<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:24712.wais]
NSPS: THE NEW DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL SYSTEM--REACHING
READINESS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE FEDERAL WORKFORCE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
APRIL 12, 2005
__________
Serial No. 109-88
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada BRIAN HIGGINS, New York
KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of
LYNN A. WESTMORELAND, Georgia Columbia
PATRICK T. McHENRY, North Carolina ------
CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont
VIRGINIA FOXX, North Carolina (Independent)
------ ------
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on the Federal Workforce and Agency Organization
JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia MAJOR R. OWENS, New York
DARRELL E. ISSA, California ELEANOR HOLMES NORTON, District of
KENNY MARCHANT, Texas Columbia
PATRICK T. McHENRY, North Carolina ELIJAH E. CUMMINGS, Maryland
------ ------ CHRIS VAN HOLLEN, Maryland
Ex Officio
HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Chris Barkley, Professional Staff Member
Reid Voss, Clerk/Legislative Assistant
Mark Stephenson, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on April 12, 2005................................... 1
Statement of:
Abell, Charles S., Principal Deputy Under Secretary,
Personnel and Readiness, Department of Defense; George
Nesterczuk, Senior Policy Advisor on the Department of
Defense, U.S. Office of Personnel Management; and Neil A.G.
McPhie, chairman, U.S. Merit Systems Protection Board...... 51
Abell, Charles S......................................... 51
McPhie, Neil A.G......................................... 80
Nesterczuk, George....................................... 70
Heiser, Karen, organizational development program manager,
Federal Managers Association; John Gage, national
president, American Federation of Government Employees; and
Ron Ault, president, Metal Trades Department............... 94
Ault, Ron................................................ 153
Gage, John............................................... 117
Heiser, Karen............................................ 94
Walker, David M., Comptroller General of the United States,
U.S. Government Accountability Office...................... 6
Letters, statements, etc., submitted for the record by:
Abell, Charles S., Principal Deputy Under Secretary,
Personnel and Readiness, Department of Defense, prepared
statement of............................................... 53
Ault, Ron, president, Metal Trades Department, prepared
statement of............................................... 156
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, prepared statement of................... 4
Gage, John, national president, American Federation of
Government Employees, prepared statement of................ 120
Heiser, Karen, organizational development program manager,
Federal Managers Association............................... 97
McPhie, Neil A.G., chairman, U.S. Merit Systems Protection
Board, prepared statement of............................... 82
Nesterczuk, George, Senior Policy Advisor on the Department
of Defense, U.S. Office of Personnel Management, prepared
statement of............................................... 72
Walker, David M., Comptroller General of the United States,
U.S. Government Accountability Office, prepared statement
of......................................................... 9
NSPS: THE NEW DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL SYSTEM--REACHING
READINESS
----------
TUESDAY, APRIL 12, 2005
House of Representatives,
Subcommittee on Federal Workforce and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:03 p.m., in
room 2154, Rayburn House Office Building, Hon. Jon C. Porter
(chairman of the subcommittee) presiding.
Present: Representatives Porter, Davis of Illinois, Norton,
and Van Hollen.
Staff present: Ron Martinson, staff director; B. Chad
Bungard, deputy staff director/chief counsel; Chris Barkley and
Shannon Meade, professional staff members; Reid Voss,
legislative assistant/clerk; Patrick Jennnings, detail from OPM
serving as senior counsel; Mark Stephenson and Tania Shand,
minority professional staff members; and Teresa Coufal,
minority assistant clerk.
Mr. Porter. Welcome, everyone. Thank you for joining me
today. The hearing will come to order. The Subcommittee on the
Federal Workforce and Agency Organization is having a hearing
entitled, ``NSPS: The New Department of Defense Civilian
Personnel System--Reaching Readiness.''
But I thought that for the benefit of those who have
traveled for some distance to be here that I would start the
meeting. As I said in my opening a moment ago, welcome. Thank
you for being here.
Today's testimony focuses on another significant milestone
in the transformation of the Federal work force. On February
14, 2005, the Department of Defense and the Office of Personnel
Management issued proposed regulations for the new National
Security Personnel System at the Department of Defense. The
NSPS will be the second major new personnel system for Federal
employees; the other being the DHS personnel system.
According to the Department of Defense, when the NSPS is
fully implemented, approximately 700,000 civilian DOD employees
will be eligible for coverage under the new system. When the
new NSPS and the new DHS human resources system are fully
implemented, over half of the Federal Government will be under
the pay for performance and other aspects of the new systems.
As I pointed out in our previous hearing on the DHS system,
the new human resource systems at DOD and DHS are the first
major reforms to our Civil Service process in 50 years. It is
critical that we get this right. And it took many months of
hard work by the DOD, the OPM and the DOD labor organizations
to create the proposed regulations for the NSPS, and there are
still a lot of details to be worked out, which is why we are
here today.
We are charged with implementing a large-scale change and
having to deal with a number of personnel and cultural issues.
DOD faces nothing short of a major task. This is our chance to
use the oversight power of the subcommittee to highlight the
aspects of the regulation efforts that represent steps in the
right direction and aspects that raise concern or need
additional work.
As I have said before, change can be difficult, and I know
that this is a nerve-wracking experience for the Department's
work force. However, I can assure everyone here that this
subcommittee will closely monitor the progress of DOD and OPM
toward a publication of final reglations and implementation of
this new system over the next several years. I am confident
that if the NSPS is implemented in a fair, credible, and
transparent manner, DOD employees will thrive. Under this new
system--again, DOD employees will thrive under the new system.
I would like to express my thanks to the witnesses who have
agreed to join us today. We have brought together a broad and
knowledgeable array of voices as we continue our oversight of
the new system and look forward to hearing all of your
perspectives, if not today, then in the future.
I would now like to recognize the ranking member of the
subcommittee, Mr. Danny Davis. Welcome, and we now have a
quorum.
Mr. Davis. Thank you very much, Mr. Chairman, and I want to
thank you for calling this hearing. I also want to thank the
witnesses for agreeing to appear and for coming.
At the Deparment of Homeland Security's hearing our
subcommittee held last month, I said that DHS's personnel
regulations and implemented directives were not fair, credible,
or transparent.
Today the Defense Department offers us the same kind of
changes to its personnel system. The difference between DHS and
the Defense Department is that DOD already has shown us that
they have no intention of being fair, credible, or transparent.
There is a saying that actions speak louder than words. And of
course, my mother used to tell us that ``What you do speaks so
loudly until I can't hear what you are saying.''
DOD's actions have given us a good idea of what to expect
when NSPS is implemented. I will give you two examples of
actions that demonstrate what we can expect from DOD. First,
early last year, DOD released a proposal for its new labor
relations systems to congressional staff. House and Senate
Democrats expressed concerns about the proposal in the February
25, 2004 letter to Secretary Rumsfeld. The letter stated that
the National Defense Authorization Act of 2003 specifically
stated three things. One, that DOD could not waive Chapter 71
of Title 5 of the U.S. Code which sets forth the right of
employees to join unions; that the new personnel system must be
prescribed jointly with the Director of the Office of Personnel
Management; and that DOD must provide for an independent third-
party review of agency decisions.
House and Senate Democrats were not the only congressional
members who expressed concern. So did many Republicans. Their
concern was so great that DOD was compelled to go back to the
drawing board and to start the proposal process all over again.
Yet DOD presents us with more of the same kind of draft
regulations and implementation directives that were the source
of initial concerns. Chapter 71 of Title 5 continues to be
replaced with provisions that essentially gut collective
bargaining on most matters that are important to Federal
employees. Instead of jointly prescribing and implementing the
proposed regulations, OPM has been reduced to reviewing and
commenting on DOD regulations that may have governmentwide
implications.
Finally, instead of an independent third-party review of
agency decisions, DOD continues to propose a new Defense Labor
Relations Board that would be located within the DOD and whose
members would be selected solely by the Secretary.
The second example of DOD's it's-our-way-or-the-highway
attitude has to do with the administration's much-touted and
well-publicized call for performance-based pay. If we have
heard nothing else from the administration, we have heard that
Federal employees should be compensated based on their
individual performance and that managers should have the
flexibility to award their best performances with bonuses and
higher salaries. Concerns about patriotism and politicization
of the process were dismissed.
Earlier this year the pay-for-performance debate raged on.
It came to light that DOD gave political and noncareer
employees higher pay raises than career employees. These were
across-the-board pay raises for political appointees, and they
were not based on merit or on individual performance. The irony
of DOD's actions is that these political appointees are
responsible for our national security, but they are not held to
the same standards to which rank-and-file Federal employees are
held.
The second example demonstrates the kind of unfairness that
makes me concerned that the regulations do not state that
employee performance expectations must be in writing. These
expectations will determine whether or not an employee receives
a pay raise, but not one word of these expectations must be put
in writing. DOD has shown us that they have no intention of
being fair or credible. DOD's intentions, however, are
transparent to anyone paying attention.
It is no surprise to me that the Comptroller General will
testify that he has three primary concerns about the proposed
regulations. These concerns have to do with the fact that the
proposed regulations lack adequate safeguards to ensure
fairness and to guard against abuse. Do not specify that
employee expectations should be communicated to employees in
writing and do not specify a process to involve employees in
the planning and development of the new system.
Mr. Chairman, I share these concerns, and based on DOD's
actions, the members of this subcommittee and Congress should
share them as well. I look forward to the testimony of our
witnesses, and, again, thank you very much for calling the
hearing.
[The prepared statement of Hon. Danny K. Davis follows:]
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Mr. Porter. Thank you. I would like to ask unanimous
consent that all Members have 5 legislative days to submit
written statements and questions for the hearing record. Any
answers to written questions provided by the witnesses will
also be included in the record. Without objection, so ordered.
Also ask unanimous consent that all exhibits, documents,
and other materials referred to by the Members and their
witnesses may be included in the hearing record and that all
Members be permitted to revise and extend their remarks.
Without objection, so ordered.
It is also the practice of this committee to administer the
oath to all witnesses. If you could all please stand, those
that will be testifying, and I will administer the oath.
[Witnesses sworn.]
Mr. Porter. Let the record reflect that all witnesses have
answered in the affirmative. Please be seated. Thank you.
On our first panel today, we will hear from Mr. David
Walker, the U.S. Comptroller General for the Government
Accountability Office. Mr. Walker, it is a pleasure. I know
that you have a number of other testimonies you have to make in
the next few days, so we appreciate you being a part of our
hearing once again. So if you would please--you have 5 minutes.
STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL OF THE UNITED
STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Walker. Thank you, Mr. Chairman and Ranking Member
Davis. It is a pleasure to be back before you. I would ask your
consent that my entire statement be included in the record so I
can move to summarize it now, if you can, Mr. Chairman.
Mr. Porter. Yes.
Mr. Walker. Thank you very much.
Mr. Walker. It feels like deja vu all over again, because
it wasn't that long ago that I was here before this
subcommittee testifying about the Department of Homeland
Security's proposed regulations; and obviously they are both
matters of significant importance, not only with regard to the
departments and agencies involved, and their employees, but
also with regard to our overall effort to try to modernize our
human capital policies and practices in the Federal Government.
As I did at that hearing, I would respectfully request
that--just provide you a few examples of positives, areas of
concerns and the issues going forward. My testimony has many
more that has now been provided as a part of the record.
