Thank you, Chairman Voinovich. Today's hearing focuses on the regulations for the National Security Personnel System (NSPS) proposed by the Department of Defense (DOD) and the Office of Personnel Management (OPM). I join our Chairman in welcoming our panelists. Given the rocky start that DOD had when first rolling out the NSPS a little more than a year ago, I am pleased that the Department began anew after heeding the concerns that I and other members of Congress expressed, along with those voiced by employees and OPM. Although there is wide disagreement over how successful the process turned out, I very much appreciate the time and effort that has gone into working with employees and their union representatives.
As the ranking member on this subcommittee, as well as the ranking Democrat on the Armed Services Readiness Subcommittee, I am disappointed with the proposed regulations, which I believe significantly strip key rights and protections of employees and raise serious questions of fairness in collective bargaining and employee appeals. The concerns I have today are the concerns I voiced in 2003 when I was one of three Senators who voted against the underlying bill creating the NSPS.
I am not alone in my concerns, and Mr. Chairman, I do not recall a single issue in my 28 years in Congress that has generated more anxiety among federal workers in Hawaii than the NSPS. My state is home to over 16,000 civilian DOD employees, many of whom work at the Pearl Harbor Naval Shipyard. I was particularly moved by one shipyard employee's letter that detailed how union and Metal Trades Council representatives in the Shipyard completed successful negotiations on a number of occasions that resulted in improved efficiency and furthered labor-management relations. His fear of the NSPS was simply stated when he wrote, "The respect and trust developed and nurtured over the years through formal discussions will be thrown out and discarded."
I know that DOD and OPM are listening to the concerns voiced by employees, and I am pleased that the meetings with the United DOD Workers Coalition are continuing. However, these meetings must be more than the exchange of concepts developed around vague and general policy statements. I know everyone who is providing input on the final regulations understands just how significantly the NSPS will change the way DOD hires -- fires -- pays -- assigns -- and works with employees.
As examples, the regulations would create an internal panel to adjudicate labor-management disputes. Panel members would be appointed and removed solely by the Secretary of Defense. Collective bargaining on a number of issues, such as deployment, which has great impact on employees and their families, will be curtailed.
-- MORE -- I find these examples particularly egregious because DOD failed to prove during congressional testimony that such new flexibilities were needed. I know of no instance where union members have refused reassignment or deployment. Rather, the opposite is true. Approximately 5,000 federal civilian workers have been mobilized and serve in Afghanistan and Iraq. At Pearl Harbor, the unions negotiated a long time ago on an orderly process for mobilization to a job site. There are no grievances over assignments -- but there are grievances over not going! Deployments are all-volunteers. The Shipyard boasts an all-volunteer fly away team that is able to change out nuclear submarine batteries in seven days, a job that normally takes anywhere from 15 to 21 days.
I also know of repeated instances where DOD has refused to consider transfer applications by civilian employees because they did not live in the geographic area of the opening.
The creation of internal review boards is fundamentally inconsistent with the federal government's long-held practice of providing checks and balances in ensuring the integrity of government decision-making. The Federal Labor Relations Authority (FLRA) was created in 1978 by the Civil Service Reform Act (CSRA) to separate the adjudication of labor-management disputes from the entity charged with managing the federal workforce. It provides a stable and independent forum to ensure an efficient and effective government. In my mind, internal adjudication panels do not foster independence. They lack credibility, blur the relationship between the career civil service and elected and appointed officials, and could foster a backdoor patronage system.
The NSPS was intended to provide managers with workforce flexibility, not reduce the rights and protections of the civil service. The NSPS is required to be based on federal merit principles and provide for collective bargaining. Recombining the responsibilities of employee protections and program management within DOD, while limiting the power of independent agencies that oversee the Department's activities, brings the Department's policies in direct conflict with the fundamental principles of the federal civil service and could substantially erode the rights and protections of federal employees -- both DOD and non-DOD employees.
For example, the regulations place time limits on the MSPB to adjudicate cases which -- given the size of DOD -- will have a significant and substantial adverse impact on MSPB's ability to timely adjudicate the cases of non-DOD employees.
