<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:21432.wais]
S. Hrg. 109-166
EMPLOYING FEDERAL WORKFORCE FLEXIBILITIES: A PROGRESS REPORT
=======================================================================
HEARING
before the
OVERSIGHT OF GOVERNMENT MANAGEMENT,
THE FEDERAL WORKFORCE AND THE DISTRICT
OF COLUMBIA SUBCOMMITTEE
of the
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
APRIL 21, 2005
__________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia
Michael D. Bopp, Staff Director and Chief Counsel
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Amy B. Newhouse, Chief Clerk
OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE
DISTRICT OF COLUMBIA SUBCOMMITTEE
GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii
NORM COLEMAN, Minnesota CARL LEVIN, Michigan
TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia
Andrew Richardson, Staff Director
Richard J. Kessler, Minority Staff Director
Nanci E. Langley, Minority Deputy Staff Director
Tara E. Baird, Chief Clerk
C O N T E N T S
------
Opening statements:
Page
Senator Voinovich............................................ 1
Senator Akaka................................................ 3
Senator Carper............................................... 13
Senator Pryor................................................ 34
WITNESSES
Thursday, April 21, 2005
Marta Brito Perez, Associate Director for Human Capital
Leadership and Merit System Accountability, U.S. Office of
Personnel Management........................................... 5
Eileen Larence, Director, Strategic Issues, U.S. Government
Accountability Office.......................................... 7
Evelyn M. White, Principal Deputy and Acting Assistant Secretary
for Administration and Management, Department of Health and
Human Services................................................. 19
Jeffery K. Nulf, Deputy Assistant Secretary for Administration,
U.S. Department of Commerce.................................... 21
Rafael Deleon, Director, Office of Human Resources, Environmental
Protection Agency.............................................. 25
Vicki A. Novak, Assistant Administrator for Human Capital
Management and Chief Human Capital Officer, National
Aeronautics and Space Administration........................... 27
Alphabetical List of Witnesses
Deleon, Rafael:
Testimony.................................................... 25
Prepared statement........................................... 86
Larence, Eileen:
Testimony.................................................... 7
Prepared statement........................................... 53
Novak, Vicki A.:
Testimony.................................................... 27
Prepared statement........................................... 91
Nulf, Jeffery K.:
Testimony.................................................... 21
Prepared statement........................................... 77
Perez, Marta Brito:
Testimony.................................................... 5
Prepared statement........................................... 43
White, Evelyn N.:
Testimony.................................................... 19
Prepared statement........................................... 73
Appendix
Letter to Senators Voinovich and Akaka, dated April 25, 2005,
from Carol A. Bonosaro, President, and William Bransford,
General Counsel, Senior Executives Association................. 98
Questions and Responses for the Record from:
Ms. Perez.................................................... 101
Ms. Larence.................................................. 113
Ms. White.................................................... 119
Mr. Nulf..................................................... 124
Ms. DeLeon................................................... 133
Ms. Novak.................................................... 138
EMPLOYING FEDERAL WORKFORCE FLEXIBILITIES: A PROGRESS REPORT
----------
THURSDAY, APRIL 21, 2005
U.S. Senate,
Oversight of Government Management, the Federal
Workforce and the District of Columbia Subcommittee,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:35 a.m., in
room SD-562, Dirksen Senate Office Building, Hon. George V.
Voinovich, Chairman of the Subcommittee, presiding.
Present: Senators Voinovich, Akaka, Carper, and Pryor.
OPENING STATEMENT OF SENATOR VOINOVICH
Senator Voinovich. This hearing will please come to order.
Good morning. Today's hearing, ``Employing Federal
Workforce Flexibilities: A Progress Report,'' is one that I
have been looking forward to.
The purpose of today's hearing is to examine the
implementation of a series of human capital reform bills that
have been enacted over the last 2 years. All of these bills
originated in our Subcommittee, and I am proud to say that
working closely with Senator Akaka and other Members of this
Committee, they have become law.
Again I want to thank Senator Akaka, and his staff, for all
the time and effort they have put into working on legislation
that is so very important to our country's future. While
passing these reforms was difficult, it is only the first of
Congress's responsibilities.
On July 20, 2004, we convened a hearing of the Subcommittee
with a similar oversight agenda, and we will hold additional
oversight hearings in the future. I want to let everybody know
that I will be serving in the Senate for another at least 5\1/
2\ years. I intend to stay on top of this issue.
I cannot emphasize enough the need for continued
congressional oversight of these reforms. On November 25, 2002,
the Homeland Security Act of 2002 became law. Included in that
legislation were provisions that equaled the most significant
reforms to the civil service in a quarter of a century. They
included the establishment of agency Chief Human Capital
Officers and a Chief Human Capital Officer's Council. The
permanent authorization of the workforce reshaping authorities,
voluntary early retirement authority, voluntary separation
incentive payments, and a long overdue modification to the
hiring process that allows Federal agencies to use category
rating instead of the over 100 year-old ``rule of three.''
On November 11, 2003, the Federal Employee Student Loan
Assistance Act became law. The law raises to $10,000 from
$6,000 and to $60,000 from $40,000 respectively, the annual and
aggregate limits of student loan repayment Federal agencies may
offer employees as recruitment and retention incentives. I am
pleased to see that the Office of Personnel Management (OPM)
has reported that for fiscal year 2003 agencies spent three
times as much on student loan repayment than they did in fiscal
year 2002. In total, 24 agencies provided more than $9.1
million in student loan repayments to 2,077 Federal employees.
On November 24, 2003, the purpose of the Senior Executive
Service Reform Act was accomplished by a provision of the
fiscal year 2004 Defense Authorization Bill. This provision
relieves pay compression within the Senior Executive Service by
allowing agencies to establish a pay-for-performance system for
their senior executives. We are all familiar with the problem
that 75 percent of our senior executives all received the same
pay.
Proper and effective implementation of a performance
management system is imperative to the long-term ability of
Federal departments and agencies to meet their mission. I look
forward to the testimony regarding the certification process
for the performance management systems for senior executives,
and how implementation is proceeding.
On February 24, 2004, the NASA Flexibility Act of 2004
became law. The law provides several new flexibilities to the
National Aeronautics and Space Administration to help that
agency recruit and retain the best and brightest scientists and
engineers for the agency's high technology mission. I know that
the President has challenged NASA with a new mission and that
NASA has been working to realign its workforce to meet the new
mission. Unfortunately, there have been numerous reports of
proposed actions by NASA that have raised concern as to whether
or not the agency is using the flexibilities as Congress
intended. I look forward to discussing this matter in greater
detail.
Last, but not least, the President signed into law on
October 30, 2004, the Federal Workforce Flexibility Act. That
legislation enacted such reforms as compensatory time for
travel, enhanced leave for individuals who join public service
mid career, and an increased focus on training within agencies.
It has only been 6 months since enactment, but OPM has been
working to implement these reforms, including the publication
of interim regulations for the compensatory time off for travel
provision on January 28 of this year. I look forward to
learning how OPM has been working with agencies to assist the
agencies understand these reforms and how agencies have begun
to implement them.
As I said earlier, I am proud of what we have accomplished
and the changes we made in the civil service code. This
Subcommittee has set aside partisan differences and worked
together to modernize the Federal civil service. All of these
changes have been carefully considered and have been sought to
provide greater flexibility to the existing civil service
framework.
Through these hearings, I hope to establish a sense of what
is working, what is not, and how lessons learned from
implementation can assist other Federal departments and
agencies as they work to implement their reforms.
I would like to now yield to my Ranking Member of this
Subcommittee, my good friend, Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Chairman Voinovich. I
want to thank you for holding this hearing today which builds
on the one that we held in July of last year.
When I chaired the Postal Subcommittee, I continued the
long-standing tradition of holding an annual hearing on the
state of the U.S. Postal Service, and I am glad that we will
continue to hold at least a yearly hearing on workforce
flexibilities as we are doing now to review the implementation,
use, and training for these new flexibilities.
Mr. Chairman, I appreciate what you are doing as Chairman
of this Subcommittee, and as a leader in the U.S. Senate. I
want to thank your staff, as well as my staff, for all the work
that they have been doing in this area.
You and I have worked hard to ensure that agencies have the
tools and resources needed to recruit, retain, and manage their
workforce. As you noted, we joined together to add government-
wide flexibilities to the Homeland Security Act to give
agencies increased authority to manage their workforce. Among
these flexibilities were permanent use of Volunteering
Separation Incentive Payments (VSIP) and Voluntary Early
Retirement Authority (VERA); the use of categorical ratings
instead of the rule of three for hiring; and the creation of
Chief Human Capital Officers and the Chief Human Capital
Officers Council.
I was also pleased to join you, Mr. Chairman, as a
cosponsor to the substitute amendment to the Federal Workforce
Flexibility Act last year, which included my provision allowing
employees to receive compensatory time off for time spent in
travel outside of the normal work hours. Compensatory time for
travel is a good work-life program, and it is one that I
believe will help attract and retain quality employees.
I would like to note that in 2002, the Government
Accountability Office (GAO) reported on the government's
flexibilities and said that those most effective in managing
the workforce are work-life programs such as alternative work
schedules, child care assistance, transit subsidies, cash, and
time-off awards.
Last year we heard that agencies were not using the
flexibilities Congress granted them and that OPM had given
little guidance in terms of training and general information
about the flexibilities that were available.
Despite OPM implementing a 45-day hiring process,
applicants for Federal jobs still complain that it takes too
long to get hired. We need to figure out why the tools
currently available to agencies are not making a difference.
However, judging from the President's Human Capital
Scorecard, and the testimony submitted for today's hearing, it
appears that some progress is being made in the use of VSIP and
VERA for agency restructuring, the use of annual leave
enhancements to recruit mid-level hires and provisional
certification for participation in the Senior Executive Service
(SES) pay-for-performance system.
I am still concerned, however, that agencies continue to
lack funds to implement these flexibilities. Similar to the
questions over funding for the pay-for-performance system and
employee training on flexibilities at the Department of Defense
(DOD) and Department of Homeland Security (DHS), we need to
know how agencies are paying for the government-wide
flexibilities. Agencies need adequate funding to implement pay-
for-performance systems, award bonuses, utilize critical pay
authority, provide academic degree training, and provide
student loan repayment.
With agencies still not making the most effective use of
the workforce flexibilities granted by Congress, in addition to
a lack of adequate funding, I find it premature to discuss at
this time expanding the broad flexibilities granted to DHS and
DOD to the rest of the Federal Government, especially in the
areas of collective bargaining and appeals--which have never
been tested.
Mr. Chairman, we have with us a distinguished group of
witnesses today, and I look forward to hearing from them on how
their agencies are using these flexibilities, as well as any
barriers they may have encountered relating to their use. Thank
you so much, Mr. Chairman.
Senator Voinovich. Thank you, Senator Akaka. I agree with
you. I am really glad that you are here; you are part of what I
refer to as the A team. Your commitment is what gets the job
done.
Senator Akaka. I should add that the Chairman did mention
to me that I am going to be surprised at what we are going to
hear today, so I am looking to be surprised. [Laughter.]
Senator Voinovich. How is that for putting the jacket on
you? [Laughter.]
I ask all the witnesses to stand and raise their right
hand. It is the custom of this Subcommittee to swear in all
witnesses.
Do you swear that the testimony that you are about to give
to this Subcommittee is the truth, the whole truth, and nothing
but the truth, so help you, God?
Witnesses. I do.
Senator Voinovich. Let the record show that all the
witnesses answered in the affirmative.
I would like to welcome Marta Perez, the Associate Director
for Human Capital Leadership and Merit System Accountability at
the Office of Personnel Management; and Eileen Larence,
Director of Strategic Issues at the Government Accountability
Office.
Ms. Perez and Ms. Larence, I thank you for appearing before
the Subcommittee, and we look forward to your testimony today.
While oral statements traditionally are limited to 5 minutes,
but if you go a bit longer, it is fine. Your written testimony
will be included in the record. Also, if we do not ask all of
our questions, we will submit them and ask you to respond in
writing. Thank you. Ms. Perez, will you please proceed.
TESTIMONY OF MARTA BRITO PEREZ,\1\ ASSOCIATE DIRECTOR FOR HUMAN
CAPITAL LEADERSHIP AND MERIT SYSTEM ACCOUNTABILITY, U.S. OFFICE
OF PERSONNEL MANAGEMENT
Ms. Perez. Very good. Thank you, Mr. Chairman. Good morning
to everyone. Thank you for having me here today. I am pleased
to appear on behalf of the Office of Personnel Management and
share this panel with Eileen Larence. I have a written
statement and I ask that it be included for the record, and I
am happy to summarize for the Subcommittee as well.