As you both know, the National Security Personnel System
did not get off to a good start on Capitol Hill and, frankly,
didn't get off to a good start initially within the Department
of Defense.
As you probably recall, the Defense Department came up to
Congress 1 day before a recess. I had a very thick bill, with
no business case and very little justification. The Congress
held a number of hearings, including this full committee, and
made a number of improvements to that bill that I think
represented the progress.
The Defense Department, after that legislation was enacted,
initially stated its intention to move quickly to maximize this
new flexibility as quickly as possible. I am pleased to say
that since Gordon England has been involved as Secretary
Rumsfeld's point person on this project, I have noticed a
significant change; namely, the commitment to so-called
``spiral development,'' to a more phased approach, and the
commitment toward more consultation and communication with
regard to this important initiative. And I think that's
important. But as Mr. Davis said, you know, it's important that
continue, and actions do speak louder than words.
I would give one positive comment, one area of concern and
one important point as we move forward.
First, the overall conceptual framework with regard to
regulations has considerable merit because it proposes to move
to a more modern, flexible, and market-based and performance-
oriented classification compensation system. So the conceptual
framework clearly has merit.
However, with regard to the areas of concern, the details
do matter very greatly, and there are very many important
details that have yet to be defined.
For example, how will performance expectations be set and
how will that be documented? How will the new pay for
performance-based compensation system actually be designed and
implemented? Furthermore, how will the appeals processes
actually work, and what will be the rights and the limitations
to those rights, and will they have adequate independence not
only to be effective but also credible in the eyes of the
affected parties?
These details very much do matter, and I think it makes it
critically important that the meet-and-confer period which is
about to be undertaken be engaged in by both parties on a--in a
constructive manner and using a good-faith approach, because
it's pretty clear that these new authorities are going to be
implemented. But it's very important that both parties come to
the table in a good faith manner and with a constructive
approach to try to make the best out of these regulations and
to fill in some of these details, because I am a strong
believer, Mr. Chairman and Mr. Davis, that there clearly is a
need for additional flexibility in this area. But there must be
adequate safeguards to provide reasonable assurance and
consistency and to prevent abuse when that flexibility is
granted.
The last point that I would make on going forward is it's
critically important that there be adequate systems and
safeguards in place before any additional pay-for-performance
or other major flexibilities are implemented. It's very, very
important that they be in place; and that means, among other
things, a modern, effective, credible, and hopefully validated
performance appraisal system that results in meaningful
distinctions of performance and, furthermore, that there be
adequate internal safeguards as well as external safeguards,
and that there be an appropriate degree of transparency with
regard to the degree of results of any related decisions.
Transparency is a powerful force, and I think that it can play
an important role here.
I think it's important that we get this right, rather than
getting it fast. On the other hand, I think we need to move as
soon as prudently possible to make these reforms, because it's
going to take a number of years to effectively do what all
needs to be done to roll this out departmentwide.
We at GAO will continue to do our best to lead by example
and to share our considerable experience and expertise in this
area. As you know, we went to broad-banding in 1989. We went to
pay for performance in 1989, and we have continued to try to
improve to modernize that over the years, and we think that
some of our both process and policy approaches may have
conceptual merit for consideration by both the Department of
Defense as well as Department of Homeland Security.
And last, but certainly not least, as both of you know, the
Department of Defense has 14 of 25 high-risk areas on GAO's
latest high-risk list. It is critically important that DOD
place additional time, attention, and focus on the much-needed
business transformation effort. And this National Security
Personnel System is a critical element of that overall
transformation effort.
And we believe and continue to believe, as I will testify
over the next couple of days before the Armed Services
Committee, that the Department of Defense needs a chief
management official, a Chief Operating Officer, if you will,
the person at the right level within the Department, a level 2,
reporting to the Secretary, who is dedicated full time to
addressing the many business transformation challenges,
including NSPS; because, in the past, the track record is not
very good and, quite frankly, the stakes are way too high, both
from the standpoint of money and people, not to do this right.
Thank you.
[The prepared statement of Mr. Walker follows:]
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Mr. Porter. Thank you, Mr. Walker. I appreciate you
mentioning those three key areas that I know that my friend and
colleague from Illinois pointed out in his opening statement.
And I expect you will probably have some more questions with
regard to those, and I will wait for some of those questions.
But I have had an opportunity, since we last had a hearing
and since we chatted, to look at some of the information that
you provided regarding the Deputy Secretary of Defense for
Management, and I know you touched upon it in your closing
comments. Even beyond today's hearing, I look forward to
looking closer at that. I think it's critical in some shape or
form that a person of this capacity become a part of the
process. My concern is that at what point does that happen, and
what would be optimum as we are looking at, you know, the pay-
for-performance change; first change, as I said, in 50 years.
At what point should we be spending more time on that
Deputy Secretary of Defense? Should that be parallel to what we
are doing today?
Mr. Walker. Well, I have mixed emotions about this, Mr.
Chairman, because on the one hand the President, as you know,
has announced his intention to nominate Gordon England, who is
the individual I referred to before, as Deputy Secretary of
Defense. And let me say for the record that in my own actions
with Secretary England, I believe he is a first-rate
professional, and I believe that's an excellent nomination.
At the same point in time, I also believe that the existing
Deputy Secretary job is a full-time job, and that there is--
continues to be a need for a Deputy Secretary for Management,
this chief management official if you will, to focus on the
business transformation. I doubt that there's a human being on
the planet that can basically deal with both of those jobs.
Each of them are full-time jobs. The stakes are too high for us
not to get NSPS right. The stakes are too high for us not to
make, you know, progress with regard to the other major
business transformation challenges within the Department of
Defense, such as financial management, information technology,
supply chain management, etc. And I think it's going to take
somebody like this chief management official at the right level
for--enough time with a proven track record of success in order
to be successful.
Mr. Porter. Yes.
Mr. Walker. So now is what I would say, Mr. Chairman.
Mr. Porter. Now is the time.
How would you envision this position being different from
the newly created Chief Human Capital Officer?
Mr. Walker. My view is that the new Chief Human Capital
Officer would report to this position, that a number of key
players who are involved in the business side of the Department
of Defense which should inherently not be political. I mean,
there might be political appointees, but you need to make sure
that you have the right type of business infrastructure in
place no matter who the President is, no matter who the
Secretary of Defense is, and no matter which party controls the
White House or Capitol Hill.
And so my view is that the Chief Human Capital Officer
would report to this person and would work in partnership with
this person as well as other key players, not just the under
secretaries, but also the service secretaries and other key
players in the Department in order to take a more strategic, a
more integrated, and a more, you know, departmentwide approach
to this and other key initiatives within the Pentagon.
Mr. Porter. Do you think that CHCO, or the Chief Human
Capital Officer, is going to have the tools and the ability to
manage the change to NSPS?
Mr. Walker. I think first we have to recognize that, you
know, that modernizing your human capital policies and
practices is absolutely key to the overall transformation
effort within the Department, and that while the Chief Human
Capital Officer will play a critically important role, this is
so important to the mission of the Department of Defense that
even the Secretary of Defense needs to allocate some time to
this effort.
And the communications strategy, while it might end up, you
know, involving the Deputy Secretary or Deputy Secretary of
Management as playing a key role along with the CHCO, you have
to involve a number of different line and functional heads, as
well as the Secretary, in this effort.
I mean, you know, the stakes here are key, not just for the
Department of Defense, but also for our overall Civil Service
reform effort. I mean, we are dealing with a huge part of the
Federal work force, and it's really critically important that
we get this right.
Mr. Porter. I had an opportunity to meet with some of the
managers yesterday and had kind of a question-and-answer
session. I think I touched upon it at our last hearing. I know
there are a lot of folks that are concerned. And now we are
talking close to 600,000, 700,000 people in DOD and certainly
those in Homeland Security.
But I want to reiterate what you mention in your summary,
that we have to have these safeguards in place to prevent
abuse. We have to. It's our responsibility, and it's critical
that it be highlighted in your report.
Also the process for continuing involvement by the
employees, I think that, again as you pointed out in your
report, it's an area of weakness.
And as my colleague said from Illinois, we have to make
sure that some of these things are done in writing so that
people understand.
I know this isn't a question, it's more of a comment. In my
short tenure as chairman, I am learning that in many
departments, agencies, I question who is in charge. And I think
the system has allowed itself to evolve into a lot of this, a
lot of finger-pointing. And at least I believe in the watch of
this subcommittee, we don't want to create more finger-
pointing; we want to have somebody in charge so they are held
accountable, so that they can respond to these employees that
need help, to those managers that want to train and make sure
there is ample training material.
Again not a question, more a comment. I appreciate what you
have had to say today.
Mr. Walker. If I can followup real quickly on that. With
regard to the overall business transformation effort within the
Department of Defense, of which NSPS is a subset, a very
important subset but only in a piece, the answer is nobody is
in charge. That's the honest answer right now at the
Department. I am talking about the overall business
transformation process.
And you talk about concerns. It is very understandable that
there would be broad-based and serious concerns about the type
of changes that are being proposed here. Quite frankly, there
were broad-based and serious concerns when these same type of
changes were proposed at the GAO. I mean, these are fundamental
philosophical changes. But just because they are complex, just
because they are controversial, just because they are a
concern, doesn't mean that we shouldn't proceed. We must
proceed. But how do we proceed? You know, what basis we
proceed, and to make sure that it is based upon a constructive
and interactive approach that we have these actual--these
principles and safeguards in place, and that we have reasonable
transparency; that's critically important. But we must proceed.
But how we do it matters.
Mr. Porter. Thank you. Mr. Davis.
Mr. Davis of Illinois. Thank you, Mr. Chairman.
Mr. Walker, let me thank you. As always, I look forward to
your insight into your testimony, and I agree with you totally
that the conceptual framework, I think, is excellent. I also
agree with your assessment of Mr. England.
But I think that some of these things have to be codified
in such a way that it doesn't matter, to some degree, who the
individuals might be relative to the implementation, but that
the codification is there. You have consistently testified that
human resource systems must be transparent and credible. I
mean--and I have certainly appreciated that position.
And you have also indicated that you believe that employees
must have confidence in the system if you are going to have the
kind of work force, the kind of morale, and the kind of
productivity that you are expecting.
Would you say that verbal communications could be good
enough to create that kind of environment and those kinds of
confidences in the employees?
Mr. Walker. Well, verbal communications need to occur, and
they should occur on a frequent basis throughout the year, but
I believe that you have to have some written expectations.
And part of that has to do with seriously considering a
competency-based approach as a means to move forward with
regard to any new performance appraisal system.
I know that we at GAO adopted that, and I know others have
followed a similar approach, including most recently the
Defense Intelligence Agency, which ended up adopting a number
of our competencies. And what we found is a competency-based
approach is a way that can help to set expectations and help to
assure a reasonable degree of consistency, you know, not only
within units but also across units in a given department.
So I think you need to have written expectations, but that
should be supplemented with frequent oral communications.
Mr. Davis of Illinois. And you indicated, so--to answer
another question that I sort of had in mind--and so that you
would suggest that DOD look seriously at some of the policies
and practices that your agency has established and been making
use of and encourage them to follow suit or to certainly look
at what you have done more as a model than what they have
perhaps recommended?
Mr. Walker. Well, Mr. Davis, we are not perfect, and we
never will be. Nobody is. I think that, you know, we have had a
considerable amount of experience here, both as it relates to
the policy framework as well as it relates to the process that
should be employed to try to get to a positive outcome.