In addition, the regulations severely limit the discretion of MSPB judges to mitigate penalties or award attorney fees, and requires decisions to made in deference to DOD's national security mission. Even more shocking is the fact that the regulations provide DOD with wide discretion to review and reverse a MSPB administrative judge's initial findings of fact. Therefore, the NSPS is comparable to a system that would allow prosecutors to overturn the factual findings of a jury or a district court, replace it with the prosecutor's determination of facts, and require the appellate courts to be deferential to that finding. The proposed changes undermine the MSPB's effectiveness for serving as a neutral decision maker.
How credible can a system be that allows the employee's agency to reverse the findings of a neutral decision maker?
These proposed NSPS rules will only lower employee morale, impair DOD's recruitment and retention efforts, and impede -- not aid -- agency mission.
I want our first panel to explain why they believe the regulations are both fair and perceived as fair by employees, which is a stated goal of DOD, and will promote agency mission.
I have other very fundamental problems with the proposed regulations, the first of which is the lack of detail. In congressional testimony, David Chu, Under Secretary of Defense for Personnel and Readiness, noted, "It is often said that the devil is in the details, that best intentions may be overcome by wrongheaded implementation. We welcome scrutiny of the details of our implementation." I agree the devil is in the details, but the proposed regulations lack details. Modern organizations recruit and retain employees through pay, benefits, and improvements in work-life conditions. One of the most important benefits to all employees is pay, which is why I am troubled by the lack of detail given to the proposed NSPS compensation system.
My second concern is DOD's inability to assess accurately its workforce needs. As the Chairman knows from our hearing last month on the GAO High-Risk List, DOD has more programs on the list than any other agency. The Department does not have a strategic human capital plan in place. No single document identifies DOD's recruitment and retention strategy or goals for its future workforce.
My third concern is over how DOD will implement the policy directives embodied in the proposed rules, especially when this country is at war. The need to develop and fund the myriad of implementation programs, especially the training of managers and employees, is a costly undertaking. Without a meaningful and fully-funded process, no policy directive can be effective. GAO took almost 15 years to bring all of its employees under a pay for performance system. DOD is planning to do it in three to four years without increasing the training budget or funds to reward good performers.
The NSPS is a performance-based system that will depend on managers making meaningful distinctions when making appraisal evaluations. Without adequate training, this process is doomed. Employees will be grouped into occupational pay clusters that will be based on market based compensation surveys. Getting these surveys and performance appraisals right the first time is critical and not cheap. Given the fact that most agencies fail to adequately fund training programs to begin with, I question the decision by DOD not to increase resources dedicated to training.
In addition, I believe that in order to be successful, DOD must ensure that any pay for performance system has adequate funding. A zero-sum reallocation of salaries and salary adjustments will guarantee failure by rewarding a select few at the expense of the majority of employees who do good work, thereby creating an atmosphere of distrust among the workforce and lowering morale.
DOD must also provide for transparency, accountability, and fairness in the system. The current regulations provide for an internal process to challenge a performance evaluation and no process for challenging a performance pay decision. Given the wide flexibility granted to the Department to establish this new system, it imperative that DOD uses this authority responsibly. Providing fair and transparent systems to make pay and performance decision-makers accountable is necessary.
I also urge DOD to reconsider the virtual wholesale elimination of employee union bargaining rights and the inability of DOD employees to have their appeals impartially adjudicated.
Lastly, I urge flexibility and communication in carrying out these regulations. DOD, by its organizational nature, operates in a command and control environment. Employee input is critical to the success of the NSPS, and without union participation -- not just consultation -- there will be no success. Limiting opportunities for employees to join unions and minimizing or curtailing the ability of labor unions to organize and bargain over issues that will have a direct and sometimes adverse impact on how employees will do their jobs will guarantee failure. There must also be defined roles for managers who under the NSPS will be more accountable for agency performance.
Mr. Chairman, I believe we have much to learn from today's hearing. I look forward to hearing from our distinguished witnesses who I hope will rejoin us for future hearings as we continue our oversight responsibilities of the NSPS.