---------------------------------------------------------------------------
\1\ The prepared statement of Ms. Perez appears in the Appendix on
page 43.
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I am equally pleased to be here with my colleagues from the
Department of Commerce, the Environmental Protection Agency,
the Department of Health and Human Services, and the National
Aeronautics and Space Administration. OPM is honored that the
President has given us a responsibility to lead the
transformation of human capital management in the Federal
Government. Through our technical assistance and compliance
programs, we work very closely with the agencies to ensure
their progress. When they succeed, the American people benefit.
I am grateful for the support and the partnership agencies have
had with OPM over the last 3 years.
Today, my testimony will focus on three areas: First, the
development and implementation of the pay-for-performance
regulations for the Senior Executive Service; next, the
training and education OPM has done to encourage the agencies
to make use of workforce flexibilities; and third, I will
comment on the use of workforce flexibilities at NASA and what
OPM has done to ensure they are implemented consistent with
congressional intent and OPM-approved workforce plans.
The Senior Executive Service Reform Act pay-for-performance
legislation gives opportunities to ensure that accountability
for performance management resides at the highest level of
government. How we are getting there is as important as the
results we are achieving.
The law provides broad flexibility, clear objective, and a
strict accountability. OPM matched the statutory framework with
a regulatory framework that features clear and rigorous
criteria, close consultation with agencies in implementing
those criteria, and provisional and full certification of
agencies' plans.
The result of this effort is a system of Federal executive
compensation featuring an open pay range while ensuring
agencies have a system in place for making meaningful
distinctions in performance, and basing all compensation
adjustments on performance. In fiscal year 2004, 32 agencies
received full or provisional certification for the SES or
equivalent performance management plans which held executives
and managers accountable for results, and based compensation on
the outcomes. To date, 15 agencies have received certification
for fiscal year 2005, with another 12 requests undergoing
review.
In general, for the agencies that are requesting second
year certification, we are seeing fiscal year 2004 data that
shows agencies are making distinctions in levels of
performance, pay adjustments, and awards, and where we see
weaknesses in their programs, we require them to take
corrective action. Rating distributions are more closely
aligned to the performance of the organization, and
organizational performance has become a key factor in pay
distinctions.
As you have so accurately pointed out in the past, Mr.
Chairman, strategic human capital management must become
institutionalized in the executive agencies. OPM strategically
restructured and created the position of Human Capital Officers
in our agency to work with the agencies across the Federal
Government, one Human Capital Officer per agency. OPM provides
technical assistance to the agencies and monitors the
implementation of requirements that were laid out in the human
capital initiative of the President's Management Agenda, Mr.
Chairman, including the implementation of your flexibilities.
Additionally, OPM is proactive in providing agencies with
guidance and training after it publishes regulations. This
includes memoranda for implementing and administering new
provisions, briefings for the Chief Human Capital Officers
Council, forums and symposiums for human resources directors
and human resources practitioners, and follow-up technical
assistance and individual attention by our Chief Human Capital
Officers.
A review of agencies' efforts suggests they have improved
in their management of human capital, that the fundamental
concepts of workforce planning, succession planning,
performance management for results and leadership development
are integral parts of agencies' human capital management
planning process. Nearly one-third of the executive agencies,
nine in all, have achieved the green status on their human
capital management efforts, and almost all are making some use
of many of the flexibilities available to them.
But we, at OPM, believe in flexibility with accountability.
The additional human resources flexibilities being given to
agencies reinforce the need for stronger agency internal
accountability systems that hold executives and managers
responsible for the effective management of their workforce.
This evolution places a greater responsibility for
accountability at the level within each agency where
authorities are delegated and where decisions are being made.
Strengthening accountability government-wide ensures adherence
to merit system principles and results in efficient, effective,
and responsible administration of government services. OPM
takes its responsibility for accountability very seriously, and
expects the same from the agencies.
We work closely with the Chief Human Capital Officers
Council and their representatives across the agencies. Mr.
Chairman, your leadership and authoring the legislation
establishing these important positions is already having a
substantial impact on Federal human capital management. In
addition, the CHCO Council is playing a major role in the
administration's efforts to modernize the civil service.
Mr. Chairman, you asked OPM to comment on NASA's use of
workforce flexibilities, and you asked what have we done to
ensure NASA's implementation is consistent with congressional
intent and the agency's workforce plan.
Senator Voinovich. Ms. Perez, your time has expired. I will
ask you to respond to that question during the question-and-
answer period.
Ms. Perez. Very good.
I would only say that we feel they are meeting the
expectations of the Congress in their use of their flexibility.
Because of the work of the Subcommittee, agencies now have
the additional flexibilities which are being used to recruit
and retain employees. These flexibilities, however, we feel
strongly, cannot mask the deficiency of a personnel system that
is still not well suited to meet the mission critical goals of
today's Federal workforce. I will be glad to answer any
questions that you have.
Thank you.
Senator Voinovich. Thank you very much. Ms. Larence, please
proceed.
TESTIMONY OF EILEEN LARENCE,\1\ DIRECTOR, STRATEGIC ISSUES,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Larence. Thank you. Mr. Chairman, and Senator Akaka, I
am pleased to be here today to discuss GAO's work on how
agencies are using recent human capital flexibilities Congress
has provided.
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\1\ The prepared statement of Ms. Larence appears in the Appendix
on page 53.
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We agree that the Subcommittee's investment in this
oversight is important and timely. We continue to propose that
if agencies want to take full advantage of new flexibilities to
help them hire, develop, retain, and reward their talent, they
must first have in place committed leadership and the necessary
supporting infrastructure, including a strategic planning
process that links human capital policies and programs to
achieving organizational results; the capabilities to develop
and implement these new flexibilities; and a modern, effective
and credible performance management system with key safeguards
built in.
Our work at various agencies shows that we do not yet have
all these pieces in place, but we are making progress. I would
now like to focus on several of these elements.
First, for reforms to work, senior executives must lead the
way and cascade successful practices down through their
agencies. OPM and GAO have recognized this and called on
agencies to develop rigorous performance management systems for
their executives, ones that link their day-to-day activities
with organizational results and make clear distinctions in
their performance. Such systems provide individuals the
feedback they need to drive their performance toward agency
goals, and provide management with objective information to
reward those who have made the greatest contributions.
Agencies must demonstrate they have such a performance
management system in place to take advantage of the new higher
pay caps for SES that became effective January 2004. Our prior
work for your Subcommittee, Mr. Chairman, indicates that while
select agencies have begun to incorporate some of the needed
elements into their systems, such as a link between individual
and organizational results, their appraisal systems were not
distinguishing their highest performers.
As you already acknowledged, recently released government-
wide data on SES ratings for Fiscal Year 2003, the most current
available, show similar results government-wide. OPM will have
to carefully monitor agencies' SES performance management
systems to ensure they are functioning as intended and driving
organizational change. This is especially important if these
systems are to be cascaded down through their agencies.
One other point on leadership, our ongoing work continues
to show that agencies want to coordinate on how they are
implementing the flexibilities, including problems, innovative
solutions, and ideas for more efficiency. OPM and the Chief
Human Capital Officers Council could serve as the catalyst for
this coordination.
Second, turning to the critical infrastructure needed, we
have found that agencies can make the best use of flexibilities
if they are implemented in the context of a strategic human
capital planning process. Recent work shows some agencies still
face challenges in designing their process. For example, this
past March, we reported on NASA's struggles to devise a long-
term strategy for its space shuttle workforce, given that the
shuttle may retire at the end of the decade. To help agencies,
we offer a planning model that includes basic fundamental
steps--identify the workforce competencies you need, your
critical gaps, and those flexibilities that will best help you
close the gaps. Agencies must also evaluate whether the
flexibilities are achieving the intended results, or in other
words, are they worth the investment?
Third, agencies must have the capability to effectively use
new tools and consequently should practice some fundamentals--
they have an implementation plan, they educate their managers
and staff on these flexibilities, and they streamline their
processes to make it as easy as possible to use those
flexibilities. These practices could help in the government's
efforts to improve the Federal hiring process. As you have
already acknowledged, Mr. Chairman, there is considerable
frustration that it takes too long and it is too hard to bring
top talent on board. OPM, its external partners, and agencies
have been hard at work redesigning parts of the process.
Congress also provided agencies direct hiring and category
rating authorities to help agencies more quickly hire the
talent they need for critical positions. Senator Akaka, as you
pointed out, our work last showed that few agencies were using
the flexibilities, mainly because the agencies were not ready.
They did not have guidance or policies in place or understand
how to use the tools. Since then, OPM has been taking steps to
better educate agencies on these flexibilities, but it must
continue to monitor and encourage their use.
I just wanted to point out that we currently have work
under way on two other flexibilities that the Congress has
provided, the use of the early-out and buy-out authorities, as
well as the use of the student loan repayment program, and we
hope to report the results of that work later this year.
In closing, Mr. Chairman, it will be important to continue
assessing, supporting and making adjustments to the
flexibilities provided. In addition, as Congress considers
future reforms, it will be equally important to make sure
agencies have built a business case for the tools and have the
leadership and infrastructure to implement them before the
agencies are given these additional flexibilities.
Finally, GAO, working with a number of external partners,
has developed a framework, a set of principles, criteria, and
processes, that could help guide decisions about future
reforms.
Mr. Chairman, that concludes my prepared remarks, and I
would be happy to answer any questions.
Thank you.
Senator Voinovich. Thank you very much.
When Harvard University's John F. Kennedy School of
Government hosted an executive session on the issue of Federal
human capital management, one idea that everyone seemed to
agree on was a need for agency Chief Human Capital Officers.
I would like to ask both of you how effective do you think
they and the Chief Human Capital Officers' Council has been?
The concept was that they would be sharing ideas, and increase
coordination, and elevate the issue of human capital management
in the Federal Government. Is it working?
Ms. Perez. Thank you, Mr. Chairman. I will say yes to all
of the above. We meet regularly, on a monthly basis. They bring
issues to the table and to OPM they think require attention.
In addition to that, we use the Council as an opportunity
to share policies as they are being developed, and regulations
as they are being considered, and to provide an opportunity for
sharing lessons learned, and best practices, so that we do not
have to reinvent the wheel throughout the agencies.
So I would say yes, the Council is absolutely working, and
it has elevated the interest of human capital to the highest
level of the agencies, so they exercise important leadership in
the organizations.
Senator Voinovich. Have all the agencies, in your opinion,
designated Chief Human Capital Officers as required by
legislation? Contributing to the problem was the downsizing
during the previous decade. Human resources was viewed as
important, I believe we need to elevate it and recognize its
importance. I do not know if you read Jack Welch's book, but he
spent more than half of his time on recruiting people. He
understood that human capital is the backbone of any successful
organization.
Are you seeing this recognition in the Federal Government?
Ms. Perez. Absolutely. I have the opportunity to work very
specifically with agencies, each one of them. I visit with them
regularly. I interact with the Chief Human Capital Officers. I
interact with their HR directors. I am pleased to say there is
absolutely no push-back or no sense in any one of the agencies
that we deal with that human capital is not important or that
they should not be taking proactive steps to deal with human
capital issues.
So, absolutely, there is a clear understanding on the part
of the agencies of the importance of managing people in the
organizations.
Senator Voinovich. Have you officially or unofficially
evaluated the people in these agencies?
Ms. Perez. We officially rate the Agency's programs. I do
not officially or unofficially rate the individuals, but I
would say, by and large, they are all very committed to the
programs across the board. Everybody is working on implementing
programs, and nine of the agencies already have programs in
place, and by being ``green'' that suggests that they can
demonstrate results as well.
Senator Voinovich. Perhaps OPM should consider a peer
review process for these individuals. Well, my suggestion would
be that you ought to do it. Each agency hires it own human
resources professionals, but the fact of the matter is, with
such a group of individuals, professionals could offer
important professional development opportunities to each other.
Ms. Perez. Thank you. Well, actually, we do provide that
kind of feedback to the agencies, and to the individual CHCO
Council members. I thought you meant a formal rating, that it
was somehow akin to what agencies use in terms of evaluating
their individuals' performance. That job is left to the
leadership of the Agency, but we do provide feedback.
Most importantly, we do raise issues or concerns when we
see that CHCO is not leading the human capital initiative as
they should. Just as importantly, we provide a lot of training
and developmental opportunities. We hold an academy for the
CHCO's that is limited to principals only, where they have an
opportunity to bring concerns, and where we have an opportunity
to raise concerns with them as well. They are scheduled on a
monthly basis, and they provide good opportunities for saying,
``Hey, this is going really well'' or ``not so well.''