And in fairness, the DOD and DHS are talking with our
people, and they are trying to be informed by that. And I hope
that when they end up engaging in the meet-and-confer process,
and I hope that when they end up filling in a number of the
important details, some of which I mentioned, some of which you
mentioned, some of which the chairman mentioned, I hope that in
doing that, it will be informed in part by what they learn from
us and others, because there are a number of important details
that have to be filled out.
And if I can come back to your comment about institutional
versus individual, that's a critically important point. The
fact of the matter is we are talking about doing something here
that will span beyond any individual and beyond any
administration.
And just as I think it's important that we keep that
concept in mind for the National Security Personnel System, I
also think it's important that we keep that concept in mind
with regard to the chief management official, because we need
to institutionalize that as well, because we don't know who the
next set of players might be.
Mr. Davis of Illinois. Can you think of anything that
agencies would have to fear by doing that? I am saying
sometimes, you know, people see demons and things if they open
them up a bit. Can you think of anything that they would have
to fear from employees?
Mr. Walker. Well, obviously anytime you provide more
discretion, people are concerned about how that discretion is
going to be used, and want to make sure that discretion is not
going to be abused.
There is little doubt in my mind that the DOD and that--you
know, in this particular case, are wanting to get reasonable
flexibility, but they are not wanting to abuse employees. It
would be totally counterproductive to do that. But in order to
be able to heighten the degree of confidence that that won't be
done, it just reinforces the needs for the safeguards. It
reinforces the needs for more specificity. It reinforces the
need for, you know, more written documentation and adequate
checks and balances; that that not be based upon a promise but
it actually be written and codified, if you will.
Look, no matter what the final rules are, there will be a
significant percentage of the work force that will remain
concerned. And part of that is because we are moving from a
system whereby, under current law, 85 percent-plus of all pay
increases have nothing to do with skills, knowledge, and
performance. It's on autopilot. And we are moving from a system
where, even if you perform at an unacceptable level--where we
don't have that many people who do--but even if they perform at
an unacceptable level, they are entitled by law to that 85
percent of the annual increase. And so that by itself is going
to cause a great degree of concern.
But as I said, that doesn't mean we shouldn't move forward.
Mr. Davis of Illinois. Thank you very much. And I think I
have some of that 85 percent who work for me who--and we want
to change it.
Mr. Porter. I don't think I will comment on that, Mr.
Davis. We will leave that for you.
Mr. Walker, on page 20--and you don't need to turn to page
20, but it has to do with resources for implementing the new
system and training and helping change this culture--you said
85 percent has nothing to do with performance.
Could you spend a little more time this afternoon talking
about the training aspect and where you see the strengths and
weaknesses are of the plan regarding the training, making sure
the managers are trained and employees are trained so they can
understand how they can achieve these higher levels of
performance?
Mr. Walker. Well, first, we haven't done an in-depth study
of their training plan. Frankly, I don't know that they have an
in-depth training plan for us to study yet. I will say this:
that based upon our own experience, which I know best, it takes
a considerable amount of time and it takes a considerable
amount of resources to be able to not only help explain what
you are doing and why you are doing it, but how to do it.
Again, they have to come up with a modern, effective,
credible, and hopefully validated performance appraisal system;
that, after you do that, you have to train not just the
managers who will rate employees, but also the reviewers who
will review the ratings, and also the employees who will be
rated based upon these standards, and also the other key
players who will have some role to play with regard to the
checks and balances.
We spent a considerable amount of time and money after we
ended up designing the system and training all those different
key players in what their role was and what we were trying to
accomplish out of this system and what type of, you know,
safeguards and means that we had in place to try to achieve all
of our objectives.
My understanding is, just through a note that's been passed
to me by one of our very capable staff, is that the plan hasn't
been developed yet, which doesn't surprise me, because it's
hard to develop the plan when you don't have the system yet,
you know. But no doubt it's--you know, the Department
contemplates that there will be extensive, you know, training
efforts.
Mr. Porter. And with your assistance as this unfolds, I
would like to put a microscope under that so we watch as that
unfolds, so that there is proper training and the funding of
that training. But I would appreciate your assistance in that
area.
Mr. Porter. Another question. You know, when I go back to
the district, I am asked frequently about homeland security,
international security, because its still in the hearts and
minds of individuals as they are going to work every day; they
go to the airport, and there's extra security.
How do you see the NSPS fulfilling the mission of DOD; and
that's, of course, the security of the Nation and of the world?
Is, in fact, this system being put in place going to make our
Nation a safer place to live and to work and to raise our
families?
Mr. Walker. I think it can if it is designed and
implemented properly. Let me tell you why I say that. Because
any agency, company, or not-for-profit entity is only as good
as the people who comprise it. And I think it's important to
recognize that we do need to move to more modern or flexible,
more market-based and performance-oriented human capital
systems. That's critically important. We need to do a better
job of linking the strategic plan and the desired outcomes of
the Department of Defense with the measures of success for the
different units that make up the Department of Defense and the
individuals who contribute to the mission of the Department of
Defense.
And I think that to the extent that we can link those and
integrate those and move to a more modern set of human capital
policies and practices where we are making more decisions based
upon skills, knowledge, and performance, then there's no doubt
in my mind that we will end up resulting in more positive
outcomes that will enhance value and will mitigate risk. That
has clearly been the case at GAO, and I think it can be the
case in many departments and agencies. But it's, as has been
said, not just what you do but how you do it that matters.
Mr. Porter. Thank you. Mr. Davis.
Mr. Davis of Illinois. Just actually one question, though.
I was thinking, when I was a kid growing up, my mother and I
used to have a lot of serious conversations about her
assessment of my performance. And I remember her telling me one
time that I hadn't done much. And I asked her, how much is
much?
And that leads me to the question of how much detail. How
detailed do we need to have things in order to create this
transparent environment that we are talking about? And I know
it's difficult to assess and measure what sometimes you can't
see before you see it, but how much detail is necessary?
Mr. Walker. What I would say, Mr. Davis, is I have found
that a competency-based approach, where you end up working in
partnership with employees to define the competencies that are
necessary for them to be successful and maximize their
potential in various roles and responsibilities; so you work in
partnership with the employees to define those competencies,
and then you have the employees validate what has been come up
with such that A, you get better buy-in with regard to that
and, frankly, you mitigate litigation risk as well by doing it
that way.
If you do that, and then you couple that with fairly
clearly defined, you know, performance standards--in other
words, here is what we want you to do and here is what we
define as meets expectations, and here is how we define as
``outstanding,'' ``role model,'' call it what you want. That if
you do that, you have a very, very solid framework for moving
forward. And then some of those competencies might end up
involving competencies like achieving results.
Then, as a supplement to doing this, you must then define
what do you mean by that? What do the results mean from the
standpoint of the unit involved, the individual involved? You
know, we do that at GAO, and the definition of results will
vary, based upon the department, based upon the unit, based
upon the individual, as to how can they contribute to overall
organizational results.
But the competencies and the performance standards provide
the foundation that can be supplemented with additional
information where there would be a degree of transparency
associated as well. But the level of detail, obviously, would
vary based upon the individual facts and circumstances.
Mr. Davis of Illinois. Thank you very much.
Mr. Walker. Thank you.
Mr. Davis of Illinois. I really appreciate your testimony.
Mr. Porter. I just have one additional question, and it's
come up a couple of times. It has to do with the Labor
Relations Board. The question is whether or not having three
members appointed by the Secretary of Defense really provides
an independent review. Do you feel that the Department can
establish an independent committee to review the employee
problems?
Mr. Walker. I think if they are all going to be appointed
by the Secretary of Defense, there has to be a process for
determining who the candidates are from which the Secretary
will select. There has to be a participatory process there
where you are providing reasonable assurance that there's going
to be some degree of balance on that Board, where employees
and/or their representatives have input to that process. I also
think it's important to have term appointments and very
stringent standards for removal once the person is appointed.
We have at the GAO something called the Personnel Appeals
Board. That is something that was established late in the
1980's to provide credible, reliable, independent and external
review body for our employees. In the interest of full and fair
disclosure since day one, the Comptroller General has appointed
the members of that board.
However, how we go about it is very important. We do have a
consultative process. We do try to achieve balance. There are
fixed terms, and people cannot be removed, you know, once they
have been appointed. In fact, I can't remove them. They can
only remove themselves, their colleagues can remove them, if
they are--if there is a dereliction of duty or some other
aspect.
So I think, you know, it's possible for it to work if you
address the issues that I talked about. But I don't think they
have been adequately addressed yet.
Mr. Porter. Thank you. Again, we appreciate you being here
and providing your insights, we look forward to continued
communications on these topics. We appreciate it.
Mr. Walker. Thanks. I will stay for a little while, but I
won't be able to stay for the whole time.
Mr. Porter. I understand. Thank you. Thank you.
I would now like to invite our second panel of witnesses to
please come forward to the table.
I will first have opening statements by the Honorable
Charles S. Abell, Principal Under Secretary of Defense,
Personnel and Readiness. Following Mr. Abell will be Mr. George
Nesterczuk, the Senior Policy Advisor on the Department of
Defense, U.S. Office of Personnel Management. And finally we
will hear from the Honorable Neil McPhie, the chairman of the
U.S. Merit Systems Protection Board.
I would like to begin today by recognizing Mr. Abell. Mr.
Abell, thank you very much, and you will have 5 minutes.
STATEMENTS OF CHARLES S. ABELL, PRINCIPAL DEPUTY UNDER
SECRETARY, PERSONNEL AND READINESS, DEPARTMENT OF DEFENSE;
GEORGE NESTERCZUK, SENIOR POLICY ADVISOR ON THE DEPARTMENT OF
DEFENSE, U.S. OFFICE OF PERSONNEL MANAGEMENT; AND NEIL A.G.
McPHIE, CHAIRMAN, U.S. MERIT SYSTEMS PROTECTION BOARD
STATEMENT OF CHARLES S. ABELL
Mr. Abell. I thank you, Mr. Chairman and Mr. Davis.
The National Personnel System is a key part of DOD
transformation. We will create a total force, uniformed
military and civilian employees who share a common vision, who
recognize common strategic and organizational objectives, and
who operate as one cohesive unit. DOD civilians are unique in
government in that they are an integral part of an organization
that has a military mission, a national security mission.
DOD civilians are at work side by side with our uniformed
military personnel around the world in every time zone, every
day. NSPS will bring 21st century human resource management to
these dedicated public servants.
NSPS has been designed to meet a number of essential
requirements. Our guiding principles as we designed them were
mission first, respect the individual, protect rights
guaranteed by law, value talent, performance and leadership,
and commitment to public service. Be flexible, understandable,
credible, responsive, and executable, and to balance the HR
system interoperability unique with the mission requirements
and to be competitive and cost-effective. We have key
performance parameters and implement these guiding principles
with measurable metrics.
NSPS was enacted on November 24, 2003. Since January 2004,
we have been engaged in a process to design the HR appeals and
labor relations system in an open, collaborative environment in
consultation with our employees, the unions and other interest
groups.
Since January 2004, we have met face to face with
employees, unions, and interest groups in many settings, as
well as maintained two-way communications via written
correspondence, cover stations, and exchanges of documents.
Based on feedback from the unions and congressional committees,
in March 2004 the Department adjusted the process, established
different governance and enhanced our partnership with OPM.
