examined monthly by the budget and finance office. Field managers provide the first check, verifying that monthly travel voucher submissions correspond to an event in the mediator's travel itinerary. After this stage, internal audit personnel verify that travel reimbursements are reasonable and appropriate to the work performed.

For managers that are provided an annual operating budget, each is provided monthly operating reports and is required to stay within that budget. Failure to stay within their operating budget will affect a manager's annual performance review and, if the problem persists, may trigger a broad review of that manager's work. Over the past three years, the FMCS has not taken any administrative actions regarding violations of budget allocations. However, managers' performance are evaluated each year, with step increases and performance awards tied directly to individual performance.

All of the managers responsible for key program results are accountable for quantifiable performance results. This is done by setting specific performance expectations in the managers' performance plans. Those plans require the managers to monitor subordinates' contributions and to intervene when necessary. In the last three years, managers have placed three mediators on Performance Improvement Plans (PIP) to address performance deficiencies. Through the efforts of the managers involved, each mediator was given the opportunity to address and correct their deficiencies; and in all cases, performance improved to an acceptable level.

The FMCS directives manual also provides guidance on its internal administrative policies. Each employee has electronic access to this manual and is expected to comply with and is held accountable for following these written policies. Over the past three years, the FMCS has taken two administrative actions regarding violations of these rules.

The FMCS monitors procurement card use in a similar fashion. Every procurement card holder is required to itemize each expense monthly and submit these expenses in a timely fashion. Failure to comply with these guidelines may result in revocation of travel or procurement card privileges.

Each FMCS employee is responsible for his/her time management and the schedule of deliverables for which he/she is responsible. The 14 managers review employee performance time and attendance records on an on-going basis. Managers conduct formal mid-year performance reviews at the end of the second quarter and formal annual performance reviews at the end of each fiscal year. If necessary, managers may proscribe remedial action to improve an employee's performance, including a PIP.

The FMCS holds contractors accountable for their performance through written contracts. For major projects, particularly for information technology systems, the FMCS dedicates a contracting officer's technical representative (COTR) to supervise the project.

Evidence:

• The FMCS Fiscal Year 2009 Congressional Budget Justification, available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf
• FMCS Directives Manual, N5305
• Monthly Operating Budget Reports maintained by maintained by the FMCS Office of Human Resources.
• Sample Monthly Operating Budget Report, maintained by the FMCS Office of Budget and Finance.
• CCMS Contract, maintained by maintained by the FMCS Office of the Deputy Director.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: FMCS has internal controls and an automated accounting system to provide checks and balances to ensure that funds are obligated in a timely manner and spent for the intended purpose. Each fiscal year since 1996, FMCS has obligated most of the available appropriation. Obligations are initiated by the administrative staff based on need and the program operating plan. Invoices are submitted and reviewed each month to ensure accuracy and that correct funding was cited. The budget and finance office generates monthly Status of Funds Reports based on the accumulated obligation detail reports. These reports are reviewed each month by program and administrative managers. In addition, monthly travel reports are generated and submitted to the field offices for review. The review consists of comparing the program operating plans to actual spending. Adjustments are made to the operating plan if necessary after the review process. This review and reconciliation of reports enables FMCS to submit accurate data to FACTS II and generate accurate financial statements. In response to the Accountability of Tax Dollars Act and the President's Management Agenda, FMCS completed its first audit of financial statements in 1996 and a consolidated Performance and Accountability Report.

Evidence:

• FMCS Fiscal Year 2007 Audited Financial Statements, available at http://www.fmcs.gov/assets/files/FY2007FinancialStatementpdf.pdf.
• FMCS Fiscal Year 2007 SF-133s, maintained by the FMCS Office of Budget and Finance.
• Monthly Budget Detail Reports, maintained by maintained by the FMCS Office of Budget and Finance.
• Monthly Travel Reports maintained by maintained by the FMCS Office of Budget and Finance.
• Monthly Status of Funds Report maintained by maintained by the FMCS Office of Budget and Finance.
• FY 2007 Performance and Accountability Report maintained by the FMCS Office of Budget and Finance.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The measure identified by the FMCS as an efficiency measure, the percentage of cases involving FMCS mediation that reach settlement, which is reported each year in the CBJ and the FMCS annual report along with its baseline and targets does not track improvements or degradations in the quantity, volume, or mix of outputs as they relate to corresponding increases or decreases in related costs or inputs.

