Pentagon Wants to Scrap Waiting Period for Hiring Retired Servicemen

A tight labor market and 180-day wait makes it harder to staff up key defense contractors

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Military commanders say that economic growth and regulations aimed at preventing corruption in defense contracting are hindering their ability to recruit STEM professionals.

Air Force Lt. Gen. Lee Levy says a growing economy and tight labor market may have helped drive up wages for Americans, but it has also made recruitment for civilian contractors more competitive. The Pentagon has a natural pool of talent in outgoing service members, particularly naval and aerospace engineers, but their access to recruiting these men and women has been complicated by a 180-day waiting period for military retirees looking to enter the civilian workforce. He said many former service members would opt for more accessible jobs rather than wait four months to work in naval depots.

The waiting period is designed to prevent the appearance of impropriety in handing out lucrative contracts, but military leaders say it comes at too high of a cost. The Pentagon has attempted to alleviate the pressure by granting expedited hiring authority for select positions in September 2017, meaning only a limited set of the military workforce can be hired immediately upon retirement.

"I can direct hire the quarterback on my team today, but I can't direct hire the other members of the team," Levy told the House Armed Services committee on Thursday. "I need all the team in order to be successful."

Rep. Rob Bishop (R., Utah) acknowledged that a nationwide shortage of STEM workers and a high employment rate has made aerospace industry workers more difficult to find. He asked Levy to identify alternative options for hiring more talented workers.

"We need to change the conversation about STEM education in the United States," Levy said. "Otherwise, we're just managing the shortages. Until the nation produces enough STEM graduates, we're going to continue to have this problem. This isn't just a defense issue, this is an economics issue."

Civilian workers make up 80 percent of the workforce at naval depots, but these workers are beginning to approach retirement age, posing new demographic challenges for military leaders. In May 2017, the Pentagon's annual Industrial Capabilities Report found that only 39 percent of the military workforce was under 45 years of age. Rep. Mike Gallagher (R., Wisc.) said, "the greatest challenge that could harm domestic capabilities is the demographics of the workforce."

Levy said a national-level conversation about the value of work would be necessary to determine the future of the military workforce. He said the military would have to develop a strategy to incentivize young college graduates to work for defense companies.

"These values that we have in our portfolios are exquisite and very rare," Levy said. "They're essential to the national defense."

Other Readiness Subcommittee members wanted to know how the Navy planned to adapt to modern advances in technology. Rep. Ro Khanna (D., Calif.), whose district is home to tech companies such as Apple and Google, asked Levy what he can do with "the young tech folks to attract them into public service."

Levy said the retention rate among software engineers was higher than the average industry worker because their skills could make an immediate impact at naval depots. The advanced nature of the projects has become a key recruitment strategy. He said a local depot had just hired a Georgia Tech graduate who began working on night-vision targeting systems for AC-130 gunships within two weeks on the job.

"You can tell your friends and family, ‘I went to work today and I made a difference,'" Levy said. "‘I didn't make the salary that my friend over at this other commercial firm made, but I made a difference.'"