The proposed regulations published in the Federal Register
on February 14 reflect the result of this adjusted process. The
Federal Register notice is the formal notice required by the
statute, followed by the 30-day comment period, after which we
reviewed the comments, and beginning on April 18th, will meet
in a meet-and-confer process for a minimum of 30 days.
Mr. Chairman, I stress the word ``minimum.'' We will devote
the time necessary to adequately discuss and confer on every
issue raised during the comment period, and this is where the
details that so many long for will begin to emerge. We have
asked the Federal Mediation and Conciliation Service to assist
us in this meet-and-confer process. And at the conclusion of
the meet-and-confer period we will report the results to our
congressional oversight committees.
I suspect that we will spend some time today talking about
what NSPS does. But let me take a minute to talk about what
NSPS does not do. It does not change the merit system
principles that are the foundation of the Civil Service system.
It does not change prohibited personnel practice rules. It does
not change whistle-blower protections nor antidiscrimination
laws. It does not modify nor diminish veterans preference. It
does not change employee benefits, such as health care, life
insurance, retirement, and so forth. It does reserve due
process for employees, and it does not reduce opportunities for
training and professional development.
On the other hand, Mr. Chairman, the National Security
Personnel System will provide a streamlined, more responsive
hiring process, simplified pay-banding structure, and will
allow us flexibility in assigning work, performance-based
management, that is linked to strategic and organizational
goals, and includes accountability at all levels. It will give
us--allow us pay increase based on performance rather than on
longevity; efficient, faster features for adjusting performance
and disciplinary issues while protecting due process rights,
and a labor relations system that recognizes our national
security mission while preserving collective bargaining rights
of the employees.
Although we plan to implement the labor relations system
DOD-wide, we intend to phase in the HR system beginning in late
summer of this year, as we expect full implementation by late
2007 or perhaps early into 2008. We recognize that the National
Security Personnel System is a significant change, but these
are necessary changes.
We will meet the challenge of change and change management
willingly. We are committed to training employees, managers,
and supervisors. We are committed to the collaborative approach
that we have used to get to this point. We understand the
concern and the anxiety of our employees. It would be unnatural
if they were not concerned or anxious, and we will address
their concerns.
NSPS is the right system, based on the right philosophy, at
the right time in our history. The Department, in partnership
with the Office of Personnel Management, the unions, interest
groups, and our employees, will implement it with efficiency,
effectiveness, transparency, and sensitivity.
Mr. Chairman, before I close, I would like to recognize the
great contributions of my partner, Mr. George Nesterczuk, Dr.
Ron Sanders of OPM, and Ms. Mary Lacy of our personnel--of our
program executive office. They have been invaluable to getting
us to where they are, and they are going to be part of the team
that takes us all the way home.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Abell follows:]
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Mr. Porter. Thank you very much.
George, that was quite an opening right there from Mr.
Abell. Maybe I don't need to say much more. He said great
things about you.
STATEMENT OF GEORGE NESTERCZUK
Mr. Nesterczuk. I will see if I can reciprocate toward the
end of my testimony as well. He has been a great partner.
Thank you, Mr. Chairman, for holding this hearing and for
giving us the opportunity to clarify a number of issues
surrounding the NSPS. I have provided a longer statement for
the record. I would just like to, orally, briefly summarize
some of the key points.
It's my privilege to represent the Office of Personnel
Management today to discuss the proposed implementation of the
NSPS. The proposed regulations will establish a new human
resources management system that we believe is as flexible,
contemporary, and responsive as the President and the Congress
originally envisioned. The regulations are still in a proposed
stage. We still have much left to do. Right now we are
assessing the thousands of comments that came in during the
public comment period, and we are about to enter into the meet-
and-confer process with DOD's unions, during which we expect to
get into a great deal of detail concerning the regulations.
Subsequently, we expect a great deal of additional work in
the continued collaboration with the unions over implementing
issuances within the Department. We have stipulated a
continuing collaboration process in the regulations and expect
to refine it during the meet-and-confer period beginning next
week.
As to the content of the regulations, I think we will
probably get into details during the question-and-answer
period, but I would like to summarize a few key points. On pay
and performance, we took a very employee-oriented approach. We
are proposing a simplified classification system that will
actually enhance career growth for employees. We are
simplifying the pay structure using broad pay bands that will
allow greater employee growth within each band, and we are
making clearer distinctions on entry into supervisory and
managerial tracts.
On staffing flexibilities, we believe that the regulations
will better support the Department in matching its work force
to its mission requirements. There are provisions for expedited
hiring and targeted recruitment. Performance-based retention is
built into the system with less organizational disruption
whenever they need to be enforced. We have also guaranteed full
veterans preference as veterans enjoy today in the work force.
On due process of accountability, we have assured due
process safeguards for employees, while balancing the greater
deference to DOD's mission requirements that the current
system--where the current system has been lacking.
Finally, in the labor relations arena, we are proposing a
system that provides the Department with more predictability
and greater uniformity in the issuance of internal management
directives.
Let me conclude with the following, Mr. Chairman. If DOD is
to be held accountable for national security, it must have the
authority and flexibility essential to that mission. That's why
Congress gave the Department and OPM the authority to waive and
modify the laws governing staffing, classification, pay,
performance management, labor relations, adverse actions and
appeals, a broad array of flexibilities.
In developing the proposed regulations, we believe that we
have succeeded in striking a better balance between union and
employee interests, on the one hand, and the Department's
mission imperatives on the other. At the same time, we made
sure the core principles of the Civil Service were preserved.
Mr. Chairman, that concludes my statement. Thanks for the
opportunity to appear before the subcommittee, and I will be
pleased to respond to any questions you might have.
Mr. Porter. Thank you, anything nice you might want to say
about Charles while you are here?
Mr. Nesterczuk. He has been terrific, a very understanding
fellow. Thank you.
[The prepared statement of Mr. Nesterczuk follows:]
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Mr. Porter. Mr. McPhie.
STATEMENT OF NEIL A.G. McPHIE
Mr. McPhie. I was hoping he would say something nice about
me, but----
Mr. Porter. There is still time.
Mr. McPhie. Chairman Porter and Ranking Member Davis and
Member Van Hollen, My name is Neil McPhie, and I have the honor
of serving as chairman of the U.S. Merit Systems Protection
Board.
Thank you for the opportunity to appear before you and
participate in this hearing on the proposed Department of
Defense National Security Personnel System [NSPS]. First, I
want to congratulate DOD and OPM, the designers of the NSPS,
for proposing an appeals process that guarantees due process to
public employees.
MSPB's formal statutory role in design process is to
consult DOD and OPM to assist those agencies in ensuring that
all employees are afforded the protections of due process. The
Board consulted with DOD and OPM to develop the regulations to
implement the NSPS.
Members of my staff participated in working groups and
attended numerous meetings throughout this process. Some of
that staff is present here today. The proposed regulations
reflect some of the suggestions generated from the
collaborative process. For example, I appreciate DOD's and
OPM's recognition of the need for carefully defined mandatory
removal offenses.
As an independent adjudicatory agency, MSPB is not in a
position to judge among the various personnel systems that
policymakers may devise. Rather, MSPB's role is to adjudicate
employee appeals pursuant to the system applicable to a
particular department or agency.
MSPB is pleased that the DOD has chosen to retain MSPB's
adjudicatory services. I believe that MSPB's participation is
critical to establishing the credibility of the process. The
DOD appeals system envisions MSPB's involvement at two stages.
An employee has a right to appeal an adverse action to an MSPB
administrative judge. After DOD finalizes the administrative
judge's decision, either taking no action or by modifying it
within the prescribed period, the employee has the statutory
right to petition the full board for review.
MSPB has a distinguished history of providing fair
proceedings and sensible decisions. The full Board at MSPB and
administrative judges will bring integrity and objectivity to
the NSPS employee appeals process and will continue MSPB's
tradition of providing fair proceedings and objective
decisions. I am confident that the Board will provide the same
high quality of services for which it has become known.
The compressed timeframes in the proposed system will
create a more efficient appeals system, but may pose a
challenge to current Board resources as it strives to reduce
its processing time for all board cases.
However, several provisions of the proposed regulations may
prove especially helpful in reducing the amount of time it
takes to adjudicate DOD cases. For example, the provision
grants the Board to issue a summary judgment when there are no
material facts in dispute, will facilitate the expedited
adjudication of DOD appeals.
The Board understands the challenges it faces and has
already begun to examine ways to reduce case processing times.
That study is not complete, but indications are that case
processing times can be significantly reduced by streamlining
processes, instituting technological innovations, implementing
more efficient management practices and securing additional
resources.
My goal as head as the MSPB is to treat all cases equally.
That is why the Board has requested additional funds as part of
its budget request for fiscal year 2006, to enable the Board to
hire more staff and provide appropriate training and enhance
technology. These additional resources will facilitate the
Board's efforts to adjudicate DOD and DHS employee appeals
within the required timeframes, while continuing to provide
efficient and timely adjudicatory services to other client
agencies.
In conclusion, I'm optimistic of the future of the Federal
Civil Service. The service is poised to undergo a significant
transformation that may culminate in far-reaching changes in
how the government operates. I believe that in the end, the
Federal Civil Service will be a more attractive place to work.
The Board recognizes that its role in safeguarding Civil
Service protections is an important component in the current
transformation of human resource management practices
governmentwide. The implementation of the NSPS will be a
significant early step in this process.
We look forward to continued opportunities for consultation
with our colleagues at DOD and OPM as they move toward final
regulations and ultimately to implement the NSPS.
That ends my oral statement. And I will be happy to take
any questions you may have.
Mr. Porter. Thank you very much.
[The prepared statement of Mr. McPhie follows:]
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Mr. Porter. I would now like to open up our Q and A period.
I would like to ask my friends at DOD and OPM, Mr. Walker has
discussed for a number of years, but specifically today, about
the creation of a Deputy Secretary of Defense for Management.
What do you think about that idea?
Mr. Abell. Mr. Chairman, I think that over the history of
the Department, the role that the Secretary of Defense has laid
out for the Deputy Secretary of Defense has varied. Many times,
the Deputy Secretary of Defense is the Chief Operating Officer.
Other times, he's been--another role has been defined for him.
I think the organization and management of the Department of
Defense should be one that fits the style and the talents of
the Secretary of Defense.
So I would urge that you and your colleagues engage the
Secretary of Defense on this question and see how he would do
that or what he would suggest to you. I would note that a
bifurcation of the chain of command is almost always a bad
thing. So if the Department of Defense was split and some
things going to one Deputy Secretary and some things going to
another, I would suspect that we would end up with gaps and
seams, but that is just my personal view on that one.
Mr. Porter. I think there are gaps and seams the way it is.
And I appreciate your comments and I understand in your
capacity, as you should be, of being selective in your
comments, but it's something I want to spend some time on and
look forward to continued discussions on that subject.
Mr. Nesterczuk.
Mr. Nesterczuk. We don't really have an institutional
position on that, and so I would rather not speak for OPM. That
really is an issue for the Executive Office of the President
together with the Secretary of Defense to sort out.
I can comment personally on it, having been an observer on
these matters for loath 25, 30 years, that I tend to share
Charlie's view on that; that bifurcation really doesn't serve
the Department or any department well. We tend to integrate
both policy and resource responsibilities in the second, third,
and fourth-level chains of command. All managers are
responsible for integrating their resource requirements with
their policy consideration and evaluate it as such. That kind
of dynamic decisionmaking, as it works its way up the chain, I
think serves the organization as a whole the best.