It is noteworthy that the FMCS has managed towards its performance targets and strategic goals by achieving new efficiencies and limiting the impact of funding reductions on its mediation services. While the number of FMCS employees has fallen by more than 52 percent over the past 30 years, the greatest share of the reduction has been among managers and support staff at 62 and 65 percent, respectively, while mediator reductions have been far lower, at 43 percent. Despite these fairly dramatic changes, mediator case loads in collective bargaining cases have remained stable at approximately 30 a year, even as case loads have increased in other areas such as ADR, grievance mediation, and outreach. The differential in the rates of decrease shows that even as the overall program has shrunk in size, the role of mediators remains a priority focus.

In relation to its work loads, the FMCS also pursues efficiency in its internal operations and in the productivity of its mediator corps. To this end, the FMCS undertakes an annual review of its field office work loads to help managers allocate employee resources efficiently and to assist field offices in evaluating their performance relative to others. The field office assessment process involves calculating a performance score for each field office, based upon the difference between the office (per FTE) workload and a national average for: active cases; assigned cases; and the number of mediation and training meetings. Scores are compiled for the most recently completed fiscal year and an average of the four most recently completed fiscal years. The offices are then ranked in order from highest score to lowest. The four-year averages are consulted when FMCS managers discuss how to best allocate mediator resources among the field offices.

Field managers also use the metric of active collective bargaining cases per mediator through a separate process to evaluate the level of effort by individual mediators. This effort is reflected in each mediator's annual performance review. Since 1985, the number of collective bargaining cases assigned to FMCS mediators has fallen by 43 percent, mirroring a dramatic decline in the number of contract negotiations. However, the number of cases in which mediators became involved fell less dramatically, by 36 percent, as mediators increased their involvement in cases. Over this same period, the FMCS reduced its total work force by 24 percent and management positions by 30 percent. Despite these fairly dramatic changes, mediator case loads in collective bargaining cases have remained stable at approximately 30 a year, even as case loads have increased in other areas such as ADR, grievance mediation, and outreach. Looking forward, in late 2006, the FMCS began a series of internal and independent evaluations of each functional area in the national office. To date, the information technology department, arbitration service, and notice processing unit have been evaluated and provided with specific action plans for any necessary reorganization.

Evidence:

• IT Report, maintained by the FMCS Office of the Deputy Director.
• NPU-Arbitration Organizational Analysis, maintained by the FMCS Office of Education and Training.
• FY 2007 Field Office Performance Matrix, maintained by the FMCS Office of the Deputy Director.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The FMCS works closely with federal and state agencies and independent organizations at the national and local level to promote better relations between labor and management. The FMCS was instrumental in founding the Association of Labor Relations Agencies (ALRA) and maintains a presence on the ALRA board of directors. ALRA is an association of impartial government agencies in the United States and Canada responsible for administering labor-management relations laws or services. The association promotes cooperation among these agencies, high professional standards, public interest in labor relations, improved employer-employee relationships, peaceful resolution of employment and labor disputes, and the exchange of information regarding the administration and improvement of agency services. The FMCS has also been a long-standing member of the Labor and Employment Relations Association (LERA), an organization where professionals interested in all aspects of labor and employment relations network to share ideas and learn about new developments, issues, and practices in the field. FMCS mediators and managers hold a number of positions on LERA committees. The FMCS is also an active member of the National Academy of Arbitrators, an organization that developed and maintains a code of professional conduct for arbitrators.

In the federal sector, the FMCS collaborates with the National Labor Relations Board (NLRB) to obtain information about initial contract certifications and other areas of mutual interest. The FMCS also trains and consults with the Department of State on all foreign labor relations matters. The FMCS also collaborates with a number of federal agencies to design systems for internal or external dispute resolution. On a state and local level, the FMCS sponsors, co-sponsors, or participates in an average of 80 labor-management conferences each year.