Senator Voinovich. Good. Another opportunity in the CHCO
Council is for members to offer their personal experiences as
lessons for the others.
Do you want to comment on the CHCO Council, Ms. Larence?
Ms. Larence. I just wanted to make three observations.
First, GAO continues to encourage the Council to think about
developing a strategic plan. There are so many human capital
flexibilities and issues out there we believe the Council
should try to set some priorities for where they should focus.
Second, on our ongoing work we continue to----
Senator Voinovich. Pardon me. Would you clasify if you are
referring to individual agencies or the Chief Human Capital
Officers Council.
Ms. Larence. We encourage the Council to set some
priorities.
Or where they are going to focus their attentions and what
they want to achieve over certain time frames.
We continue to see that agencies really want to, quite
frankly, talk to each other about how they are using these
flexibilities, but it is difficult for them to figure out how
to make the necessary logistics happen, and we think that the
CHCO Council and OPM can serve as a facilitator for that
conversation. The sharing of best practices has been very
helpful, and agencies are doing some of that but there is
probably a lot more opportunity to do that.
And finally, when we last reviewed the CHCO Council, we did
encourage them to also think about some of the strategic issues
facing them, including the next set of reforms, more
comprehensive reforms and what is the state of human capital
strategic planning and performance management systems across
the government.
Senator Voinovich. Thank you. Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
I want to thank both of you for your testimony.
I also want to thank you, Ms. Perez, for visiting Hawaii in
August 2003 in an official capacity. You are welcome to Hawaii
whether it is in an official capacity or not.
Ms. Perez. Thank you.
Senator Akaka. And I just hope you enjoyed your visit to
Hawaii.
This is to both of you. Congress has authorized a number of
workforce flexibilities, all of which are designed to retain
and recruit the people the Federal Government will need for the
future. Agencies now can offer a range of incentives such as
bonuses, child care subsidies, student loan repayment, just to
name a few, and yet agencies do not have the resources to fund
these flexibilities.
What impact has the lack of resources had on the ability of
Federal agencies to take advantage of these flexibilities? Ms.
Perez.
Ms. Perez. Thank you, Senator. What we ask of agencies is
that they look at the flexibilities strategically, so that
while resources are limited in terms of what they can afford,
we think that if they are used wisely and that if they look at
the resources across the entire organization and prioritize,
that they can identify resources.
It is clear that as we continue to face challenging
budgetary times, agencies will have some challenges, but that
is where strategic planning becomes a real asset. But, if you
plan well in advance, if you identify what your needs are going
to be, short term and long term, it is easier to then allocate
resources based on those needs.
So, I think that while it is difficult at times, I think
that strategic planning or planning well in advance helps the
agencies to make not only good people decisions but also to
allocate resources, financial and otherwise, appropriately.
Ms. Larence. We agree that it is critical that the agencies
really think about this strategically and what tools are going
to work most effectively for them, and we think that the fiscal
constraints help them to do that. What we are beginning to see
is they are making tradeoff decisions. They are determining
whether they have a retention problem or a recruitment problem,
and if so, what is the best tool to use? Is it student loan
repayments or maybe it is using the retention and relocation
bonuses.
So instead of trying to use all the flexibilities because
they are there, we are encouraging agencies to really think
hard about what it is that they have to address and what
flexibilities work best, and to make those fiscal tradeoffs.
Senator Akaka. Ms. Perez, last year, OPM implemented a 45-
day hiring model for the Federal Government. OPM also announced
that it would begin scoring agencies in its use of the 45-day
model for the strategic human capital management portion of the
President's Management Agenda, beginning in the fourth quarter
of fiscal year 2004.
Has OPM started scoring agencies on meeting this goal? And
if so, how are the agencies doing and what barriers are there,
if any, to meeting the 45-day model?
Ms. Perez. Yes, sir, we did begin, as promised. We began
the evaluation or the review of agencies' hiring processes in
terms of meeting a 45-day standard that we had laid out. And
about 73 percent of the agencies are now meeting the 45-day
time-frames.
Have we fixed the hiring problems in the Federal
Government? No. Have we made progress in terms of making sure
that agencies are paying attention to their hiring processes,
eliminating unnecessary burdens and administrative layers? I
think we made a great deal of progress, but much work remains
to be done still, sir, so that applicants feel like our
processes are inviting processes.
Senator Akaka. Ms. Perez, over the past several years
Congress has made several significant changes in the Federal
hiring process in order to speed up hiring for Federal
positions. Category rating gave agencies the ability to
consider a broader group of candidates for open positions, and
a direct hire authority allows agencies to make on-the-spot
offers for hard-to-fill jobs.
However, GAO testified that while agencies are improving,
they are not using all available flexibilities to speed up the
hiring process. On a scale of 1 to 10, with 10 being the most
effective use of the hiring flexibilities, how are agencies
doing?
Ms. Perez. I think, sir, it varies. Not to be evasive, but
it really varies with the flexibility. And as we alluded to in
your earlier question about fiscal constraints in the Federal
Government, agencies are using the flexibilities as they see
appropriate or as it meets their organizational needs.
For the most part, for instance, we are seeing a great deal
of use of the VSIPs and the VERAs, of the early buyouts and
early retirement provisions. We are seeing increased use of
student loan repayments.
But we track agencies' efforts, and we are seeing their use
of flexibilities throughout the organizations varies depending
on their needs. There are some areas where we think they still
need to use them more widely, and for that, OPM is working
closely with the agencies and providing a great deal of
training. We held 27 sessions last year throughout the country,
where we provided training on the use of flexibilities. We
provide a lot of technical assistance to individual agencies.
We have done hiring makeovers where we go in and review their
hiring efforts and then make recommendations as to what
flexibilities might be appropriate.
So, I think we have made a great deal of progress. I think
OPM continues to develop better tools to help the agencies as
well. On a scale of 1 to 10, I think it varies with the
flexibility. Overall, I would say that we are probably a 6 or a
7.
Senator Akaka. Would you have any comment on that, Ms.
Larence?
Ms. Larence. I think for some of the flexibilities, we are
seeing the agencies roll them out a little more slowly than we
would have expected. For example, in looking at student loan
repayment programs, most of the loans have been let by five
agencies at this point.
So, we have seen OPM and the CHCO Council really doing a
lot of outreach and education, and we think that is key to
helping agencies use flexibilities.
The one thing we also have learned, though, is that you
really can not tell the story by the numbers, just by looking
at how many agencies and how frequently they are using these
flexibilities, because sometimes it is a strategic decision not
to use them. So, you really have to go into the agencies and
ask them to talk about how they have taken a comprehensive
approach to using these tools. For example, direct hire.
Agencies may not have critical occupations that they need to
fill at that point. So, we have learned to be careful with
using just the numbers.
Senator Voinovich. Thank you.
Senator Akaka. Mr. Chairman, before I yield, I just want to
say that you and I understand that agencies' budgets are
stretched. While asking agencies to do their best to develop
good strategies to stretch these budgets, and Ms. Perez did
mention that strategic planning does help to do this, you and I
can work together to educate our colleagues on this problem.
Thank you, Mr. Chairman.
Senator Voinovich. We are very fortunate to have Senator
Carper with us this morning.
And Senator Carper, you did not have an opportunity to make
an opening statement, and I would welcome you to do that, and
ask questions.
Senator Carper. Thank you, Mr. Chairman. I will not make an
opening statement. I would like to ask a direct question to Ms.
Perez though, if I could.
I understand that you have been to Hawaii?
Ms. Perez. Yes, sir. [Laughter.]
Senator Carper. Did you enjoy the hospitality that was
extended to you there?
Ms. Perez. I did.
Senator Carper. Have you been to Ohio?
Ms. Perez. Yes, sir.
Senator Carper. Delaware?
Ms. Perez. Yes, sir.
Senator Carper. You have?
Ms. Perez. To Delaware?
Senator Carper. Yes.
Ms. Perez. Yes, sir.
Senator Carper. Have you been to Delaware, Ohio?
Ms. Perez. No. There I have not been. [Laughter.]
Senator Carper. When I was a student at Ohio State
University, used to think that Delaware was a little town about
30 miles north of Columbus, where I went to school. And later
on, when I was getting out of the Navy, I found out there was a
whole State. [Laughter.]
And that Ohio probably was not a big enough State for both
George Voinovich and me to be governor in, so I had to move to
Delaware to find my fortune. Well, find my fame, but not my
fortune. [Laughter.]
My wife is hoping I will find my fortune, but not yet.
We thank you for being here today, and we welcome your
testimony, and your help. As you know, the President has
proposed giving, I think, basically all Federal agencies the
same kind of significant new personnel flexibility that has
been afforded to the Department of Defense and our new Homeland
Security Department.
Do you think we ought to slow down a little bit and wait to
see how those two big agencies are using this flexibility
before we expand them?
Second part of that question, do you believe that other
agencies, other than the two that I have mentioned, are fully
utilizing the flexibilities that are already afforded to them
under current law?
Ms. Perez. If I may, sir, with regard to whether we should
move forward with additional flexibilities of government-wide
reforms, I am of the opinion, after having worked for 3 years
now with our agencies, that we absolutely should. What
specifically we move forward with in terms of what are the
features of the government-wide effort, I do not know. But I do
think that there is absolutely no need to wait to see what
happens in the Department of Homeland Security and what happens
at the Department of Defense. I think with regard to the
provisions on compensation and some other provisions that are
at present in those two personnel reforms, these are
flexibilities that have been in place in government for a very
long time. The Department of Defense has had a number of
demonstration projects that have been very successful, and we
have good data, evaluation data, to look at.
I think with regard to your other question, ``should
agencies be ready to assume the additional responsibilities?''
I agree with you completely, that that should be the case. I
think that through the work over the last 3 years, and the work
of OPM and the agencies specifically, they are continuing to
build their infrastructures to assume the additional
responsibilities. We need to be cautious as we move forward,
but we think we can provide the flexibilities in an environment
where there is a great deal of accountability, where we review
the Agency's efforts. We laid out criteria as to what
constitutes the right infrastructure to support the additional
flexibilities, and then we support them and monitor their
progress. If they do not use it correctly, then we can take
corrective actions to address that.
But I do not think, sir, that it is necessary to wait until
DHS and DOD are implemented. Indeed, the fact that they are
implemented well in one organization will not determine that
they will be implemented well in other parts of the government.
So, I think we are ready. I think we need to move
cautiously and make sure they have the right infrastructure,
and the right accountability systems in place. I do believe
that there has to be flexibility with accountability.
Senator Carper. Why do you believe that some agencies take
better flexibilities that are extended to them than do others?
Ms. Perez. I think that the use of flexibilities--and
Senator Akaka asked the question of constraints, fiscal
constraints and so forth--I think that their use needs to be
really in the context of the operational needs of that
organization, and while all the flexibilities make good sense,
they may not necessarily make good sense for a particular
organization.
I also think that the training that is required to make
sure that they are implemented well takes time. Our
organizations are complex, they are large. Three years in the
scheme of things, and in the life of an organization, is not a
whole lot of time.
So, I think that training is a good thing to do, and I
think agencies are training their employees to make sure they
are used correctly.
So, I think that they are making progress, but I think they
are using them as they see appropriate. So it is not
necessarily, as Eileen suggested, it is not how many they are
using, it is how are they using them that I think ultimately
matters most, sir.
Senator Carper. Eileen, is she putting words in your mouth?
Ms. Larence. Well, as you all know, the Comptroller General
is very passionate about transforming the Federal Government's
human capital system and making it a more modern and credible
and effective system. He is also equally cautious about not
moving forward before agencies are ready and about phasing it
in. So, maybe we have learned a lesson with the SES regulations
in that in some cases agencies that received provisional
authority still are not showing that their systems are where
they need to be to use those authorities, and they are not
making clear distinctions among the performance.
So, the Comptroller General firmly believes that agencies
should be able to----
Senator Carper. What do you call him? Do you call him Mr.
Comptroller General, do you call him Mr. General, or do you
call him General Walker?
Ms. Larence. We call him Comptroller General Walker.
Senator Carper. I call him ``His Excellency.'' [Laughter.]
He seems to like that.
Ms. Larence. Yes, I would agree. [Laughter.]
He would say that we need to make sure that the agencies
demonstrate they can use the flexibilities and not promise that
they can use them. I think that if the Congress decides it
wants to wait and see how DOD and DHS play out, we could use
the time to make sure that the agencies have their performance
management systems and their plans in place to be able to use
the flexibilities, especially if we are going to implement more
performance and market-based compensation systems.
Senator Carper. Are there any questions you have in mind
that we ought to be asking you that we are not?
Ms. Perez. No, personally, I think you are hitting on the
right questions.