Mr. Porter. Back to, I guess, a question I had earlier, and
that is regarding some of the concerns from employees and
management and funding of that training and making sure they
understand the new culture and the direction. What assurances
can we give to your employees that, in fact, the managers will
be trained to manage, and employees will then understand the
processes, and whether it's in writing or verbal? What
assurances do we have that you are going to be able to take
this work force and modify it into a pay for performance?
Mr. Abell. First of all, Mr. Chairman, it's not in our
ethos or not in our interest to fail, so we want to succeed,
and training is the key to success. It's also one of the things
that the Department does well every day. For NSPS in
particular, we have developed several training courses, core
training courses essentially. They will be administered in a
decentralized way by the services and defense agencies.
Managers and supervisors will get a minimum of 18 hours of
training; employees, a minimum of 13 hours of training; HR
practitioners, up to 40 hours of training; and senior leaders,
senior supervisors, a minimum of 6.
We have a lot of experience with our alternative personnel
systems and various demonstration projects. We are developing
now an evaluation system to ensure that the training took, so
it will be standards-based as opposed to hours-based. Merely
completing the program doesn't necessarily get you a go. Before
anyone has their pay subject to a performance Board, we will
have mock payouts, where the employees and the managers and the
supervisors will get to practice this all at once in a
transparent way so we can see where the competencies are and
get that credibility, if you will, but also tell us where we
need additional training resources. We are going to track the
training in our automated system so we know who has been
trained and who has not. And we plan to have a readiness
checklist. Before NSPS is deployed to an organization, the
organization must have met the standards on a checklist. We
think we have a good program. We won't put an organization into
NSPS until they are ready.
Mr. Porter. Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Mr. Secretary, let me ask you, DHS has contracted with
Northrop Grumman to write the details to implement its new
personnel system. Will the details of DOD's system be crafted
by agency, human resources management staff, or do you see that
being contracted or outsourced out?
Mr. Abell. Sir, we don't plan to contract the creation of
those regulations out. Again, we have extensive experience. We
are using working groups which are not just HR practitioners
but also employees and supervisors to assist us as we do that.
Mr. Davis of Illinois. Chairman McPhie, you heard the
discussion with Mr. Walker relative to more detailed
expectations. Would that help you and your colleagues when it's
time for you to do a review on appeal? Would that help you to
be in a better position, you think, to make the best decisions?
Mr. McPhie. Well, let me answer it this way, Mr. Davis. I
have practiced law myself, and it seems to me I have always
gotten better outcomes when I had objective pieces of evidence
in the record. I can't speak for every MSPB judge, but I assume
a judge wants to have a fully explicated record.
The thing I would urge, though, this is a brand-new system.
You know, lots of things have to be worked out, even at the
level of MSPB in hearing a specific case. I believe MSPB judges
are going to try to get into the record or urge the parties to
provide the record with all the documentation so that the judge
may render a fair and good decision.
Mr. Davis of Illinois. Sounds to me--and I'm not a lawyer--
that you're saying that the clearer the evidence or the
expectations, the more comfortable one can be that the
decisions they arrive at are rendered based upon evidence that
two people looking at would see the same way, as opposed to one
person looking at the glass and perhaps saying, that glass is
half empty and another person saying it's half filled?
Mr. McPhie. Documentary evidence is documentary evidence.
Oral evidence is different, and there you go to credibility of
people and so on. Additional documents won't help you. But it
seems to me as I sit here and think of it, if you're going to
have de novo review, that is, review based on the record
developed below, I believe it's very important to have a fully
developed record below, so that the Board, when it reviews it,
ultimately the Federal circuit court when it reviews it, would
have a full record before it so it can render, I believe, an
objective, usable decision.
Mr. Davis of Illinois. Thank you very much. And I think
people who kind of follow the way I think about some of these
situations know that I kind of feel that OPM plays a junior
partner role in some of these deliberations as opposed to being
an equal partner. And I'm looking at the general provisions
section 9901-105 in coordination with OPM, and it says that the
OPM Director will be provided an opportunity as part of DOD's
normal coordination process to review and comment on
recommendations and officially concur or not concur with all or
part of them. The Secretary of Defense will take the Director's
comments and concurrence or nonconcurrence into account and
advise the Director of his determination with reasonable
advanced notice of its effective date. Thereafter, the
Secretary and the Director may take such action or actions as
they deem appropriate consistent with their respective
statutory authorities and responsibilities.
This section does not read as though the Secretary and
Director are equal partners. Is there any recourse, Mr.
Secretary, Mr. Nesterczuk, for OPM--I mean when there's
disagreement--let's say you can't arrive at an agreement, what
happens? Who prevails in this kind of situation?
Mr. Abell. The process you described--and they are in the
proposed regulations--is not different than the processes that
are in place today, in that two officers who are appointed by
and report to the President have their conversations through
their staffs, make their points. And should they ultimately not
agree, the disagreement is adjudicated in the Executive Office
of the President. That's what that says.
The practical effect of all that is that very few
disagreements would ever reach the Secretary and Director level
of adjudication. Folks like George and I, or Dr. Sanders and
Mary Lacy, will work those out. But if there is something so
fundamental to the core responsibilities of either and it does
reach that level, it will be adjudicated in the Executive
Office of the President, not unlike a disagreement between
Treasury and Commerce.
Mr. Nesterczuk. Let me comment on that, Mr. Davis, if I
may. The language you specifically cited addresses an issue
that goes way beyond the enabling regs, way beyond implementing
issuances into practical day-to-day decisions where we have
reserved basically some role for OPM. In issuing enabling
regulations, we are full partners. There's no question of that
in the enabling regulations that we're discussing, which
require both signatures of the Director of OPM and the
Secretary of Defense. And following that with more detail in
implementing issuances, we will be working with the Department
in implementing those issuances.
Once they are in effect, we have reserved for OPM an
additional consultative role, and how that consultative role
plays out is the language you specifically read.
We don't anticipate collisions in those areas very often.
These will be practical issues of setting pay levels based on
surveys, pay surveys, market conditions, and things of that
sort or when it comes time to implementing hiring authorities,
specific details on that, we would be consulting with DOD
before they issue those. But we listed the specific instances
where those provisions would kick in, and those are in the
regulations as well.
Mr. Davis of Illinois. The National Defense Authorization
Act specifically states ``jointly prescribe,'' but I certainly
appreciate the practicality of the Executive Office sort of
adjudicating any disputes.
Thank you very much.
Mr. Porter. Mr. Van Hollen.
Mr. Van Hollen. Thank you, Mr. Chairman. And thank you,
gentlemen, for your testimony.
I just wanted to followup on a couple of issues that have
been raised, especially the testimony by Mr. Walker. I was not
able to be present when he delivered the testimony, but I have
been reviewing the testimony. And much of the concerns he
raised there have been raised in earlier hearings with respect
to regulations and Department of Homeland Security as they
relate to pay for performance. And pay for performance is
something I think everyone agrees with in concept. We want to
reward employees who perform better. And certainly employees
who are not up to par should not be rewarded. The key is coming
up with a system that does that in a fair, predictable manner,
one that the employees have faith and confidence in, one that
is not going to be used for political purposes or one that is
not going to be there to reward the pet of the manager.
And the devil is in the details and the details are
absolutely critical in this area. This committee reviewed the
pay-for-performance plans that were put in place by GAO some
time ago and decided that based on the way they phased it in in
a predictable manner in the oversight and the ability for
employees to have input into that process and know the
standards which they were being asked to perform, that is
something we can move forward with.
In reviewing the regulations with respect to the Department
of Defense, there are a couple of issues that have been raised
here. First was the issue of defining the details of
implementation of the system. Now, as I understand your
testimony, Mr. Secretary, you agree that needs to be spelled
out and you are going to be sure that before this is actually
fully implemented in any particular agency, that you're going
to flush out the details; is that correct?
Mr. Abell. Yes, sir. We will flush out details during the
meet-and-confer process which begins on April 18. At the end of
that process, I think the detail that many have asked for will
be apparent. But we will also make sure that we have moved from
regulation to execution by--through training, and we will have
a mock payout.
I agree with you, it is essential to the system that good
performance be rewarded, that bad performance be incentivized
to turn to good performance, that the system is credible and
has the trust of the employees. I agree with you on all those
points.
Mr. Van Hollen. With respect to predictability and the
expectations we are going to measure against, one of the other
issues raised in Mr. Walker's testimony is that while the
regulations allow the core competencies to be spelled out in
writing, it doesn't require it. And I ask you, would you object
to them requiring they be spelled out?
Mr. Abell. Sir, it's my expectation, we will flush this out
during meet and confer, but my expectation is that written
performance standards will be part of the final regulations,
but it is something that we are anxious to talk to our union
counterparts in the meet-and-confer process.
Mr. Van Hollen. Finally, the issue of making sure there is
a formal or an established process for continuous input from
employees, that is going to be I hope part of your proposal
going forward; is that right?
Mr. Abell. I would go beyond that. The continuing and
informal process will go both ways. We need supervisors to
counsel and mentor their employees. We need employees to be
able to express their views to their supervisors and perhaps
make suggestions as to how their performance should be judged.
It goes both ways; and that is continuous, I agree.
Mr. Van Hollen. I know this committee will continue to work
with you in this area. If things get off on the wrong track, it
becomes very difficult to regain the confidence and faith of
employees.
Mr. McPhie, if I could ask you, because we had an earlier
hearing on the Department of Homeland Security's regulations;
and, as I recall, your testimony at that time was more critical
of their proposals going forward than your testimony seemed
today of the Department of Defense's provisions regarding
employee ability to appeal. What are the differences here? Are
there some differences here that you are concerned of? Could
you elaborate on the differences?
Mr. McPhie. I don't think they were more critical or less
critical. I think what got buried was the statements that good
things will happen in the DHS system.
The criticism that I made and continue to make here, if you
want to call it that, I think it's more of a reality check. The
MSPB is going to have to overcome some challenges to maintain
its part of the bargain. Now, clearly, that brings into
question some of the things I testified at the DHS hearing and
now. Resources is an issue I stressed then and I made the point
here again. The compressed timeframes are going to have--they
require great efficiencies in the system. And the point I tried
to make there, perhaps I will make a little bit more clearer
here, is that MSPB is critical in ensuring credibility. That's
what I think a lot of people are alluding to at this hearing.
You know, most DHS and DOD require a more efficient system.
There's no question about that. And to get those efficiencies
will require MSPB to change the way it does business. That's a
challenge. And we are trying to solve that challenge as we
speak. We are looking at different ways to do business
differently so that we not only do DHS or DOD cases promptly,
but we do everybody else's case promptly. The last time I was a
little bit more detailed about two tracks and so on. That's not
the goal. The goal is one case-processing system.
Mr. Van Hollen. Thank you, Mr. Chairman. I don't have other
testimony, but this is a much shorter set of testimony than
before. And my sense is that there are not that many
differences between the two proposals. And you in your previous
testimony were critical of the standard of review and some
other things as well. There is one thing in the DOD regulations
that actually is less protective of employee appeal rights as I
read this than in the Department of Homeland Security, and this
is raised not in your testimony but in the GAO testimony. And I
was just surprised that I didn't hear you mention it, which I
understand is in contrast to DHS's final regulations. These
proposed regulations permit an internal DOD review of the
initial decisions issued by MSPB adjudicating officials. And
under this internal review, DOD can modify or reverse an
initial decision or remand the matter back to the adjudicating
official for further consideration.