Evidence:

• Web Page of the National Academy of Arbitrators, available at http://www.naarb.org/
• Labor and Employment Relations Association List of Organizational Members, available at http://www.lera.uiuc.edu/about/OrganizationalMembers.html and Committee Rosters, available at http://www.lera.uiuc.edu/about/Rosters/committees.html
• Association of Labor Relations Agencies Committees List, available at http://www.alra.org/com.htm
• Office of Personnel Managment Guide to Alternate Dispute Mediation, available at http://www.opm.gov/er/adrguide/section4.asp

Does the program use strong financial management practices?

Explanation: Since its first audit for FY 2006, FMCS has received unqualified opinions and had no material internal control weaknesses reported. The FMCS accounting department has established an accounting procedures manual that governs its day-to-day operations. The manual requires a separation of duties among procurement, receiving officials and voucher examiners to ensure that payments are made properly and timely according to the Prompt Payment Act, and only when documented as received and accepted goods and services. The FMCS maintains its own core off-the-shelf accounting financial system. This system has controls to prevent any duplicate invoices and thus minimizes erroneous payments. Transactions are posted directly to both sub-systems and the general ledger at the same time, allowing reports to be run at any time with up-to-date and accurate information.

Evidence:

• FMCS Fiscal Year 2007 Audit Report, maintained by the FMCS Office of Budget and Finance.
• FMCS Accounting Procedures Manual, maintained by the Office of Budget and Finance.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: No. While the FMCS has a history of correcting management deficiencies in a timely manner, it does not maintain a formal system for identifying and addressing its management deficiencies within agreed upon time frames.

Since its creation in 1998, the FMCS Partnership Council has helped FMCS identify challenges and problems, and suggested solutions for issues that may impede the FMCS's ability to perform its core work. However, the Council does not make regular recommendations to improve management deficiencies or identify specific improvement periods and actions to address management deficiencies.

The Council membership currently consists of 10 peer-elected mediators, both regional directors, two district directors and two representatives selected by the FMCS director, and meets twice a year, a design that follows the "Good Government Standard" that the National Partnership Council articulated in its January 1994 Report to the President on Implementing Recommendations of the National Performance Review. Council meetings address policies, procedures, or issues that may affect mediator and manager performance. If issues cannot be resolved during Council meeting, the Council may create a subcommittee or working group, or task specific individuals, to resolve it within a specific timeframe and report progress back to the Council.

In 2007 the Council designated a subcommittee to develop the FMCS's strategic plan and providing recommendations to the FMCS director on a new mediator performance evaluation system. The Council's work on the plan included formulating the performance indicators that the FMCS uses to evaluate its performance. The mediator evaluation system's critical elements for individuals, which the Council helped to revise in 2007, directly support the performance indicators in the strategic plan.

In FY 2007, all supervisors and managers completed the Federal Competency Assessment Tool-Management (FCAT-M). This on-line tool from U.S. Office of Personnel Management helps the FMCS to identify areas for managerial development and to use the results to conduct individual development planning. The FMCS is including the results in short- and long-term leadership development planning as required by 5 CFR 412.103.

Future improvements to FMCS's managerial programs will focus on developing succession, back-up, and disaster recovery, and operations continuity planning for field and national office functions, as recently mandated in Federal Continuity Directive 1 (FCD 1). In a second phase of updating mediator core competencies, the FMCS is currently drafting new performance elements for managers that tie to its executive core competencies. The final adoption of these elements is expected in October 2008.

Evidence:

• FMCS Accounting Creating A Government that Works Better and Costs Less, (1994 Report to the President on Implementing Recommendations of the National Performance Review), available at http://govinfo.library.unt.edu/npr/library/papers/bkgrd/nprtoc.html
• Pension Protection Act Issue Brief, maintained by the FMCS Office of the Deputy Director.
• Partnership Council Meeting Minutes, maintained by FMCS Office of the Deputy Director.
• Aerospace Industry Notebook Session, maintained by the FMCS Office of Education and Training.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program is on track to meet all its long-term performance goals, but several targets are not ambitious (See answer to question 2.2).