Senator Carper. The question about Delaware kind of threw
you though, didn't it?
Ms. Perez. Yes, that definitely threw me off there for a
while. I did not have it in my notes.
Senator Carper. I thought you responded well.
Anything we ought to be asking that we have not?
Ms. Larence. I think the fact that you are asking the
questions is what is important, quite frankly.
Senator Carper. Thanks. Thanks to you for being here.
Senator Voinovich. Thank you, Senator Carper.
I would like another 3-minute round of questions. We do
have three other witnesses, but there are a couple of things I
and my colleagues would like to ask.
Does the GAO develop metrics to evaluate whether or not
agencies are using the flexibilities the way they should?
Ms. Larence. What do you mean by metrics?
Senator Voinovich. Congress has aksed GAO to evaluate
agency use of these flexibilities, and we will be asking you to
do more. So, before GAO constructs these evaluations, they must
develop a system to evaluate whether or not agencies are
utilizing the flexibilities.
Ms. Larence. Yes.
Senator Voinovich. Does GAO work with OMB in developing the
metrics?
Ms. Larence. Yes.
Senator Voinovich. So as GAO works, you know OMB's
perspective so that you would both be on the same page.
Ms. Perez. If I may, actually, I think that is an excellent
point. In fact, 3 years ago, when we were developing the
standards of what constitutes good human capital practices in
the Federal Government, OPM, OMB, and GAO met and came out with
the current expectations that, in fact, they reflect the
thinking of the three organizations.
With regard to looking at the agencies and evaluating the
agencies' use of flexibilities, the agencies come to OPM in
advance of implementing or executing their flexibilities, and
we look at their request in the context of their human capital
practices. So we do have metrics or ways to review their
requests with regards to a more strategic long term-view of
human resources management.
Certainly, we have not worked specifically with the GAO on
the use of flexibilities, but we can consider that.
Senator Voinovich. I just suggested that it might be
beneficial to have the two working from the same evaluation
criteria.
Do you look at agency budgets for training? Does GAO have a
training budget? In other words, right now we have every reason
to believe that Homeland Security has budgeted to conduct
appropriate training for the new performance management system.
We have real reservations about whether or not the Department
of Defense is doing the same thing.
Have either of your agencies looked at these Department's
budgets for training or discussed this with OMB.
Ms. Perez. In fact, with the Office of Management and
Budget, we look very closely at the agencies' overall human
capital efforts because they are a partner in the evaluation of
the agencies' efforts with regard to the President's Management
Agenda. And specifically with training, about a year or so ago
we began to do data calls and require the agencies to report
how much they are actually investing in training, and found
that agencies are not collecting a lot of the information. So,
we are paying a lot of attention to training.
We are evaluating, and incorporating into the score card,
Mr. Chairman, which is the tool that we use to stay very close
to the agencies on a quarterly basis, very specific
requirements with regard to, not so much the dollar amount, but
investing in training, and requiring agencies to train their
managers in the competencies they need to identify gaps that
may exist, and then to take corrective actions to close those
gaps. So, those requirements are in place.
Senator Voinovich. The issue is money?
Ms. Perez. Yes.
Senator Voinovich. I would be interested in again surveying
agencies on training budgets. I did this when I first came to
the Senate--I want to know what agencies are spending on
training and how it is reflected in the budget. The last time I
did this, of the 12 agenceis that responded to my request, 11
said they did not know and one said they knew but would not
share.
Ms. Larence. Mr. Chairman, we do have an ongoing job right
now looking at the Department of Homeland Security's strategic
plan for training, and we are looking at their max HR human
capital project as one of our case studies, and we are looking
at to what extent they are funding that up front.
Senator Voinovich. Thank you. Senator Akaka
Senator Akaka. Thank you, Mr. Chairman.
Ms. Perez, as you know, 84 percent of SES members have
received their Agency's highest performance rating over the
past few years. As agencies strive to make meaningful
distinctions in performance when measuring the performance of
the SES, I am concerned that some agencies will apply quotas
rather than actually making meaningful distinctions.
What efforts will OPM take to ensure that agencies do not
apply quotas, which limit the number of high performance
ratings and salary increases above the executive schedule level
three?
Ms. Perez. Sir, the regulations that OPM promulgated with
regard to the SES new pay-for-performance system are very
specific in not allowing agencies to set any kind of forced
distribution or quotas, for the appropriate number of
executives rated at the highest level. It is prohibited.
When we see or have indications that an agency may have, or
that a manager may have, inappropriately sent any guidance or
anything else may be taking place, we take corrective action
and immediately work with the agencies. So, it is not allowed.
We monitor it closely, and we work closely with the agencies,
so in the event that there is any sense out there that this is
happening, that it is addressed immediately. It is not allowed,
period, end of conversation.
Senator Akaka. Ms. Larence, GAO reported last year that
agencies were not using their management flexibilities because
of a lack of policy and guidance from OPM. Since that time OPM
has held several training sessions for agencies. How would you
rate the training that OPM has provided, and is more needed?
Ms. Larence. We have not participated in that training or
really done an evaluation of that, but we have seen several
things that the agency has done. First of all, they did issue
fairly clear regulations on direct hiring and category rating
authorities. They gave some good examples in those regulations
of how human capital personnel could use those flexibilities.
They gave scenarios.
Second, they have done a lot to their Website to make it
much more user-friendly and much more helpful for Human Capital
Officers to be able to use these flexibilities.
So, we did see a number of signs where they are outreaching
to the agencies. What we have not done, though, is we have not
gone back in to see to what extent these agencies have used
these flexibilities, since our last review. So we do not know
what effect OPM's action have had yet.
Senator Akaka. Thank you for your responses.
Mr. Chairman, as your Ranking Member, I would like to join
you in that letter asking about the agencies' training program
budgets.
Senator Voinovich. Thank you.
Senator Akaka. Thank you.
Senator Voinovich. Senator Pryor.
Senator Pryor. Thank you, Mr. Chairman.
I know most of the questions I had have been asked, but I
just thought, Ms. Perez, I may ask you one about the category
rating system flexibility. It is intended to maintain veterans
preference by listing veterans ahead of nonpreference eligible
individuals.
Ms. Perez. Yes, sir.
Senator Pryor. What effect has category rating had on
veterans preference?
Ms. Perez. We have done careful analyses of the impact of
category rating in the hiring of veterans when we did a
government-wide review of veterans' issues, an audit probably
about 2 years ago, sir, and we found absolutely no adverse
impact. And, in fact, we have a report that we would be happy
to share with you that suggests that is the case. When we go
out and do our training, we are very specific in terms of how
veterans' preference applies in all of the flexibilities, and
have made a commitment in the last 3 years, a very strong
commitment not only to making sure that veterans preference
provisions are adhered to, but also that we make outreach, that
we reach out to the veterans to make sure that we make every
opportunity available to them to come into government, and to
educate them about the opportunities that are available in
government. So we take that very seriously.
Senator Pryor. So, it has had no adverse impact?
Ms. Perez. No, sir.
Senator Pryor. Thank you, Mr. Chairman. That is all I have.
Senator Voinovich. Thank you.
I want to say that I really appreciate you being here
today. A thought came to me, if we had not spent all this time
on these legislative reforms, most of the things that you
talked about would not be happening? So, I know we still have
lots of challenges, but I must say to you that I have been
impressed with what you have shared with us today. Ms. Perez,
if this is your first hearing, it was a home run.
Ms. Perez. Thank you. Thank you very much, sir.
Senator Voinovich. I am reassured that we have people like
you, Ms. Larence, in our working agencies, because you really
do make a difference. I can tell from your testimony that you
are fired up about this, and you are motivated. Thank you.
Ms. Perez. Thank you.
Senator Voinovich. Testifying on our second panel today is
Evelyn White from the Department of Health and Human Services;
Jeffery Nulf from the Department of Commerce; and Rafael DeLeon
from the Environmental Protection Agency; and Vicki Novak from
the National Aeronautics and Space Administration.
It is interesting. As my colleague, Senator Pryor, said all
four of these agencies have new leadership. Thank God we have
experienced folks working so that they can help the transition
from one new director or administrator to another.
Ms. White, we are going to give you an opportunity to
testify first, and we again thank you for being here.
TESTIMONY OF EVELYN M. WHITE,\1\ PRINCIPAL DEPUTY AND ACTING
ASSISTANT SECRETARY FOR ADMINISTRATION AND MANAGEMENT,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Ms. White. Thank you. Good morning, Chairman Voinovich and
Members.
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\1\ The prepared statement of Ms. White appears in the Appendix on
page 73.
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My name is Evelyn White, and I am the Acting Assistant
Secretary for Administration and Management for the Department
of Health and Human Services. On behalf of Secretary Michael
Leavitt, I appreciate the opportunity to appear before you to
discuss HHS's accomplishments in the area of human capital
management, and how the legislative flexibilities provided by
the Congress have been incorporated into our human capital
strategy.
I want to thank Chairman Voinovich and the entire
Subcommittee for your leadership and foresight in shepherding
the various legislative initiatives that have led to increased
efficiencies and strategic management of the Department's Human
Resources.
Much has happened since we were here last to discuss human
capital. As we reported out last year, the Department was
aggressively pursuing a strategy to achieve green status in the
President's Management Agenda for Strategic Management of Human
capital, and I am pleased to announce that HHS is one of the
first Federal agencies to achieve green status and has remained
green through the last reporting period.
Senator Voinovich. Congratulations.
Ms. White. Thank you.
In 2004 HHS submitted for certification to the Office of
Personnel Management and the Office of Management and Budget, a
new senior executive service performance based management
system. HHS was one of the first Federal agencies to submit its
SES performance system and receive approval. A centerpiece of
our new SES performance system is the linkage between
organizational achievement and the individual accomplishments
of our SES members. Recently, OPM cited our approach as a best
practice, and our SES performance management system has been
recertified for calendar year 2005.
Senator Voinovich. I want to interrupt you. It just came to
me that your former director was a former governor.
Ms. White. That is absolutely right.
Senator Voinovich. Tommy Thompson. I worked with Tommy when
I was Governor of Ohio. He was my mentor. I followed him
through the Midwestern Governors Association, Republican
Governors Association, and the National Governors Association.
This is an editorial comment, but I believe the fact that he
was a former governor gave him a lot more insight into how
important human capital management is for the success of an
agency.
Ms. White. It is wonderful to note that you know the kind
of energy that Secretary Thompson had at the Department of
Health and Human Services.
Senator Voinovich. You are lucky to have Mike Leavitt.
Ms. White. Absolutely.
Senator Voinovich. Mike Leavitt followed me through the
various governors associations. Tommy was my mentor. Then I was
Mike's mentor. This is great. [Laughter.]
Ms. White. It is wonderful. I hope you are adding those
seconds to my time here. [Laughter.]
Thank you very much.
Also, in 2005, we will be implementing a new departmental
performance management system for non-SES and nonbargaining
employees, moving away from the pass/fail system. This new
system will add greater granularity in evaluating performance,
better align performance with organizational achievement,
establish cleaner linkages with the SES performance management
system, and position the Department for future linkages between
performance and individual pay decisions.
In 2005, each operating and staff division throughout the
Department developed and submitted leadership succession and
overall workforce plans. Each identified human capital needs as
well as any gaps between current employment and future needs
and mission critical positions. These plans provide a map for
the Department's future human capital needs tied to a strategic
mission and direction for the Department.
To meet our human capital needs, we continue to use and
expand the use of flexible employment authorities. Our highly
successfully emerging leaders program which brings the best and
brightest recent graduates to work for HHS has entered its
fourth year. Our SES candidate develop program has placed
nearly 40 percent of the first graduating class in SES
positions.
HHS is reshaping our workforce, using authority approved in
the Federal Workforce Improvement Act of 2002, authorizing with
OPM and OMB approval voluntary separation incentive payments
and early-outs.
Using the Federal Employee Student Assistance Act and
separate authority granted to the National Institutes of
Health, the Department has made extensive use of student loan
repayment programs with over 1,500 employees having been
approved. The Department has crafted additional implementing
guidance to expand employee coverage and use by the various HHS
organizations, and implementation of this policy is expected in
this fiscal year.
In addition, the Department has piloted the use of category
rating. This method for selecting new employees has provided
for--in the Chief Human Capital Officers Act of 2002. I can
report our pilot has been successful in demonstrating its use
in expanding the pool of candidates for selection, and the
Department will issue implementing guidance for use in this
approach throughout the Department by the end of this fiscal
year.
The future for HHS's human capital program is bright, and
HHS will continue to be a leader in the Federal workforce.