Doesn't that significantly undercut the existing power and
independence of the Merit Systems Protection Board? And there
are no regulations at all that offer additional details on the
Department's initial review process; how they are going to
handle that. What is your response to that?
Mr. McPhie. That point is covered in my written testimony
and my oral comments here today. I noted that. But this review
body, somebody who is not satisfied--either party who is not
satisfied with what the review body does, as I note, has the
right to appeal that decision to the full Board. And why is
that important? Because any review beyond that to the circuit
court has to be from a final Board decision. That's how the
NSPS is drafted.
Mr. Van Hollen. I look forward to continuing to discuss
this issue. It's not clear in the regulations as to how that
process would unfold.
Mr. Porter. Congresswoman Norton.
Ms. Norton. Thank you, Mr. Chairman. I apologize. I have
been detained in an important meeting, but I wanted to come by.
And I have listened to the questioning thus far and asked staff
about the clarification--I heard some clarification on pay for
performance.
And I want to issue a warning that I think any lawyer in
the room will agree with me will be the case. Pay for
performance is something that I certainly prefer. In my office,
some people get bonuses at the end of the year and some people
get higher bonuses than other people. We can do that in the
Congress. So, you might wonder, why didn't the Congress go to
this sooner? And let me tell you why, so everybody understands
what you're walking straight into. Why are they stuck with this
system which seems so uniform? My friends, it's because of
State action and due process. Unlike other employers, a State
employer is bound by the Constitution to offer due process.
That's very different from if you work for a private employer.
What does that mean here? You are radically moving to a
different system where the Federal Government has not protected
itself as the present system does against State action
lawsuits. If you get dismissed from the Federal Government, how
you get promoted, very different from how you do it at GM. And
my friends, in case you think it's because Uncle Sam is the
fairest employer, you know, or in case you think it's because
the unions made him do it, let's understand that we're talking
about an employer that is bound by the 14th amendment and all
that implies about due process.
OK. Then let us move to a pay-for-performance system where,
at least so far, the employer must convey somehow or other--we
have to assume because we have seen nothing in writing or
orally--what the expectations are. The first time that this
system goes into place large scale, and there are differences
in how people are paid and evaluated without written
expectations beforehand, you will not be able to count the
lawsuits. And there will not be any distinction between so-
called conservative judges and liberal judges. It will be a
straight-out whether there has been due process to deprive
somebody of pay he might otherwise have received because that
person has not met expectations which have not been
communicated to him in writing.
So I don't care what you think about it. Understand you are
moving to a system that is the way it is because the Federal
Government recognizes the great difference between it and any
private employer, that State action is involved every time it
handles an employment matter with an employee.
Now, if you want to move radically from that, fine. But
don't think you are going to be able to move off of due process
14th amendment requirements. And my friend, you are not going
to be able to differentiate who gets what pay when you are
hauled into court without pulling out a piece of paper saying,
``I told them what the expectations were.'' And you will be
called into court. You are still the United States of America.
You are still subject to the due process clause of the 14th
amendment. You will be hauled into court. You have to be able
to say, she didn't do this, that, or the other, and she did.
And that's why she got more pay than she got. And if you say,
look, I told her so, you're out of court right there.
So whatever you think of our view here about the fairness
of telling somebody in advance in writing what you expect
before you evaluate them and either give them a certain amount
of pay or don't, regardless of whether you are for that or not,
understand that it is not for you to decide. That has been
decided for you by the Constitution of the United States. We
can argue about how much you have to do, but this much is
clear. Oral communication--unless you got a tape recorder there
so that the employer can take it down and have a copy--on its
face does not meet due process requirements if pay is to be
based on what you have, ``told the employee.''
I want to leave that with you, Mr. Chairman, quite apart
from what we ought to do. I think there is a serious problem of
possible litigation unless we get some greater clarity on
written evaluations. I speak not only from a matter of
fairness, but constitutional fairness. Thank you very much.
Mr. Porter. I would like to have the witnesses respond to a
few of your thoughts. I think it is a good opportunity.
Ms. Norton. Anybody with a bar card want to disagree with
what I just said?
Mr. McPhie. Maybe it's only fair--I touched on it early on,
not in as much detail, but due process, the fundamentals of due
process is notice of what you are being accused of and an
opportunity to defend yourself in a meaningful fashion. I
believe, as I said early on, this process guarantees that, and
therefore it guarantees the due process that's expected in the
Constitution, which is minimum due process. Beyond that, I
can't comment.
Ms. Norton. Can you clarify what the notice is here?
Mr. McPhie. Right now, employees are told what they are
being accused of.
Ms. Norton. You think any court--first of all, you are not
accused of anything. You didn't get the same pay as anybody
else.
Mr. McPhie. Accused of or being disciplined for, somebody
crafts an order and hands it to the employee consistent with
prevailing judicial precedent that's required. There's no
question that it is required; it is. And there is no question
that the Federal Government follows it; it does. And at some
point in time, the employee is entitled to a hearing and
whatnot in this process.
The hearing is initially going to be in front of an MSPB
judge with appeal, with an in-between step to an internal
review body, and then an appeal upstream to the full MSPB
Board. And if you follow the life of a case beyond the Board,
there is always review by the Federal circuit court. So you
know, except for some details, there's not much difference,
say, between this process and some other due process--some
other due process processes.
Ms. Norton. I understand the notice. You have the notice
that you aren't going to get your pay. I'm talking about the
notice as to what the expectations were that resulted in your
not getting your pay. And I say if you cannot point to that
notice, you have violated due process and it's a slam-dunk loss
to the government.
Mr. Nesterczuk. Let me address some of the comments that
you made, Ms. Norton. I can't imagine Federal work force not
having written performance standards. The question is, how
many, how much, how frequently are they updated? If you're
dealing with a problem employee, you would be insane as a
supervisor or manager not to document every instance of poor
performance; otherwise you won't meet the standards that Mr.
McPhie has just been speaking about.
However, you cannot impose that kind of evidentiary
standard on every employee in the work force. Thank goodness,
the overwhelming majority perform very well. We even have
outstanding performers. They don't need a great deal of
documentation. So the notion is to find the right amount of
documentation for the right circumstances.
And I believe there's no question that under NSPS as we
have been practicing today, the standard for poor performers or
difficult performers or problem employees is going to be a
great deal of paperwork to document the problems. But in the
case of outstanding performers, that requirement will tail off
rapidly. When you are dealing with good employees, quite
frequently, they know better than you do the details and the
day-to-day requirements of their job. So it's a matter of
communicating back and forth on a regular basis. And as you
assign tasks to be completed, that there is a feedback
mechanism provided so the employees know where they stand.
But in the case of difficult employees, there's no
question, Mrs. Norton, that the requirement to document and
document thoroughly will still be there.
Ms. Norton. You know, I'm inclined to say that I know that
it isn't true; that you all just don't get it, because you keep
answering another question. I never raised the question about
poor performers. I know what to do. I ran a Federal agency. I
had to clean out a whole lot of poor performers. I know how to
keep records. I'm talking about the following--and I agree with
you it has to be at a level so that we're not completely
drowned in paperwork. But I'm saying that if you come to work
for me as a legislative assistant in my office, you get in my
office a written notion of what it is that a legislative
assistant does. Now, that has to be broken down, obviously, to
individual jobs, but those jobs cover a whole lot of folks. So
I really don't think this is onerous. You are not going to pay
for performance for poor employees. You're not going to pay for
performance for outstanding employees. You are going to pay for
performance for everybody. You have never done it before.
I am telling you what I believe as a lawyer who continues
to be a lawyer, if I may, so I continue to teach at Georgetown
and teach a course over there every year. I believe that there
is a terrible problem if you don't defend yourself by making
sure that these employees have a written expectation, not down
to you, Mary, what I would like you to do is this; John, what I
would like you to do is that; but what are the expectations for
this job, so when that person comes up for the pay period, you
can say you have met the expectations less than somebody else
and that is why you are getting less pay than somebody else.
All I'm saying is the best defense is an offense. The
offense here is to have written expectations for job categories
so that everybody understands up front what is expected of her
and cannot be on your back when she gets less than she would
like.
Mr. Nesterczuk. I agree with you.
Mr. Porter. Mr. Abell.
Mr. Abell. I agree with my colleague from OPM. As we go
through the meet-and-confer process, we will flush out the
details in this area. And it is my expectation that there will
be written performance standards for all employees and then the
degree of the detail, as you've said and Mr. Nesterczuk has
said, is something that we'll have to work out.
I will take exception to one thing you said. In fact, the
Department of Defense does do pay for performance today in our
demonstration projects and in our alternative personnel
systems, quite successfully, we believe. We have not faced the
lawsuits and the recriminations you have described. So we
intend to use those lessons as we move forward in the rest of
the Department.
Ms. Norton. I won't bother to ask him what those
circumstances are, but I do want to warn you, how many
employees do you have at the Department of Defense?
Mr. Abell. About 600,000 or so.
Ms. Norton. And I could find out a great deal more, if we
had more time, about what that involves, the level that
involves, how that particular section was chosen to be the
demonstration. But my problem is this: We are talking about the
Department of Defense and 600,000 Federal employees, and you
better not forget it. And I don't see why anybody--your best
lawyers would say to you, certainly if you were in the private
sector, protect yourself against litigation. This is a fairly
easy way to do it.
Mr. Porter. Thank you, gentlemen. We appreciate your
testimony.
I would like to invite our third panel of witnesses to come
forward today. First we will hear from Karen Heiser,
organizational development program manager at the Federal
Managers Association; Mr. John Gage, national president at the
American Federation of Government Employees; and, finally, we
will hear from Mr. Ron Ault, President of the Metal Trades
Department.
Like the previous panels, I would like to recognize each of
you for your opening statements and please summarize your
statements in approximately 5 minutes.
I would like to recognize Ms. Heiser. You are recognized
for 5 minutes.
STATEMENTS OF KAREN HEISER, ORGANIZATIONAL DEVELOPMENT PROGRAM
MANAGER, FEDERAL MANAGERS ASSOCIATION; JOHN GAGE, NATIONAL
PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; AND RON
AULT, PRESIDENT, METAL TRADES DEPARTMENT
STATEMENT OF KAREN HEISER
Ms. Heiser. Chairman Porter and Congressman Davis, thank
you all. As a member of the Federal Managers Association, thank
you for allowing me this opportunity to express our views on
the proposed regulations for the new DOD National Security
Personnel System.
Our mission at FMA is simple. We promote excellence in
public service by creating an efficient and effective Federal
Government. We are grateful to be here and look forward to
continuing this important dialog.
I currently manage organizational development programs at
Watervliet Arsenal, just outside Albany, NY. I have an MBA in
human resources and several years of private sector experience
as an HR manager in manufacturing and health care. However, the
bulk of my experience has been with the Federal Government in
labor relations and quality programs.
As you are aware, managers and supervisors are in a unique
position under these proposed regulations. They will be
responsible for implementation of the Department's new
personnel system and also subjected to its requirements. As
such, managers and supervisors are pivotal to ensuring the
success of the new system.