Also, while the FMCS has the capability of measuring and estimating the cost of individual work stoppages, it has not yet developed a means to identify and measure the cost of those stoppages that threaten to cause a substantial interruption of interstate commerce, impair the national defense, or disrupt the provision of health care services. Rather, it estimates the aggregate impact of work stoppages and provides individual analyses on a case-by-case basis. Nor has the FMCS yet developed a measure of its long-term impact on its secondary mission: to reduce the time and cost burdens of disputes between federal agencies and labor organizations by improving the participation of federal workers in the formulation and implementation of personnel policies and practices that affect the conditions of their employment.

Evidence:

• The FMCS Fiscal Year 2009 Congressional Budget Justification, available at http://www.fmcs.gov/assets/files/Public%20Affairs/Budget2009_CongressionalSubmitted.pdf
• Historical Work Stoppage Rate, See this measure, which is defined, and for which targets and other data are identified, in the Program Performance Measures section of this PART.
• 2007 Economic Model Summary, maintained by the FMCS Office of the Deputy Director.
• Early Mediation Summary, maintained by the FMCS Office of the Deputy Director.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program has met eight of the fifteen targets identified since 2004 for its five annual measures evaluated in Question 2.4. It is noteworthy that six of the eight targets met, however, were not ambitious.

The 2007 target met in the third annual measure (percentage of employment mediation cases closed due to dispute settlement being reached) reflected a decrease to 2006 performance, although the trend line did not reflect performance was declining.

The 2006 and 2007 targets met in the fourth measure (percentage of grievance mediation cases closed due to dispute settlement being reached) reflected continuation of the performance level of the past years rather than ambitious continued, even slight, realization of efficiencies.

The 2005-2007 targets met for the fifth annual measure (percentage of arbitration referral service cases that were completed with an award made in a timely manner) also reflect increased reductions in performance, despite increased performance since 2005.

It is also important to note, though, that basing targets off of trend lines in measures that reflect great variance may result in targets that, if set in a year following variance below the trend line, will both reflect decreased performance, but be reasonably ambitious. That was not the case in the six non-ambitious targets that were met. It is also common to miss annual targets in measures to that reflect great variance, through no fault of the program.

Evidence:

• Annual measure performance data. (All measures are defined, and targets and other data are identified, in the Program Performance Measures section of this PART.)

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program has not yet established an adequate efficiency measure and therefore did not meet an efficiency target this year.

Evidence:

• Answer to Question 3.4.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There have been no studies comparing the services of the FMCS to the National Mediation Board (NMB), a federal agency with similar purpose and goals; there have been no studies that compare services of the FMCS to the services of the approximately 30 states and several large cities that provide mediation services; and it is unclear whether the FMCS settlement rates among public sector collective bargaining cases are comparable to those of the many states that provide mandatory public sector collective bargaining negotiations.

The NMB has a similar purpose and goals to the FMCS, though its jurisdiction is different (airlines and railroads), and strikes are much less frequent in the industries of its jurisdiction. It is noteworthy that the NMB, unlike FMCS, can exert some control over work stoppages by refusing to release parties to a collective bargaining agreement from contract negotiations. Also, the last railroad strike was in 1994 and there were only 4 airline strikes between 2002 and 2007??which provides insufficient stoppage data for some outcome comparisons. However, there have been no evaluations comparing services of the two agencies.

Many states also have services that provide mandatory public sector collective bargaining negotiations. The state of Minnesota, for example, reports contract mediation settlement rates in the range of 82 to 91 percent. However, there have been no evaluations that compare FMCS's settlements rates or other indicators of its services to those of other voluntary collective bargaining mediation cases in the public sector.

There is a plethora of data available on private, public, voluntary and court-ordered mediation. However, the measures of the success of these programs and such data cannot be easily compared. For example, while FMCS could study the broad range of settlement rates (most fall between 50 and 90 percent), for example, there are numerous definitions of "settlement" and in each case there are different incentives to reach agreement. Still, no comparison has been pursued.