In 2004, the Department was selected by OMB as one of five
candidates to be a Human Resources line of business service
provider. The Department will offer to other agencies across
the government end-to-end solutions that take advantage of
state-of-the-art information technology applications. HHS will
also be the first Federal department to implement a fully
electronic official personnel folder, integrated with our
enterprise Human Resources system which will allow employees
access to their personnel folder anywhere, any place, and any
time.
Also, the Department is implementing a learning management
system that provides a set of electronic tools to manage and
support employee training and development activities.
As for recently enacted human resources flexibilities, HHS
continues to adopt these flexibilities as guidance as issued by
OPM. The Department is thoughtfully and strategically
implementing these flexibilities and has developed the
appropriate internal implementing guidance. We look forward to
receiving OPM's guidance on recruitment, relocation and
retention bonuses, as well as the guidance on the annual leave
enhancement provisions of the act.
In conclusion, we appreciate the flexibilities that
Congress has provided as they have enabled the Department to
improve our effectiveness in managing our human capital
initiatives across a broad spectrum of these occupations.
Nothing is more important than to ensure that we have the right
people in the right place at the right time to meet the human
capital service needs of all Americans.
Thank you, and I will be happy to answer any questions.
Senator Voinovich. Thank you very much. I think you know
that Dr. McClellan was before this Subcommittee and did a very
good job. I found it reassuring, as I am sure Senator Akaka and
the other Members of the Subcommittee did, that they have used
the hiring flexibilities. To date, they have hired about 400
new employees, and they plan to hire another 100 more. If it
was not for the flexibilities, CMS would not be able to get the
agency ready to implement the new prescription drug. So, that
is great.
Ms. White. That is absolutely great.
Senator Voinovich. Thank you. Mr. Nulf.
TESTIMONY OF JEFFERY K. NULF,\1\ DEPUTY ASSISTANT SECRETARY FOR
ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE
Mr. Nulf. Good morning, Mr. Chairman and Members of the
Subcommittee. My name is Jeffery Nulf, and I have the pleasure
to serve President Bush as the Deputy Assistant Secretary for
Administration at the Department of Commerce.
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\1\ The prepared statement of Mr. Nulf appears in the Appendix on
page 77.
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Otto Wolfe, our Chief Financial Officer and Assistant
Secretary of Administration, has asked me to convey his regrets
at being unable to attend today due to a scheduling conflict.
But on behalf of Secretary Gutierrez and----
Senator Voinovich. I am glad you are here.
Mr. Nulf. Thank you, sir. I am glad to be here. And
Assistant Secretary Wolfe would like to thank you and thank
this Subcommittee's leadership for providing seeking solutions
to human capital issues affecting the entire Federal workforce.
I appreciate the opportunity to discuss one of the most
significant challenges facing Executive Branch agencies today--
how to compete successfully to recruit and retain a skilled and
motivated workforce through human capital flexibilities. The
potential benefits that these flexibilities offer have
significant promise, and we welcome the chance to share our
experience and learn from our colleagues here today.
The Department of Commerce consists of 13 operating units
with diverse and often highly technical portfolios, that
together foster economic opportunity both domestically and
abroad for all Americans. Congress faces dynamic challenges in
recruiting and retaining individuals with the combination of
skills and abilities needed to carry out its various missions.
This is particularly true of individuals in highly technical
fields such as physicists, chemists, statisticians and
economists, as well as Senior Executive Service (SES) managers.
We, like many other Federal agencies, must operate in a highly
competitive labor market to fill increasingly specialized
positions. This situation is exacerbated by the knowledge that
over the next 5 years roughly one-half of the Commerce
workforce will be eligible for retirement.
The potential impact that such a loss of experience and
institutional memory would have on program operations is
staggering.
Also during the next 5 years the Department faces the
daunting challenge of recruiting and training upwards of
500,000 employees needed to conduct the 2010 census.
Senator Voinovich. How many did you say?
Mr. Nulf. Half a million, 500,000, sir, Similar numbers to
the last census, sir.
Senator Voinovich. OK.
Mr. Nulf. Within the context of recently enacted human
resources flexibilities and the President's Management Agenda
(PMA), Commerce employs a cohesive strategy in meeting these
many challenges. In 2001, in collaboration with our operating
units, we conducted a first-ever workforce assessment across
the Department. Through this effort, we identified the three
most significant human capital challenges facing the Department
of Commerce: One, high turnover rates in mission critical
occupations; two, a projected surge in retirement among Senior
Executive Service managers; and three, the need to strengthen
competencies to address mission changes, technological
innovations resulting from E-government, and workforce changes
caused by various factors, such as business re-engineering and
competitive sourcing.
To help us respond to these needs, a 5-year workforce
restructuring plan was prepared with input from all Commerce
operating units, and adopted. Regular meetings with our
Principal Human Resources Managers Council, Chief Financial
Officers Council, Chief Information Officers Council, as well
as working groups at the staff level provided opportunities to
track progress in implementing the initiatives, sharing
experiences, and obtaining feedback on our common interest.
Within this framework, Commerce employs a wide range of
human resources flexibilities to meet the challenges that we
face. For example, we continue to reshape the Department's
workforce and correct skill imbalances using the new voluntary
early retirement and separation incentives, authority
provisions. To date approximately 250 employees in 7 operating
units have taken advantage of these incentives. We are also in
the process of identifying critical occupations where we will
need to request direct hire authority under the Federal
Workforce Improvement of Homeland Security Act of 2002.
Additionally, our bureaus are using the expanded authority
to pay for academic degrees as an effective tool to retain
quality employees and close skill-gaps. We have implemented the
Federal Employee Student Loan Repayment Program. Commerce
managers can use this authority, as appropriate, to compete
more effectively to recruit and retain high quality employees.
The Department of Commerce has implemented several
provisions of the Federal Workforce Flexibility Act of 2004,
which also assists managers in recruiting and retaining the
best and brightest candidates. By allowing the Department to
grant 8 hours of annual leave, in lieu of 4 hours of annual
leave, we believe our efforts to attract an elite executive
corps will be greatly enhanced.
In addition to these tools, the Commerce Demonstration
Project plays a critical role in our efforts to effectively
address current human resource challenges. Commerce has been
managing pay-for-performance systems for 17 years, first under
a demonstration project at the National Institute of Standards
and Technology (NIST) beginning in 1988. Following the success
of the China Lake experiment, this alternative personnel system
was made permanent at NIST in 1996 and served as a model for
the current Commerce Demonstration (Demo) Project.
Currently, 4,200 employees from five of our operating units
are managed through this Demo Project. The Demo Project
provides pay-for-performance in a broadbanding framework,
performance-based salary increases and bonuses, and supervisory
pay differentials.
Additionally, managers have authority to establish pay
levels, classify positions, and utilize recruitment and
retention allowances. The success of this initiative depends on
accountability, training and communication, and ensuring that
the fundamental precept of this initiative--linking pay to
performance--is a reality. Accountability hinges on continual
monitoring and evaluation. An oversight committee, the
Departmental Demonstration Project Board, provides overall
program and policy oversight to bureau-specific boards and
ensures that annual evaluations--conducted by an independent
contractor--meet OPM requirements.
Continual training and communication between supervisors
and employees on all aspects of these initiatives is crucial,
particularly with respect to performance feedback and the
mechanics of the pay-for-performance system. Our experience
indicates that any changes to employee management structures,
be they for pay or performance, are often met with a degree of
apprehension by the effected workforce, including minorities.
Concerns were expressed by some minority employees during the
pay-for-performance system roll-out, that this would result in
disparate treatment. To address these concerns, management
fully engaged in discussions with the employees voicing this
concern, as well as the affinity groups that represent their
interests.
To that end, we have enhanced monitoring mechanisms in
place to track the actual results of the Demo Project across
all affected demographics. The conversation with these
employees and the affinity groups that represent them will
continue as we collectively receive more detailed operational
results.
As a result of our most recent annual program evaluations,
we have found that salary levels and bonuses are directly tied
to performance, and that the Demo Project has had an extremely
strong effect on retaining good performers.
We are also involved in the government-wide effort to
implement pay-for-performance for our SES managers. November
17, 2004, the Department received provisional certification for
its Senior Executive Service Performance Management System from
OPM, with OMB concurrence for the last calendar year. In March
2005, we received provisional certification for this calendar
year.
As part of our SES pay-for-performance initiative, we have
instituted a rigorous performance monitoring process. At the
end of fiscal year 2004 the Department adopted a new approach
to assessing the performance of its SES managers in relation to
the performance measures established under our annual
performance plan. In meetings with the Deputy Secretary, each
bureau was called on to provide self-assessment of their
performance during the year in relation to program objective
and performance measures. Bureau input was couples with input
from the departmental staff offices. The results were used to
ensure that meaningful distinctions in performance were made,
and that performance awards and salary increases reflected
those distinctions.
In fiscal year 2004, the Department rated 49 percent of its
SES managers at the outstanding level. This was down from 81
percent in 2003; 44 percent at the commendable level, and this
was up from 15 percent in 2003; and 7 percent at the fully
successful level, up from 3 percent in 2003.
During fiscal year 2005 we are broadening the Department's
corporate focus on performance by holding quarterly reviews
with senior managers from each of the bureaus. During these
sessions--they are conducted by our Deputy Secretary--each
bureau briefs on their progress relative to implementing
management reforms under the PMA, as well as achieving their
annual performance targets and priorities. The resulting
dialogue is helping us to track performance and results on a
routine basis, allowing adjustments as may be needed throughout
the year, assuring that there are no surprises about
organizational performance at year's end.
Senator Voinovich. Mr. Nulf, would you wrap up your
testimony?
Mr. Nulf. Yes, sir. I would be happy to. I have some other
information, I hope will come out in Q and A. I would be happy
to share it, sir.
Senator Voinovich. Make sure it does.
Mr. Nulf. Yes, sir.
In closing, these represent just a few of the management
tools we are employing to meet human capital challenges.
Through these and other efforts I am pleased to report that
Commerce recently achieved a green score card for Strategic
Human Capital Management initiative under the PMA. That
accomplishment, which is the result of a lot of hard work by
the human resources management team, as well as the leadership
of Commerce, is very rewarding. We recognize, however, that
this rating is clearly not an end in and of itself, and that
continued improvement is not only possible but essential to
ensuring that we are able to carry out our evolving missions
through a skilled, knowledgeable and dedicated workforce.
Again, I would like to thank the Chairman and this
Subcommittee for their leadership in developing flexible and
workable solutions for addressing current human capital
concerns, and I would be happy to answer your questions, sir.
Senator Voinovich. Thank you very much.
Mr. Nulf. Thank you, sir.
Senator Voinovich. Mr. DeLeon.
TESTIMONY OF RAFAEL DELEON,\1\ DIRECTOR, OFFICE OF HUMAN
RESOURCES, ENVIRONMENTAL PROTECTION AGENCY
Mr. DeLeon. Chairman Voinovich and Members of the
Subcommittee, I appreciate the opportunity to appear before you
today to discuss EPA's efforts in utilizing the recently
enacted flexibilities to address our human capital challenges.
I will be summarizing my comments, and thank you for including
them in the record.
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\1\ The prepared statement of Mr. DeLeon appears in the Appendix on
page 86.
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Let me preface my specific comments by saying that we at
EPA are extremely proud of all of our human capital efforts,
many of which were under way even before the current
President's Management Agenda. At EPA, we consider our
employees our greatest resource, and we value their dedication
and commitment to the Agency's work. It is only through our
people and the skills and knowledge they possess that EPA is
able to achieve its critical mission of protecting human health
and the environment.
EPA's senior leadership has a longstanding commitment to
human resources and human capital initiatives. We also have a
strong record of identifying, anticipating, and addressing
workforce needs and challenges. To that end, EPA employees,
managers and supervisors have been asked to thoughtfully focus
not only on what environmental results must be achieved, but on
how those results will be achieved through the talent that we
recruit, retain and develop every day.
At EPA we devote a lot of time and money to our most
critical resource: The people who are responsible for the
success of the Agency's efforts. For example, in 1999, EPA
conducted a workforce assessment project which projected
anticipated workforce needs out to the year 2020. EPA developed
our first comprehensive human capital strategy in the year
2000, and then we revised it in 2003. The Agency's 2003 through
2008 strategic plan and our ``Strategy for Human Capital II,''
provides the basis for much of our human capital planning and
decisionmaking.
The pieces of legislation that you have championed and
authored have helped EPA address workforce needs and challenges
in several years. The Homeland Security Act of 2002, which
provided for our current early-out and buyout authority,
allowed EPA the ability to reshape and restructure our
workforce. At EPA in 2003, and again in 2004, we made early-out
and buyout offers to a number of GS-14s, GS-15s, SESers, and
members of the administrative and clerical staff. The resultant
early-out and buyout vacancies have been utilized to
restructure positions at lower grades in different series, or
to bring new talent in.