We at FMA recognize that change does not happen overnight
and we remain cautiously optimistic that the new system may
help bring together the mission and the goals of the Department
with on-the-ground functions of the defense work force. Two of
the most important components to successfully implementing the
new system are training and funding. Managers and employees
need to see leadership from the Secretary on down that supports
a collaborative training program and budget proposals that make
room to do so. We also need consistent oversight and
appropriation of proper funding levels from Congress to ensure
that both employees and managers receive sufficient training in
order to do their jobs most effectively.
There are two primary areas in which we see the need for
performance management training. Operations training is
required in order for managers to understand the nuts and bolts
of the new system, their responsibilities and authorities, and
the rights and responsibilities of their employees and their
supervisors.
Of equal or more importance is the training required to
enable managers at all levels to understand how to translate
organizational goals into performance standards. The process
begins with an organization understanding its goals and
objectives and making them clear to members of their
organization. Goals and objectives are transmitted down through
the organization, translated into executable plans and then to
performance elements and standards of employees on the ground
floor.
Theoretically, since organizational goals are the result of
a desire to meet customer requirements, this is how performance
management directly links employee's success to organizational
success. Our consistent message is this: As managers and
supervisors, we cannot do this alone. Collaboration between
manager and employee must be encouraged to debunk myths and
create the performance and results-oriented culture that is so
desired by the proposed regulations.
As any Federal employee knows, the first item cut when
budgets are cut is training. It is crucial this not happen in
the implementation of these regulations. Not to be
underestimated is the effect of more than 10 years of Federal
work force downsizing. During this time, missions have
continued to be accomplished because of dedicated skilled
managers and employees. However, performance management during
this time has taken the form of a survival mode: Do what it
takes, do more with less. It has not been as formal or as
consistent as what is required or envisioned by the NSPS.
Making a change to pay for performance without first
addressing the need to refine these organizational and
management skills in this area will have serious detrimental
consequences. DOD is the largest employer in the Federal
Government. For Civil Service reform to be implemented
throughout government, it must be successful in DOD.
FMA further supports a fair and open labor relations
process that protects the rights of employees and creates a
work environment that allows employees and managers to do their
jobs without fear of retaliation or abuse. The past 10 years
have seen improvements in labor/management partnership across
DOD. At my site, for example, much organizational progress has
been possible because of a strong cooperative relationship of
labor and management with a shared goal of organizational
success.
Let us not lose sight of this type of growth in the pending
implementation. The new system has relegated the authority for
determining collective bargaining rights to the Secretary. In
this regard, the recognition of management organization such as
FMA is a fundamental part of maintaining a collaborative and
congenial work environment.
Title 5 CFR 251, 252 allows FMA, as an example, to come to
the table with DOD leadership and discuss issues that affect
managers and supervisors. While this process is not binding
arbitration, the ability of managers and supervisors to have a
voice in a policy development better enables them to support
accomplishment of DOD's mission and goals and is crucial to the
Department's long-term vitality.
We are cautiously hopeful that the new DOD system will be
dynamic, flexible, and responsive to modern threats and as
positive as its vision. The proposed regulations, however,
remain vague and academic. Current guidance provides the bones
of what we believe to be a workable plan. And while we remain
concerned with some areas at the dawn of the system's rollout,
the willingness of OPM and DOD to reach out to employee
organizations such as FMA is a positive indicator of
collaboration and transparency. We look forward to continuing
to work closely with Department and agency officials.
Thank you for this opportunity to allow our views to be
heard. And I will be happy to answer any questions you may
have.
[The prepared statement of Ms. Heiser follows:]
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Mr. Porter. Next we will have John Gage, national president
of the American Federation of Government Employees.
STATEMENT OF JOHN GAGE
Mr. Gage. Good afternoon. I'm appearing today on behalf of
my union, AFGE, as well as the United DOD Workers' Coalition
which represents 36 unions covering DOD workers all across the
Department.
We have numerous concerns with the draft regulations, but I
want to talk about what I consider the most serious problems.
First, DOD has proposed radically reducing the scope of
collective bargaining. The proposal effectively eliminates
collective bargaining by expanding the manager's rights clause
as compared to current law and rendering most previously
negotiable issues to be off the table. Such issues include
procedures and arrangements for overtime, shift rotation,
flexible and compressed work schedules, safety and health
programs, deployment away from the work site, and on and on. In
addition, DOD will be able to unilaterally override provisions
of collective bargaining agreements simply by sending out
issuances. The scope of bargaining must be restored so that
meaningful participation can continue to exist in DOD.
Proposed regulations do not follow the authorizing legal
mandate to safeguard collective bargaining rights for DOD
employees. When the legislation authorizing NSPS was under
consideration in 2003, Secretary Rumsfeld assured the Congress
that his only intent with regard to collective bargaining was
to establish national level bargaining over most issues. We can
live with that and we can make that work, but we can't live
with the NSPS draft because it reduces the scope of bargaining
to virtually nothing, far beyond any real or imagined national
security concern.
Second, the Board that hears labor management disputes
arising from NSPS must be independent of DOD management. In the
proposed regulations, DOD would establish an internal Board
made up entirely of individuals appointed by the Secretary.
This Board will be paid by and beholden to DOD management. It
would have no independence or credibility with the work force.
Secretary Rumsfeld promised the Congress, prior to the
enactment of the law authorizing the establishment of NSPS,
that any Board established to hear labor/management disputes
would be independent. There is no reason for DOD to have an
internal labor board which duplicates the functions and costs
of the Federal labor relations authority, but if it must exist
as a safeguard, it is absolutely critical that it be entirely
separate and distinct from DOD management.
Third, the standard for mitigation and discipline in
adverse action cases under NSPS in the proposed regulations is
virtually impossible to meet and effectively removes the
possibility of mitigation. DOD must change the standard from
``wholly without justification'' to ``unreasonable,'' which is
the court-imposed standard established over 25 years ago in
order for employees to have meaningful due process and
safeguard against arbitrary and capricious actions. DOD must
stop the game-playing with long-established legally recognized
standards.
Further, and in contrast to current law, the proposed NSPS
adds additional bureaucratic delay by declaring that adverse
action in arbitrations will no longer be final and binding.
Instead, they will have to be reviewed by the MSPB, thereby
reducing the authority of arbitrators. This is entirely
insupportable and contrary to congressional intent and weakens
an important safeguard for employees.
Fourth, under the NSPS, employees' performance appraisals
will be the crucial determinant of salary, salary adjustment,
and job security. Yet under the proposed regulations, there is
no requirement for management to propose written standards
against which performance will be measured. And in addition,
employees are denied the right which is now available to all
current Federal employees, including those under the new
homeland security personnel system to use and negotiate a
grievance and arbitration system, to present evidence to an
impartial body as a critical safeguard for fairness and
transparency.
Fifth, the proposed pay regulations open the door for a
general reduction in salaries for all DOD personnel compared to
the rates they would have been paid under current statutory
systems. An ability to reduce entry-level salaries in addition
to an ability to refuse annual adjustment of salaries for those
who perform satisfactorily as permitted in the regulations
will, by definition, conspire to reduce overall DOD salaries.
Strong and unambiguous safeguards must be in place to prevent
overall lowering of pay for the DOD civilian work force. There
must be constraints on the ability of DOD to lower salaries or
withhold salary adjustments across the Board. These safeguards
must be established not only to protect the living standards of
the civilian DOD work force relative to the rest of the Federal
work force, but also to guarantee the ongoing economic vitality
of communities with DOD installations.
Finally, procedures for deciding who would be affected by a
reduction in force must be based on more than a worker's most
recent performance appraisal. Incredibly, the proposed NSPS
regulation would allow an employee with 1 year of service and
an outstanding rating to have superior retention rights to an
employee with 10 years of outstanding appraisals and 1 year of
having been rated nearly above average. Such rules are patently
unfair and must not be allowed to stand.
In conclusion, it cannot be emphasized strongly enough that
the approach DOD has taken thus far, exhibited by the above
examples, has been profoundly demoralizing for its civilian
work force. These dedicated and patriotic Americans are
extremely unsettled by the harsh prospects set forth in the
proposed regulations because they are not fooled by words like
``modern,'' ``flexibility,'' ``market-based.'' They see
fundamental rights stripped away and a pay system rigged to
lower overall DOD pay.
We strongly urge the committee to take action either
legislatively or through oversight to require DOD to correct
the many problems with the regulations and provide the
safeguards I have mentioned. Unless substantial changes are
made to the regulations, the NSPS
will become a recruitment and retention problem rather than a
solution that will deflect the agency from its important
mission in years to come.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Gage follows:]
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Mr. Porter. I would like to recognize Mr. Ron Ault, who is
president of the Metal Trades Department.
STATEMENT OF RON AULT
Mr. Ault. Thank you, Mr. Chairman and members of the
committee. My name is Ron Ault. I'm the president of the Metal
Trades Department at the AFL-CIO. On behalf of the more than
40,000 civilian employees at the Department of Defense
represented by the Metal Trades Department, I thank you for the
opportunity to testify today. I'm also pleased to appear on
behalf of some 700,000 represented by the 36 unions in the
united DOD Workers' Coalition. And I want to say we are here
speaking for the DOD workers.
I've got prepared testimony I would like to enter into the
record, but I want to deviate from it for a couple of seconds,
because I want to put a human face on all this. This is the
public comments CD that was provided to us by the NSPS office,
and I would strongly recommend that every member of the
committee get a copy of this and just look at the comments from
the people in your district. And I won't tell anybody here that
I have looked at all, some 50,000 that's reported on here, but
I've looked at a lot of them; and I would suggest that if you
just go through here and randomly select on any basis that you
would like to select and read these comments, you would
understand the upheaval that's going on and the morale of the
Federal work force that we represent and speak for today.
Particularly, I would say that I've discovered seven so far
in favor of NSPS, and there may be more, but I've only
discovered seven. So that is indicative of the people's opinion
of what's going on with NSPS.
The recent wave of adulation for the late Pope John Paul
II, especially his role in collaboration with his countryman
Lech Walesa in igniting the spark that destroyed the Soviet
communism, is a sharp reminder to all of us, especially those
of us involved in shipyard labor, of the importance of free
trade unions to the fabric of freedom in our Nation. Some may
recall that Mr. Walesa was a mere shipyard electrician before
he became head of the first free Polish state since before
World War II.
I mentioned the Pope and the Polish labor movement as a
reminder to all that anything that comprises right of free
trade unions to represent the aspirations of working families
is an anathema to America. And I strongly suggest that NSPS
represents an eminent threat to that freedom. The workers we
represent are patriotic. Many like myself are veterans of
military service, and we are proud of the work we perform and
the reason we perform it.
One of our affiliated organizations, the International
Brotherhood of Electrical Workers, recently had one of their
members seriously wounded while performing work as a Federal
employee in Iraq. Gary York, the vice president of local union
1688, is a power plant controller working at the Gavins Point
Power Plant in Yankton, SD. He volunteered for Operation
Restore Iraqi Power in October 2003. On Christmas Eve, his
convoy was attacked and he was wounded. Actually was shot in
the head. Lucky for him, the bullet passed through the doorpost
before striking him. He also received a shrapnel wound in the
shoulder, which was a minor injury compared to the head wound.
He spent several weeks in hospitals in Germany and here at
Walter Reed in D.C. He returned to his job around May 2004.
Gary received the Medal of Freedom from the Corps of Engineers
for his service. He was also featured in one of the issues of
the IBEW Journal and one of the Corps publications. Gary just
returned to Iraq for his second tour of duty on April 20, 2005.