Other federal agencies also conduct mediation, but again there are no studies examining mediation outcomes using data or terminology directly compatible with that produced by the FMCS. The Equal Employment Opportunity Commission, for example, notes that in 2003 it achieved a 69 percent success rate in its ADR mediation, which is a higher rate than FMCS's settlement rate of 50 percent for comparable mediation activity, but the EEOC mediates a very heavy case load of private and public sector cases and carries additional enforcement powers. The FMCS on the other hand, generally limits itself to federal sector cases and its mediation is voluntary.

Evidence:

• Department Results report of the Bureau of Mediation Services, available at http://www.departmentresults.state.mn.us/bms/DeptDetail.htm
• National Mediation Board and Railway Labor Act Fact Sheet on the role of the National Mediation Board in collective-bargaining negotiations in the airline and railroad industries, available at http://www.nmb.gov/mediation/factsheet_thru-fy07.pdf
• Fact Sheet on the U.S. Equal Employment Opportunity Commission's Alternative Dispute Resolution Program, available at http://www.eeoc.gov/mediate/mediation_qa.html

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The FMCS has commissioned two sets of independent professional studies of its mediation services since 1996.

In 2005, the FMCS commissioned an independent study of the impact of its mediation on work stoppag duration in the U.S. from the Employment Policy Foundation (EPF). Its initial analysis of the data showed that FMCS's mediation activity, in general, did not play a role in reducing work stoppage durations. (It is noteworthy that such an impact review of existing data could not control for those parties that invited FMCS to the negotiations and those that did not.) The study did, however, find a strong and statistically significant correlation between the timing of FMCS's intervention in contract disputes and work stoppage duration. In other words, while the length of stoppages when the FMCS is invited to the mediation table are not statistically different from stoppages when the FMCS is not invited, those who invite the FMCS to the table before the labor contract expires are likely to have stoppages that are 48% shorter than those who invite the FMCS to the table after a contract expires or not at all.

The EPF study also went further to estimate potential economic benefits of the FMCS's mediation. It assumed that if: 1) the relationship between mediation and stoppage duration was causal??that is, the study results reflected that early mediation reduced the stoppage duration, as opposed to that parties to shorter stoppages are more likely to invite FMCS for early mediation??; and 2) if the average value of profits and wages that businesses affected by stoppages should be considered "lost" in a strike??that is, the strike itself does not make the business more efficient or those profits and wages are not "picked up" somewhere else in the economy; THEN the mediation could be estimated to have saved an annual level of $1.5 billion.

The FMCS also commissioned a series of customer surveys that were conducted in 1996, 1999, and 2003 by the University of Massachusetts' Center for Survey Research, with principal investigators from the Massachusetts Institute of Technology's Sloan School of Management. Each survey was administered to approximately 1,200 matched pairs of labor and management negotiators drawn from FMCS-mediated cases over the preceding three years. Key findings of the 2003 survey were that: in 51 percent of the cases involving mediation, the parties indicated that, in their opinion, a work stoppage would have been likely in the absence of mediation; 89 percent of union representatives and 85 percent of employer representatives said that FMCS mediation and services met or exceeded their expectations; and 80 percent of management and 94 percent of union representatives gave a positive assessment of the mediators' knowledge of industry-specific issues. Other FMCS services, such as training and arbitration panels, were all rated highly by those who had used them.

Currently, the FMCS is in the process of cleaning and standardizing its existing case database, and expects to complete this process by the middle of 2009. The standardization project consists of updating data fields and values so that the FMCS can connect its data directly with other U.S. government and private data sources, particularly those from the U.S. Census Bureau, Department of Labor, and the Bureau of Economic Analysis. This standardization is expected to lower the cost barriers to entry for groups that wish to conduct independent and high-quality analysis of FMCS data.

Evidence:

• 1997, 2000, and 2004 Center for Survey Research Study Results, maintained by the FMCS Office of the Deputy Director.
• Impact Measures of Federal Mediation and Conciliation Service Activities (2005), Employment Policy Foundation, available at http://fmcs.gov/assets/files/Public%20Affairs/2005%20Documents/FMCS_Activities_-Main-_Final_color.pdf