In 2005, we will base our decisions on whether to offer
additional early-outs and buyouts on local-level workforce
plans, plans developed and tailored to meet specific program
and regional needs. The early-out/buyout program has been a key
tool of the flexibility provided by the 2002 Act, and
represents just one of several strategies and solutions we are
employing to address talent gaps.
Other strategies have included our environmental intern
program and our leadership development programs. Similarly, the
Senior Executive Reform Act strengthened the relationship
between performance and pay of senior employees. In July 2004,
OPM issued regulations that established the criteria that an
agency's performance appraisal system must meet in order to be
certified to use higher pay limits.
In August 2004, the Agency requested provisional
certification of our SES appraisal system. I am pleased to
report that EPA was among the first to submit such a request to
OPM, and was one of only a handful of Federal agencies to
receive approval in October 2004.
We have submitted a request to OPM to renew EPA's
provisional certification for the SES system in 2005.
Meanwhile, with an eye towards full certification, we are
making revisions to strengthen the SES performance system, and
we are evaluating the results of the fiscal year 2004 appraisal
and recognition process in an effort to improve it.
We are also benchmarking the pay plans implemented by other
Federal agencies to find best practices to incorporate into our
pay plan as appropriate.
We view strengthening the linkage between performance and
pay as an important tool for recognizing and retaining high
performing senior employees.
The student loan repayment program allows agencies like EPA
to repay certain federally insured student loans to recruit or
retain highly qualified personnel. I am happy to report that
EPA has used this act to attract and retain top employees. Of
course, payments for this program come from EPA's PC and B
accounts, so Agency supervisors and managers must carefully
balance their responsibility to manage basic salary and benefit
requirements with the opportunities provided by this program.
In fiscal year 2004, the Agency repaid $51,000 in student
loans for seven employees. In 2005, the Agency has 18 student
loan repayment agreements in place.
These flexibilities have also established numerous changes
in pay and leave administration as well as benefits policies.
Members of the Senior Executive Service and employees in senior
level and scientific or professional positions became eligible
to immediately accrue annual leave at the rate of 8 hours for
each biweekly pay period. I am also happy to report that EPA
has used this authority to attract and retain senior level
employees.
Finally, a new section 4121 has also been added to Title 5,
requiring agencies like EPA to regularly evaluate their
training programs. EPA has focused attention in this area. Each
of our developmental programs is reviewed for effectiveness on
an annual basis to assure the information shared is current and
accurate. Full evaluations have been performed on EPA's SES
candidate development program, selection and placement process,
the mid-level development program, and the EPA intern program.
All programs are evaluated at level one for immediate impact on
the participants and for level two, level three, and four.
In conclusion, we at EPA are pleased with our record of
success in the human capital area, and we are continually
striving to improve on that record.
Thank you for allowing me the time to address you today. I
am happy to take your questions.
Senator Voinovich. Thank you very much. Ms. Novak.
TESTIMONY OF VICKI A. NOVAK,\1\ ASSISTANT ADMINISTRATOR FOR
HUMAN CAPITAL MANAGEMENT AND CHIEF HUMAN CAPITAL OFFICER,
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
Ms. Novak. Good morning, Mr. Chairman and Members of the
Subcommittee. I am Vicki Novak, the Assistant Administrator for
Human Capital Management at NASA and NASA's Chief Human Capital
Officer. I am delighted to represent NASA here this morning to
discuss our use of new workforce flexibilities, senior
executive pay-for-performance implementation, and the use of
voluntary early retirement and voluntary separation incentive
payment authorities. I have submitted a written statement for
the record, which I will take a few minutes to summarize, if I
may. Let me begin, however, by expressing our appreciation, as
others have done here this morning, for your leadership and
support in the area of Federal human capital management, both
government-wide and on behalf of NASA. We appreciate all that
you have done and look forward to continuing to work with you.
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\1\ The prepared statement of Ms. Novak appears in the Appendix on
page 91.
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As I and others have testified in the past, NASA has
recognized for some time the internal demographics and external
drivers that present a challenge to our human capital
management. Some of these, such as an aging workforce, a wave
of pending retirements, and skills imbalances, we share with
many other agencies. NASA's situation is exacerbated, however,
because scientists and engineers (S&Es), make up approximately
60 percent of our workforce, and we are competing for S&E
talent in a labor market that studies reflect face declining
numbers of S&E graduates while the demand for such talent in
the public and private sector continues to increase. We have
been actively engaged in a number of programs and initiatives
at NASA to help us manage our human capital more strategically.
We continue to enhance the Agency's competency management
system as part of our overall workforce planning and analysis
capability. The competency management system provides NASA our
first ever Agency inventory of workforce competencies needed to
accomplish our mission using a consistent set of competency
definitions.
To ensure that the Agency's workforce competencies are
aligned with our mission requirements, we complete an annual
assessment in connection with our strategic planning and budget
process. Using the competency management system, we identify
the competencies and full-time-equivalent levels needed for
current and future program requirements. We identify the
competencies available in the workforce, project the
competencies that will be available in the future, and
determine the difference or the gap. Using these analyses, we
develop recruitment, retention, development, and realignment
strategies to address actual or projected competency gaps and
surpluses in specific areas. For example, we may find that in
some areas we need to strengthen our student programs and build
the pipeline of talent. In other areas, targeted training and
development may be needed, and in yet other skill areas we may
need to redeploy employees to programs in which their skills
are better utilized.
As an example, mindful of our need to maintain a pipeline
of fresh talent, last year NASA's centers collaborated in 19
recruitment events on college campuses as part of our corporate
recruitment efforts. This resulted in 96 diverse hires using
the Federal career intern program flexibility.
The new SES pay-for-performance system has enabled us to
recognize the contribution to the Agency's performance of our
top-performing SES members while it provided needed relief from
pay compression. Our SES system has been provisionally
certified for 2005. In implementing the new pay regulations, we
established strict ground rules to ensure that pay increases
were based on contributions to Agency success and to ensure
that increases were only given to the best performers.
In addition, we have strengthened our SES performance
appraisal system to be more results-oriented, to assure greater
accountability, and to create an even better linkage to the
NASA strategic plan.
The workforce flexibilities recently enacted provide us
with valuable and versatile tools to address NASA's workforce
management needs. This versatility is vitally important since
different solutions are needed to address the variety of human
capital challenges facing our Agency, challenges that are
shaped by each center's demographics, local labor market, and
program project needs. As mentioned in my written testimony,
under the NASA Flexibility Act of 2004, the use of enhanced
recruitment and relocation bonuses, more substantial travel
benefits, and enhanced annual leave flexibilities have been
very useful incentives in attracting new talent. The
distinguished scholar hiring authority, more flexible term
appointments, and more flexible SES term authority provide for
more streamlined and flexible hiring. Enhanced relocation and
retention bonuses, qualifications pay, and the ability to
convert term to permanent appointments have been valuable tools
in retaining and leveraging existing talent.
The Federal Workforce Flexibility Act offers many of the
same or very similar tools as those provided in the NASA
Flexibility Act. Many of these flexibilities are and will
continue to be important to NASA in reshaping and realigning
the workforce to support the new Vision for Space Exploration.
For example, we are currently using the buyout and early-out
authorities provided in the workforce improvement of the
Homeland Security Act of 2002 to encourage voluntary attrition
in areas in which the need for certain competencies has
diminished. We are using these tools to address workforce
rebalancing both within individual centers as well as across
the Agency in a managed, strategic way, and we have developed
our buyout/early-out plans very carefully and deliberately to
ensure that we do not buy out competencies that we still need
or will need. We will continue to use hiring authorities and
other incentives strategically to attract high-quality
employees, as I alluded in my written testimony, and relocation
and retention bonuses will be increasingly important in
addressing workforce reshaping objectives, including space
shuttle transition and retirement in 2010.
In conclusion, with the new Vision for Space Exploration
comes an increased challenge to continue to be strategic and
innovative in human capital management. NASA must implement a
number of fundamental changes in how the Agency approaches
space exploration and better align the workforce to achieve the
new vision. The workforce flexibility tools being addressed
today are essential to ensuring that we reshape and maintain a
high-caliber workforce with the skills and competencies we
need.
Let me close by saying again we greatly appreciate the
excellent support you have provided in Federal human capital
management in the past, Senator Voinovich, and we welcome your
leadership in the future. I am happy to answer any questions.
Senator Voinovich. Thank you very much. It has been very
educational to see what all of have you tried to do with the
new flexibilities.
All four of you have achieved a level of certification for
your performance management system, the Senior Executive
Service. What steps has your agency taken to include employees
in development of the system? What has been done to educate
employees on the new system? This is a real issue for the
Members of this Subcommittee. We support pay for performance,
but we want to make sure that it is done right. I think there
are a lot of people who like to talk about this, but anyone who
has had to complete performance evaluation, as I have over my
career, know this is tough. It was one of the toughest things I
had to do, and I would be interested in knowing how you went
about implementing these new systems in your respective
agencies and receptivity so far.
Mr. Nulf. Mr. Chairman, I would be happy to speak to that.
I think it gets back to what you were speaking with the first
panel on and your commitment to training and your commitment to
throwing the resources behind it that are necessary to make it
effective. I think pay-for-performance--if I may say, I am a
private sector guy that is down here learning in many different
ways, but I come from a world of pay-for-performance, and what
it has done is put us on a level playing field with the private
sector and the recruitment and retention of valuable human
capital. And what we have done is to make sure that the
employees are involved in all aspects of pay for performance.
If it is transparent, sir, and all parties are involved--that
being the employee, management, and leadership--everyone is
well served, including the taxpayer. Our commitment to that on
the training side is, I believe, second to none.
Senator Voinovich. Ms. White.
Ms. White. I will be happy to answer as well. When we
started in about 2001 looking at performance-based approaches
to how we would have some accountability for our senior
leadership at the Department, starting from the top all the way
through SES, we brought a contractor in to help us to develop
performance-based contracts for our SES members, and from that
the employees were able to participate to talk about and
describe what their work responsibilities were as related to
their mission, so we wanted to make sure that mission
criticality was of the utmost importance in the way that their
performance plans were being developed.
In addition to that, we have a structure at HHS that is
called the Management Forum. It consists of the executive
officers across all the agencies at HHS, and at that monthly
meeting, the group has an opportunity to help weigh in, to help
shape the policies in the direction with respect to as well as
the education of rolling out our SES performance-based system.
We meet annually also to develop the elements of what will go
into the outcome-based measures that we will hold our SESers
accountable for.
In this year, we will be cascading this performance-based
system to the non-SES employees and non-bargaining unit
employees. We intend to use a similar approach for employee
involvement, and management, and pushing the information out in
a training environment to get people hands-on opportunity to
learn what the new requirements will be.
Senator Voinovich. Mr. DeLeon.
Mr. DeLeon. Yes. I think the one thing I would like to add,
along with my colleagues, is at EPA, when we talk about
performance, we have always had a strong SES performance
management system, and along with OPM's help this past year in
reaching certification, we discussed the standards very closely
with our senior managers, with boards like the Executive
Resource Board or our Human Resource Council----
Senator Voinovich. Let me understand this. Have you had a
pay-for-performance system in the EPA for a long time?
Mr. DeLeon. No. I believe we have had a strong system
already.
Senator Voinovich. You have a robust performance management
system for a long time?
Mr. DeLeon. Yes, and along with the----
Senator Voinovich. But not linking pay with performance?
Mr. DeLeon. No. And in this past year, along with OPM and
receiving provisional certification, we ensured that our
standards met the performance that we wanted our senior
executives to meet, so we have had some strong internal
discussions what those standards should look like, what are
SESers' performance standards and the expected level of
performance that they should meet. We have used boards
internally, like the Executive Resource Board and others, to
help develop those standards. I think if you look at results of
our most recent performance cycle, you will notice that we have
had some differentiation not only in the bonuses, but also in
the performance and the pay raises that we were able to
institute this past year.
Senator Voinovich. Ms. Novak.
Ms. Novak. Yes. I can say that we have done many of the
same things at NASA, but we took kind of a top-down approach,
making sure that the senior leadership of the Agency understood
the new SES pay-for-performance system and what the
expectations were and the accountability requirements. Then we
basically rolled that out at our field centers, using senior
management as well as a lot of involvement of the human capital
officers at our field centers.
Senator Voinovich. Have you conducted demonstration
projects at NASA?
Ms. Novak. No, not really. We pilot things and test things
but not actually demonstration projects in the official sense
of the word.