Since NSPS was first proposed, I have met with rank-and-
file workers in almost every DOD work location where we hold
recognitions and collective bargaining agreements. On their
behalf, I want to register my most strenuous objection to the
inference and implication that underlies the National Security
Personnel System, that is that we oppose this plan because we
are obstructionists and because it represents a departure from
the status quo.
Ladies and gentlemen, we do not like status quo. We believe
that constructive change in the work site is long overdue. One
of the primary reasons that working people select union
representation is because they want to see change and they
expect us to help them implement it; change that brings about a
more open, objective, atmosphere in the workplace; that enables
working people to perform their jobs effectively without
interference and impediment; change that removes subjective
elements of personality, prejudice, and ambiguity from the
workplace and supplements those elements with clear rules and
standards of evaluation.
In other words, we support high-performing workplaces,
clearly defined performance standards, assignments which are
understandable and achievable. We support individual and
organizational growth, equal opportunity and fair treatment on
the job. We welcome change when it enhances our ability to have
a voice on the job, where it enables us to attain improved
training, improve our safety and health on the job, where it is
accompanied by respect and dignity that our contributions
warrant. We are skeptical of change that is initiated for the
purpose of undermining our freedom of association. We are
dubious about change that is unilaterally initiated for the
purpose of curtailing our potential for wage growth and
personal achievement.
Now, I wanted to stop there and say one of the key points
that I want to emphasize today: that I personally attended
every single meeting of the Department of Defense from the get-
go on NSPS.
I want to stop there and say one of the key points that I
want to emphasize today that I personally attended every single
meeting of the Department of Defense on NSPS. And I will say
this, we have yet to be involved in this process.
The information has been provided to the public and the
other information that has been provided to you and Members of
Congress is not accurate. We have not had any part of forming
any portion of this. It's been a secret, it's like a Stealth
airplane that's been designed by someone working in secret.
You heard the MSPB person testify today about the working
groups. We have asked to be part of the working group's
deliberations, and to be involved in this and we have been
denied this. We have been denied every opportunity to help
implement and form and share this program that is now out here
on the street that has caused all these problems.
So I want you to understand that we are skeptical of what's
going to happen from here forward. Is OPM and DOD just going to
run the clock out on us for 30 days and then implement what
they have written in secret for months and months, or are we
going to have real dialog?
I keep hearing the words from the folks that come up and
testify, but they are not reassuring words to us. And we
represent the people that are the experts in this field. They
are not experts. We do this every day for a living.
Our folks are the people that make it work. I agree with
Comptroller Walker, only the workers can make this thing work.
We have a crew today working on the USS San Francisco. No one
had to make those folks go out there and work together as a
team. If we implement the pay-for-performance element as it is
currently designed, I fear that you are going to destroy all
the teamwork and all the expertise of those folks.
And let me just say this: We are coming up on the
anniversary of the USS Thresher disaster. Our folks make,
repair and operate on those nuclear submarines and all kinds of
weapons systems that we can't really talk about today.
You know, the very first atomic bomb was hoisted out in the
desert in White Sands by a crane operator that was one of our
chief shop stewards during the Manhattan project. We do nothing
but national security. Everything is national security to us.
So it's an insult for our folks to hear the words that they
cannot have the freedom that we are espousing in Iraq because
they are Federal employees, and they are somehow less than
patriotic for having a union in their workplace or for using
that.
All we are asking for is a fair shake. We are asking that
Congress would take control and mandate that the intent of
Congress, as well as the letter of the law, is followed in
NSPS.
Thank you. I will be happy to answer any questions.
[The prepared statement of Mr. Ault follows:]
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Mr. Porter. Thank you, Mr. Ault, we appreciate your
comments today and to all of you for your additional backup
testimony.
I would like to ask the first question, having to do with
the Managers Association. We have heard consistently that
Federal managers are categorized as having the lack of
necessary skills based on this new system that is being
proposed. What kind of training will managers need to be most
successful in his system?
Ms. Heiser. For pay? For performance? For performance
management in general?
Mr. Porter. Yes.
Ms. Heiser. I think that the whole idea of translating
organizational goals to performance standards of an employee is
the general framework of the training that would be required.
What the gentleman was just talking about is right on point,
really that the Federal workers do their jobs.
And I think in the workplace, a lot of times supervisors
come from a technical pool, or rather come to a supervisory
position from a technical level rather than a managerial level,
and work well with employees to manage and get the work done.
But as far as actually leading them and coordinating the
individual work of those people toward a higher goal, I don't
think that's--that's not common to the Federal sector.
And I think that type of a bigger focus is what's primarily
required. And the whole idea of communicating, the whole
concept of written standards versus verbal standards, I hope
that's going to go away. I never understood the idea of having
verbal opposed to rather than written, but they are both moot,
because the point is to communicate standards effectively in
whatever way it takes and it may be a combination.
I think that OPM originally thought that managers were
somehow bound by a performance appraisal that listed a set of
duties and that was the only discussion that took place until
performance appraisal time, and I fear that has really become
the way things are in government. And that's what has to go
away, the idea of having continuous communication with
employees about how they are doing in terms of their
performance.
And it's got to be a bi-way, it has to be a two-way
communication. It has to be--have the supervisor to the
employee in terms of here is what I perceive. It sounds like
basic communication, but I think that's what is missing.
Mr. Porter. Do you think there would be adequate funding.
Ms. Heiser. We took a little survey there this norning, you
weren't there today--we took a little survey to see what level
of confidence our folks had that the money would be there. It
wasn't very high. You know, I don't know.
Mr. Porter. Thank you. Mr. Ault, I know that your
information regarding Mr. York is very germane. And please let
him know he is an American hero, and we appreciate what he is
doing. And having been to Yankton many times, I know exactly
where he works or was working, but give him our best.
And I know that you are quite bashful and your comments are
reserved and subdued, and I say that with a smile, because I
appreciate your candor.
But let's talk for a moment about the labor relations board
that's being proposed. Tell me what you think.
Mr. Ault. As proposed, it leaves a lot to be desired, when
you have an in-house program, we sometimes call these in-house
unions or company unions, where, you know, you are subservient.
There's no equality here. There's no--first of all, it wouldn't
be transparent, it wouldn't be objective, if the Secretary can
appoint and make those kinds of things happen.
Currently, there is some objectivity and there is the
systems of checks and balances of impartial grievance
arbitration out there, where both parties have to, by
preponderance of the proof, are a just cause standard of proof,
have to prove their case that this person is actually guilty or
has done something that would warrant the action.
I don't see any of that going on with the system that is as
proposed.
Now, I have listened to management side of the House saying
we are going to work that out in collaboration. Well, I sure
hope so because we haven't worked anything out up till now. We
have just been meeting for the sake of meeting so that they
could come up to them on the Hill and say, hey, we met with the
unions today.
Mr. Porter. Thank you.
Mr. Davis.
Mr. Davis. Thank you, Mr. Chairman. Ms. Heiser.
Ms. Heiser. Sir.
Mr. Davis. I have been told often that the devil is in the
details, when you look at proposals and movements and changes.
And I heard Mr. Gage and Mr. Ault both delineate, I guess, what
I would call a lot of devils in this proposal. Are there any
that you see that are apparent devils in the proposal?
Ms. Heiser. I think the largest apparent devil is truly the
funding. We did take part of our vote this morning with--we are
having the FMA national convention, so we have all folks in one
place--and asked how confident they and their managers would be
that this money would be there to see the programs, through,
let's say, in the 3 to 7 years that it would take for full
program implementation. And there was not a lot of confidence.
I think that detail is truly the most significant, because
managers cannot sell the potential value of this program to
their employees, nor believe it themselves, unless they have
confidence that the reward, I guess, would be there.
Mr. Davis. Mr. Ault, I was moved by your description of
patriotism as you talked about the gentleman who obviously is
patriotic. And yet we knew that much of this action supposedly
has been driven with an emphasis on national security. And
early on, when the conversations got started, people were
saying, well, we need to look at this especially in DOD because
of national security.
We need to look at it in homeland security because of
national security, and, I mean, there are people like myself
who suggest that it was essentially an opportunity to try and
turn back the clock in many ways, and that is turn back the
clock on the employee rights, turn back the clock on
collaboration, turn back the clock on democracy in the
workplace. I mean, we talk about democracy. And yet it appears
as though, in many instances, we are not willing to practice
what we preach.
How important do you think a sense of democracy is in the
work environment?
Mr. Ault. I think it's critical. The folks we represent are
more than arms and legs. They are the real experts. Whenever
you are going into a nuclear reactor compartment hot, you have
to be able to know that the people that have worked with you
are dependable, I mean, it's the democracy of workplace is just
critical.
We have a unique perspective. We also represent the private
sector that build these ships. So, I mean, we come from a
unique perspective. And when we talk about a contemporary
system and a flexible system, when we set out and negotiate,
for example, with Northrop Grumman ship systems, the first
thing they want in their labor relations is the involvement of
the employees.
They want what DOD is throwing away. They want the
employees to be part of the team. A contemporary labor
relations system today is more about employee involvement and
less about supervision. They want to see more self-directed
work force. They want to see fewer supervisors. They want to
see more people directly involved in production. They want to
see cost savings from employees, ideas being implemented on the
floor without going through a long and tedious process. So, Mr.
Davis, to speak directly to it, it's the answer.
Unfortunately, no one from DOD is asking the question.
Mr. Davis. I would concur with you.
Mr. Gage, it seemed to me that you indicated that
collaboration has been less than democratic, or I guess you get
the impression that you don't feel that there has been
partnership in the evolution and development of the proposed
changes relative to your union and other unions interaction
with DOD. Is that an accurate characterization?
Mr. Gage. That's exactly accurate. We are disappointed
about it. The way we read the authorizing legislation, we were
supposed to be part of the design of this thing. And we have
been shut out completely. We are still, you know, I am looking
at it, you know, we are going to go into this meeting and
confer. And we know what we think we need as safeguards, and I
would really like to hear that word being used so often today.
Because if this system is so good, it should be able to
stand up to scrutiny and have safeguards for employees for that
transparency. So we are going into the meeting and confer, and
we think we have our very good arguments, and we are hoping
that DOD will look at them.
But so far they seem to have their mind made up. It's a
very theoretical approach they are taking rather than the
practical one that Ron is talking about and that our workers
are looking for. So we are trying to get this out of the sky
and out of ideology, maybe, and down to the practical,
practical things that work on the worksite.
Mr. Davis. Well, I have no further questions, Mr. Chairman,
I want to thank all of the witnesses for appearing and for
their participation. And, again, I thank you for holding this
hearing.
Mr. Porter. Thank you, Mr. Davis. That would conclude my
questions also. We appreciate your comments and know that many
Members will be submitting questions later. They have time to
do so, and actually, I do have some questions that we will be
submitting.
But let me say for the record that this committee is going
to be very thoughtful in its deliberation, as we follow the
process of implementation. And I know a number of points were
brought up this morning that have to be addressed and haven't
been, and know that many of the stages of implementation can
take 8 or 9 years, if my understanding is correct. But we want
to make sure that it is done right and that the employees and
managers, those that are directly impacted have a say in this
process.
So we appreciate all of your testimony today and look
forward to following this in the future, and we will adjourn
the meeting. Thank you.
[Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
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