Senator Voinovich. Did you have a performance management
system for your engineers?
Ms. Novak. Well, we have always had performance evaluation
of our engineers, both at the senior executive levels, as well
as at the non-senior executive levels. We have changed our
performance appraisal approach from time to time, engaging the
unions and engaging the employees. In fact, last year we
changed from a pass-fail type of a system to a three-level
performance appraisal system. But we engage the unions and get
their help and support, and that helps us with all of these
different new initiatives that we roll out.
Senator Voinovich. This is my last comment. It came to me,
Senator Akaka, and Senator Pryor, that right now DOD is
developing the regulations for a new personal system. It might
be interesting to have a summary of what these agencies have
done to prepare effective performance management systems, to
see how their experience might assist to the discussion between
the unions and DOD. In other words, these agencies have
actually done it. It seems to me that it would be in DOD's best
interest to fully understand how these systems operate, so
their regulations are responsive to the real world. I think it
would help them right now. I know the unions are concerned and
maybe sharing the experiences at these agencies would be
beneficial.
As a matter of fact, if you would identify in your
testimony, the steps you have taken to allay the fears of
individuals. Thank you.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman. The brief
discussion here leads me to ask this question first. Ms. Novak,
I am glad to hear that you have been engaging the unions in
this. I have heard from employees at NASA that individuals
hired under NASA's flexibilities have not been allowed to join
a union even though they are clearly part of a bargaining unit
where they work.
Let me be clear. It was not the intent of Congress in
granting NASA personnel flexibilities to bar NASA employees
from joining unions or to erode employees' collective
bargaining rights. Are employees hired under the NASA
Flexibility Act barred from joining unions? And if so, why?
Ms. Novak. Sir, I am shocked to hear that, to be very
honest, and I am clearly going to look into that.
No, absolutely not. Of course, we have bargaining unit
positions and some that aren't, and depending on the nature of
the position, and, of course, we have several different unions
that we have union members representing. We are using some of
the flexibilities to bring people on board, to hire people, and
there should be no bar whatsoever to those individuals. If they
are otherwise available to join a union, that should be no
impact. So I will clearly check into that, and maybe we could
talk or I could talk with your staff and get some more details.
Senator Akaka. Thank you for your response.
Ms. White, you testified that HHS has a pilot program using
the category rating method for selecting new employees. I want
to follow up on Senator Pryor's question to Ms. Perez as to how
veterans have fared under the category rating at HHS. As
ranking member of the Veterans' Committee, ensuring the rights
of our veterans is very important to me. Category rating was
used in demonstration projects for several years at USDA, and
the impact on veterans was positive.
How have veterans fared under category rating at HHS?
Ms. White. I can tell you that the pilot that we ran was
with National Institutes of Health and with the Centers for
Medicare & Medicaid Services, and we thought if we could have a
successful pilot in those two organizations, it will work
anywhere. And I am proud to convey that the pilot was very
successful. NIH ran its pilot from June 2004 to March 2005.
They included eight different kinds of vacancies, and they are
the one of the high scientific organizations at HHS. And CMS
started its pilot in January 2005 to present. And while they
have only offered up one vacancy up to this point, they yielded
10 different hires from that process. The veterans float to the
top of each qualifying category and, as such, would be selected
in the category that they fall into. And we make sure that it
is not only important to protect the rights of veterans but to
make sure that the processes we have provide that same
assurance.
And so we are looking forward now to implementing the
category rating process across the department.
Senator Akaka. Thank you.
Ms. Novak, among the flexibilities granted to NASA through
the NASA Flexibility Act was the authority to implement a
scholarship-for-service program. This program is similar to one
I championed for national security positions that was included
in the Intelligence Reform Act which became law in December.
What is the status of NASA's scholarship-for-service program?
Ms. Novak. Senator Akaka, thank you for asking that. We
have an assistant administrator for education. Her folks are
doing the staff work associated with that, but I can tell you
what the status is. They are in the process of very shortly
briefing our new administrator, Dr. Michael Griffin, on that
and publishing some regulations. Hopefully the plan is to have
an estimated 20 students on board in the program in the fall
time frame. We are going to increase the numbers with each
year, that is my understanding, but hopefully in the fall that
will actually be kicked off.
Senator Akaka. Thank you. Mr. Chairman, my time is almost
up. I have a question for the rest of the witnesses, but I will
be glad to ask it in a second round.
Senator Voinovich. Why don't you go ahead and ask now.
Senator Akaka. All right. Ms. White, Mr. Nulf, and Mr.
DeLeon, I just discussed the scholarship-for-service program
with Ms. Novak. Do you believe that a similar program would be
helpful to recruit employees for your respective agencies
provided there is adequate funding? Mr. Nulf.
Mr. Nulf. Not knowing all the details of the program
itself, sir, but I will speak at a level that I am comfortable
with to say that first hearing of it and getting a better
understanding of it, I might speak more to the details, but I
would say this. We are such a diverse organization, Commerce,
and our needs cross more spectrums and vocations than one can
shake a stick at. And that being said, the more tools and the
more flexibilities and the more capabilities we have to bring
in via scholarship or grants or what have you the youth of
America into the walls of Commerce, the better off certainly we
will be served in the long run.
So my short answer would be, yes, sir, it is something that
we would be very open to and would be interested in discussing
further.
Senator Akaka. Thank you. Ms. White.
Ms. White. I would be interested in knowing more about
NASA's program, but we think at Health and Human Services we
have a number of programs that fit that kind of model. Whether
they are called service fellows or scholarship for service or
things of the like, our health organizations and our National
Institutes of Health use those kind of authorities very
extensively.
As you might well know, the importance of getting in people
who have the top-level research that we need for National
Institutes of Health and doctors that will help us carry out
our mission requires us to be innovative in how we outreach to
individuals who have the skill sets where we would have to
offer some monetary incentive for them to not only come but to
stay in our organizations. And sometimes being a part of
premier scientific organization by itself isn't enough, and,
therefore, I think one of the reasons that NIH is able to yield
so many of their employees that were approved for the student
loan repayment which represents the bulk of that 1,500 that I
mentioned earlier. Their payment is roughly $49,000 per
employee. I think this is similar to the model that NASA may
have, but I would be happy to look into that to see if we could
add another to the group of programs that we have currently.
Senator Akaka. Thank you. Mr. DeLeon.
Mr. DeLeon. Yes, similar to my colleague's comments, I am
not familiar with the specific program for NASA, but we have
talked about a similar program, an environmental fellows
program, where people would come in for service, that type of
program.
And I would say that if we had the authority and certainly
the resources to implement such a program, we would be very
interested in pursuing something that was applicable to EPA.
So, yes, thank you.
Senator Akaka. Well, thank you for your responses. I know
the Chairman and I look forward to the time--and maybe it is
happening now--where different agencies will be able to talk to
each other about some of these programs and share best
practices instead of starting from zero so that we can all
benefit from each agency's experiences.
Thank you very much, Mr. Chairman.
Senator Voinovich. Thank you, Senator Akaka. Senator Pryor.
Senator Pryor. Thank you, Mr. Chairman.
Senator Voinovich. Senator Pryor, I want to say thank you
very much for coming. Senator Akaka and I usually hold down the
fort. You are very nice to us to show up.
So that people know, there are many Members of this
Subcommittee concerned about this issue. The problem in the
Senate today--and the public should know it--is we could all be
at three different places at the same time and all of them
justified. We are constantly prioritizing what we have to do.
In my particular case, I am the Chairman of the Subcommittee. I
have to be here.
Senator Akaka, God bless you. He is here, and some of our
other Members try to come in and help us out. And I don't want
you to get the impression that people are not concerned about
this, but that is the way it works here in the Senate.
Senator Pryor.
OPEN STATEMENT OF SENATOR PRYOR
Senator Pryor. Thank you, Mr. Chairman, and once again I
thank both of you for your leadership on these very important
issues, and these are not issues that always make the
headlines, but this is the nuts and bolts of government. And
you are both very committed to try to improve government, make
it run more efficiently and more effectively, and I join you in
that, and thank you for having me today.
Let me just jump right in, if I may, Ms. Novak, and ask you
about NASA. Has NASA found the OPM 45-day hiring model to be
realistic for all administrative positions?
Ms. Novak. We have found the 45-day model to be realistic
for a good number of our positions. We are fortunate we have an
automated staffing and resume recruitment system, which allows
us to run vacancy announcements and get through that whole
process pretty quickly, most often meeting the 45-day
requirement.
Senator Pryor. When you say a good number, what type of
positions does the 45-day model not work for?
Ms. Novak. In some cases for those that are very technical
and that require a wide search, looking for very specific
technical qualifications, of which we have a good number.
Senator Pryor. That is why I ask you the question. And I
see a couple of heads nodding here on the panel. That is also
your experience as well?
Mr. DeLeon. Yes.
Ms. White. Yes.
Mr. Nulf. Yes.
Senator Pryor. Sometimes, in some cases, the more technical
or the more precise the requirements are, the 45-day
requirement may not always work.
Ms. Novak. One size doesn't always fit all.
Senator Pryor. But, nonetheless, do you like the 45-day
model?
Ms. Novak. I think it works fairly well. I will go beyond
that. I think it is a good model, and I think that is one of
the complaints we get from individuals interested in the
government, as well as from people within the government, that
it takes too long to hire. I think we need to have some
guidelines to strive for. If we can go through that process in
45 days, for most cases we are doing very well.
Senator Pryor. Good. And let me ask you this: I know NASA
and others have had funding cuts. Have the funding cuts
adversely impacted your ability to hire and train?
Ms. Novak. Actually, at NASA, we have not had funding cuts
per se in terms of our overall budget. We are doing some
rebalancing and restructuring internally, which has created
some challenges for us in the workforce where we have got some
positions in certain areas where they are not attached to
programs that are funded right now. We are working some
rebalancing issues. We are working buyouts and early-outs,
looking at the possibility of employees moving across field
center geographic lines, if it is appropriate, if they want to
go, to try to take care of our situation.
Senator Pryor. Is that true with the rest of the panel?
Mr. DeLeon. If I may, I would say in certain of our regions
funding has been--or budget cuts have provided some challenges
for the regional folks to meet their headquarters folks, but
for the most part our training dollars have been OK. It has
been more in the hiring with some budget cuts.
Senator Pryor. OK.
Mr. Nulf, over at Commerce, you talked about the
Department's use of academic degree training. To what extent
are these educational opportunities contributing to your
strategic plan?
Mr. Nulf. It is a bureau-by-bureau impact, sir, but for
those that do require it and need the specific targeted
recruitment and it is specialized towards particular academic
background, the flexibilities that this Subcommittee has seen
to and provided to Commerce has enhanced our capabilities.
Senator Pryor. Let me ask the panel generally about the
fear of lawsuits, the fear of litigation, especially when it
comes to the direct hire piece of this, and I guess to some
extent category rating flexibilities.
What have your respective agencies done to overcome the
fear of being sued in the direct hire context, and is that a
legitimate concern? Have you seen lawsuits or the threat of
litigation in your agencies? Why don't we start with you, Mr.
Nulf.
Mr. Nulf. Well, I think any good organization, which I
believe Commerce to be, has an effective risk management
program, and leadership, it should be one of the first things
they think about from the standpoint of protecting the
organization and making sure we are able to accomplish our
mission.
Having said that, I don't think that there is a hesitancy
necessarily to do or to approach or evaluate any programs,
whatever they are, category rating or direct hire authority. I
think as Marta spoke to earlier, it is choosing those
flexibilities, those tools that are in the toolbox that best
position you to do your job. So I wouldn't say it is
necessarily due to risk management perspective of avoiding
lawsuits. It certainly is reality in today's environment that
you have those considerations, yes, sir.
Senator Pryor. Does the rest of the panel have anything to
say on that?
Ms. White. I would just like to say that I don't have any
information that would point to any litigation or lawsuits with
respect to direct hire category rating, but I think one of the
fundamental things we have to bear in mind is that even though
these flexibilities allow us to hire quickly, it does not
relieve us of our responsibility of making sure that people are
qualified who are coming through that review process, whether
it is expedited or not, and that is the way we provide the
assurances in both direct hire and any category rating.
Senator Pryor. Thank you.
Mr. DeLeon. And we haven't seen any increase in the
litigation risk in either of those two areas, direct hire or
category rating.
Ms. Novak. Just to end that conversation, in terms of the
use of the legislative provisions that we received in the NASA
Flexibility Act, we have put in place safeguards to make sure
that, in spite of the flexibilities, merit principles are being
addressed and we are not violating prohibited personnel
practices essentially. So I don't think we have a problem in
that area at all.
Senator Pryor. Thank you, Mr. Chairman.
Senator Voinovich. Thank you. I would be remiss, Ms. Novak,
not to ask you about NASA. I have written to the acting
administrator, and I have talked to the new administrator. I am
concerned with NASA attempting to reshape their workforce while
moving away from aeronautics to fulfill the President's mission
to Mars and the moon. I am concerned that at NASA's Glenn
Research Center and Ames Research Center, notices have been
sent to employees indicating they can take early retirement or
a separation payment.
It looks like NASA is projecting this will happen. I know
many of us are going to work very hard to make sure that
aeronatutics research is minimized at NASA. What bothers me is
that NASA is anticipating Congress will agree with the new
mission proposed by the President. However, if Congress funds
aeronautics research these people will be needed.
Ms. Novak. Right. Yes, sir, I expected that you might ask
me this question, and it is a very important one. I saw just as
I was coming up here today a newspaper article that came out
this morning. Our Deputy Administrator, Fred Gregory, testified
yesterday, and in the testimony I see that there has been a
discussion about relooking at some of the aeronautics issues. I
know our new Administrator has talked about we need a national
aeronautics policy, much as we have a space exploration policy.
So there may be some additional conversations about this,
but I think what you are referring to, Senator, is we have used
buyout and early-outs at the Ames Research Center and at Glenn
Research Center and, in fact, throughout the Agency recently.
It may appear as though that has been capricious and arbitrary
and maybe we are stepping up prematurely, but there actually
has been--and maybe it hasn't been communicated to the
employees as effectively as it needs to be, but there has been
a lot of analysis behind that and discussion between the
centers and the mission director organizations in Washington,
and there have been some programmatic changes. As a result of
those programmatic changes, there have been identified some
competencies, some areas or competencies where we believe we
either need to diminish those or we won't need them in the
future, and in some areas there are some we need to beef up.
So what we are trying to do using the early-outs and
buyouts is to do some rebalancing and restructuring in a smart,
deliberate way as opposed to arbitrary and capriciously, and it
is not supposed to be a signal at all that this means we are
going out of business.
Senator Voinovich. The only comfort I have is that I have
seen projections on the number of people you expect to take
advantage of the buyouts. And as a matter fact, less people
have taken advantage than you anticipated.
Ms. Novak. Yes, that is true.
Senator Voinovich. So that part of it gives me some
comfort, and we are going to be staying on top of this.
Ms. Novak. Yes, sir, and I know NASA is going to be looking
hard at that.
Senator Voinovich. The other thing I would like to mention
is that there are some Members of Congress who feel agencies
need more workforce flexibilities. Do you believe at the
present time you have the flexibilities that you need in order
to retain and to attract the best and brightest people to the
Federal Government?
By the way, one of the enacted reforms that really
interests me, Senator Akaka, is changes to annual leave. I
looked at the statistics about why mid-career professionals
from the private sector wouldn't work for the Federal
Government. One of them is they have got to work 13 years
before you get a month's vacation.
Mr. Nulf. Yes, sir, that is correct.
Senator Voinovich. Reforming this has made a difference,
hasn't it? It is just amazing. It is just a simple thing, but
it deals with the human aspects of a job. I think maybe it was
you, Senator Akaka, who talked about the human things are the
most important. Things like annual leave, family leave, and
flexible time.
Mr. Nulf. I guess I could start us off. We have the tools
to do our job, sir. You have positioned us well. I think that
there are certain flexibilities that are currently there that
are not being fully utilized, that as the agencies--I will
speak for mine--as the Agency and as the managers become better
trained and more effective when to pull the trigger on certain
things, the more you will see the numbers. I would agree with--
one of my colleagues earlier talked about the fact that the
numbers are not necessarily the whole story. But the fact you
have a number of things that you can go to to try to bring in
that right person for that right job to fill it is absolutely
invaluable, and I would go one step further. When you talk
about the family things--and, again, I am one of these folks
that came in and was wrestling with those things, of being away
from family and things of that sort. And what you have done,
again, there is you have put us on a level playing field,
gentlemen. You have put us on a level playing field to compete
with the private sector so that it is more than just being able
to, which is extremely important, to serve the government and
serve the taxpayer, but actually you are not having to have
just one or the other. You can still have a family life and you
can still carry on with things that are priorities in your
life.
Senator Voinovich. Thank you. Ms. White.
Ms. White. We appreciate the flexibilities that you have
championed under your leadership, and we are aggressively
pursuing those. We also are going to pay a whole lot more
attention to some of the processes that come with the
flexibilities to ensure that they do not stand in the way of
yielding the desired result that the flexibilities were
intended to give. We are going to see if we can't match up the
GS-5 and GS-7 hiring processes so they can be matched with
those that we use for the career intern program for emerging
leaders at GS-9 and GS-12.
Mr. DeLeon. I think the short answer is yes from EPA's
perspective. We appreciate all of the authorities that have
been instituted lately. As my testimony shows, we have used
quite a number of them to affect our workforce and to bring in
new talent. So we appreciate all your effort and leadership and
look forward to your continued----
Senator Voinovich. Yes, but the issue is, is there
something else that would make a big difference?
Mr. DeLeon. Well, I think the one program that I would like
to explore with my colleague from NASA is the program that she
mentioned as an added flexibility that we can utilize at EPA.
Senator Voinovich. By the way, I like the competencies
assessment that you do. I would encourage all agencies not only
to do this but incorporate it as part of their GPRA report.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman. Just to
comment on what I said in terms of keeping workers happy, I was
mentioning travel and how we provided compensatory time for
employees traveling outside their normal work hours. So I think
we need to continue to review all these policies and see where
we can be more flexible on some of these that have been around
for years. I look forward to doing that.
Ms. White, you testified that HHS has over 1,500 employees
approved for the student loan repayment program and will expand
employee coverage for fiscal year 2005. In this regard, this is
what we have been talking about. We are concerned about what is
going to happen in a few years when the baby boomers retire.
There will be a demand for workers. And, of course, we hope the
demand is satisfied by the right people for the right jobs, but
some of these people will require additional training or
education.
The student loan repayment program, I feel, will play a
major role. I strongly support student loan repayment programs
and believe them to be one of the most attractive recruitment
incentive tools for the Federal Government.
Also, as an aside, I believe that a student loan repayment
program can help employees learn a foreign language for their
work.
So I am asking you, Ms. White, would you discuss the
student loan repayment program at HHS, including the average
award, the criteria for selection, and how HHS jumped from 38
participants in fiscal year 2003 to 1,500 in fiscal year 2005?
Ms. White. Well, we have the National Institutes of Health
to thank for that. They have a separate authority, separate
from the one that your numbers were derived, and I did not mean
to imply that the 1,500 was across the entire department. It
was my reason for indicating that NIH had a separate authority.
Approximately 1,450 of the 1,500 do come from the NIH's
special authority for student loan repayment, and they pay
anywhere up to about $49,000 per employee under their special
authority. They hire more doctors and research fellows and
those in job categories with the higher student loan repayment
balances than most other individuals who may come through, so
they have separate authority.
With respect to other organizations at HHS, they do have
the authority to use their own repayment program, but we want
to provide them additional guidance about how they might look
at it from a strategic perspective, so they can expand their
use beyond the small number that currently exists, but make it
relevant to their organization.
We have not had tremendous difficulty recruiting our
talent. It is evident in our success with the emerging leaders
program. The first year we ran that program we had 8,000
applications. And every year beyond that we have had at least
2,000 or 3,000 applications for the emerging leaders program.
However, the incentive with respect to the student loan program
would not have necessorily provided the incentive to generate
applications at a similar magnitude.
Once hired, what we look at is a way of trying to retain
the individuals that have come through the emerging leader
program, and paying a student loan is one of the most
attractive ways that we can leverage to provide an incentive
for them to stay and for us to have that high talent in our
organization for time to come.
Our employees sign a service agreement to stay employed
with our Agency for every year of student loan repayment that
we authorize.
Senator Akaka. Thank you. Mr. Nulf, would you care to
comment on that?
Mr. Nulf. I will be very candid, sir. We do not have the
numbers, as my colleagues do here at this table, in regard to
student loan repayment. I would say this: That is something
that we have turned our attention to and are focus and
committed to having numbers that this Subcommittee would be
proud of. We have a number of folks we are talking to in the
recruitment, in the pipeline that I think will bear fruit
shortly, but we have not effectively used it as the retention
tool that it needs to be. We are going to do so and believe it
is one of the stronger weapons you have given us to do our job.
We need to focus more intently on it, sir.
Senator Akaka. Ms. Novak, given the fact that NASA has and
needs a highly trained workforce, I am curious why NASA only
awarded student loan repayments to about 40 employees. Is that
number correct?
Ms. Novak. Yes, sir, that is the number I have also.
Actually that is a good question. I guess I looked at it a
little bit differently. We use our flexibilities, judiciously,
when we really need them. We don't necessarily offer them
across the board, but with the 40 we have identified a number
of those--more than half of those are for contract acquisition
and contract management type individuals, which have been
identified as one of our critical competency areas. That is an
area that we want to make sure that we recruit and develop and
retain individuals in that particular area. So a good portion
of those 40 have been in that particular competency area.
I believe that we have used them, again, judiciously, when
we have needed to use them.
Senator Voinovich. Let me ask a question to follow up on
this. Maybe there is process or something here we don't know.
When using direct hire, you get permission to hire on college
campuses?
Ms. Novak. Well, I know that you can direct hire
individuals in certain specified occupations. That is, if you
have made a case that it is very difficult----
Senator Voinovich. You have to ask OPM formally.
Ms. Novak. Right. We don't have any of those per se at this
point in time, but what we do is, in discussing people, we will
go through another process as opposed to direct hire, but we
will be talking with them early on about what are some of the
things that we can offer you through the Flexibility Act or
otherwise that would make coming to NASA a positive experience
so that we can nab them and bring them in. The student loan
repayment program clearly is one of those.
Senator Akaka. Mr. DeLeon, you testified that in fiscal
year 2005 EPA had 18 student loan repayment agreements in
place. What is the criteria for selecting these individuals,
and how much money will the 18 individuals receive?
Mr. DeLeon. Let me start with the 18. We have a modest
program in place, and as my colleagues have indicated, we will
look at critical needs, look at is there a particular talent
gap that we are trying to fill and offer it as an incentive.
But as you alluded to, I think, in your opening statement and I
have alluded to in my testimony, our managers have to balance
some critical programmatic needs and some dollars challenges
since it comes from the PC&B accounts. So we have used it
judiciously. It is modest. Perhaps with some further assistance
and guidance and resources we could expand that program,
because I agree with you, Senator, that this is a great
incentive to bring some young talent into the workforce,
compete with our private sector competitors, and try to at
least alleviate some of the disparity in pay that some of the
college graduates face when faced with a salary from the
Federal Government.
But we are looking for every opportunity to expand our use
of the student loan repayment program and have provided our
managers guidance on using it judiciously, as we have so far.
Senator Akaka. Well, thank you very much, Mr. Chairman, for
giving me this additional time.
Senator Voinovich. Certainly. One bill that Senator Akaka
and I have introduced in previous sessions of Congress would
not tax as income student loan repayment. It has not been able
to pass through the Finance Committee. How much would that help
this program?
Ms. White. I believe it would be a tremendous help to the
student who has to pay back the loan because then more of the
money goes toward the loan rather than the portion that remains
after taxes. It would do a lot to significantly begin to reduce
a lot quicker the outstanding loan balance that the employee
would have when they were a student.
Senator Voinovich. It would give us the same benefit as
universities.
Ms. White. The same benefit, the same money comes out of
the----
Senator Voinovich. If a student goes to work for a
nonprofit, universities can repay the loan and the students
don't have to pay taxes on it. Do you think that would help?
Mr. Nulf. Absolutely, sir. I think anytime you can stamp
something tax free as a benefit, it packs a bigger punch, yes,
sir. I would share with you that my wife and I recently were
looking at one of the business publications, looking at the--
our children are only 2 years old at this point, and in 16
years we will be wrestling with those college costs. And I
think these types of flexibilities and these types of benefits
speak to not just here and today. What we can do to have John
Smith or Sally Smith fill a particular chair providing a
certain function or value to an organization, but they speak to
the generations to come that we are so worried about with the
retirement and the institutional knowledge that is walking out
of the door of the agencies.
Senator Voinovich. Well, thank you very much. This has been
great. We have good people on the front lines, and we are real
impressed with what you are all doing in your respective
agencies. Your work makes us feel good, and we will be seeing
you again. Thank you.
The hearing is adjourned.
[Whereupon, at 12:53 p.m., the Subcommittee adjourned.]
A P P E N D I X
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