[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
               GAO HUMAN CAPITAL REFORM: LEADING THE WAY
=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON CIVIL SERVICE
                        AND AGENCY ORGANIZATION

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 16, 2003

                               __________

                           Serial No. 108-77

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                                 _______

                      U.S. GOVERNMENT PRINTING OFFICE

90-582                       WASHINGTON : 2003
_______________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota                 ------
MARSHA BLACKBURN, Tennessee          BERNARD SANDERS, Vermont 
                                         (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director

         Subcommittee on Civil Service and Agency Organization

                   JO ANN DAVIS, Virginia, Chairwoman
TIM MURPHY, Pennsylvania             DANNY K. DAVIS, Illinois
JOHN L. MICA, Florida                MAJOR R. OWENS, New York
MARK E. SOUDER, Indiana              CHRIS VAN HOLLEN, Maryland
ADAH H. PUTNAM, Florida              ELEANOR HOLMES NORTON, District of 
NATHAN DEAL, Georgia                     Columbia
MARSHA BLACKBURN, Tennessee          JIM COOPER, Tennessee

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Ron Martinson, Staff Director
        B. Chad Bungard, Deputy Staff Director and Chief Counsel
                          Chris Barkley, Clerk
            Tania Shand, Minority Professional Staff Member


















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 16, 2003....................................     1
Statement of:
    Smith, Pete, president, Private Sector Council; and Paul 
      Light, senior fellow, governance studies, the Brookings 
      Institution................................................    82
    Walker, David M., Comptroller General, U.S. General 
      Accounting Office; and Christopher A. Keisling, GAO 
      Employees Advisory Council.................................    14
Letters, statements, etc., submitted for the record by:
    Davis, Hon. Jo Ann, a Representative in Congress from the 
      State of Virginia:
        Majority staff memorandum................................     7
        Prepared statement of....................................     3
    Keisling, Christopher A., GAO Employees Advisory Council, 
      prepared statement of......................................    57
    Light, Paul, senior fellow, governance studies, the Brookings 
      Institution, prepared statement of.........................    91
    Smith, Pete, president, Private Sector Council, prepared 
      statement of...............................................    85
    Walker, David M., Comptroller General, U.S. General 
      Accounting Office, prepared statement of...................    17
















               GAO HUMAN CAPITAL REFORM: LEADING THE WAY

                              ----------                              


                        WEDNESDAY, JULY 16, 2003

                  House of Representatives,
          Subcommittee on Civil Service and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:04 p.m., in 
room 2154, Rayburn House Office Building, Hon. Jo Ann Davis 
(chairman of the subcommittee) presiding.
    Present: Representatives Davis of Virginia, Davis of 
Illinois, Van Hollen and Norton.
    Staff present: Ron Martinson, staff director; Chad Bungard, 
deputy staff director and chief counsel; Vaughn Murphy, 
legislative counsel; Chris Barkley, legislative assistant/
clerk; Robert White, director of communications; John Landers, 
detailee from OPM; Stuart Sims, legal intern; Steven Isbister 
and Taylor Copus, interns; Christopher Lu, minority deputy 
chief counsel; Tania Shand, minority professional staff member; 
Earley Green, minority chief clerk; and Teresa Coufal, minority 
assistant clerk.
    Mrs. Davis of Virginia. The Subcommittee on Civil Service 
and Agency Organization will come to order. We are expecting 
another Member or two, but we are going to go ahead and start 
so we don't hold you up.
    Earlier today I introduced H.R. 2751, the GAO Human Capital 
Reform Act of 2003. The broad subject of the bill, expanding 
personnel management flexibilities, is not a new one for this 
subcommittee. Already this year we have held three hearings on 
pay-for-performance systems or related matters, and we have 
passed legislation out of the full Government Reform Committee 
granting the Defense Department, NASA, and the Securities and 
Exchange Commission freedom from some of the dated personnel 
rules that govern the Federal Civil Service.
    At each step of the way, this subcommittee has sought the 
advice of David Walker, the Comptroller General of the United 
States and head of the General Accounting Office. Mr. Walker 
has been a valuable contributor to these discussions, relying 
on both his agency's knowledge of existing governmental pay-
for-performance systems and the GAO's own experience in 
strategic human capital management.
    Today we are pleased to have the Comptroller General back 
with us, but in a slightly different role as we will be 
discussing whether to grant the GAO itself additional 
management flexibilities. I will let Mr. Walker go into greater 
detail about his proposal, but at its most basic this 
legislation would make permanent GAO's early retirement and 
buyout authority; would give the Comptroller General and GAO 
managers more authority to reward employees for good work, 
while taking away the guarantee of the annual Federal pay 
adjustment; would increase leave benefits for upper-level 
employees; and last, would change the very name of the 
organization from the General Accounting Office to the 
Government Accountability Office.
    We are also fortunate to have with us Mr. Christopher 
Keisling, a representative of the GAO Employee Advisory 
Council; Pete Smith from the Private Sector Council; and Paul 
Light from the Brookings Institution, who is one of our experts 
and residents on Civil Service issues.
    I support the GAO's efforts to expand its personnel 
flexibilities. Couldn't you have changed the acronym? That's 
hard to say.
    GAO is an arm of Congress. We rely on the investigative 
skill and impartiality of the GAO to help improve the 
performance and ensure the accountability of the Federal 
Government. As a result, it is essential that GAO and 
particularly the Comptroller General possess the management 
tools needed to maintain a work force of the highest degree of 
professionalism and skill. However, I am very interested in 
hearing from Mr. Keisling and our outside experts to get their 
perspective on the details of GAO's proposals, in much the same 
way that Mr. Walker provided his analysis at our previous 
hearings.
    I thank you all for coming. I would like to say that when 
Mr. Davis, our ranking member, gets here, we will give him an 
opportunity to give an opening statement. And I ask unanimous 
consent that all Members have 5 legislative days to submit 
written statements and questions for the hearing record, and 
that any answers to written questions provided by the witnesses 
also be included in the record. Without objection, it is so 
ordered.
    [The prepared statement of Hon. Jo Ann Davis follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mrs. Davis of Virginia. I also ask unanimous consent that 
all exhibits, documents, and other materials referred to by 
Members and the witnesses may be included in the hearing 
record, and that all Members be permitted to revise and extend 
their remarks. And without objection, it is so ordered.
    I also ask unanimous consent that a memorandum prepared by 
Majority staff regarding lessons learned from staff visits to 
Department of Defense demonstration project sites be submitted 
into the record within 7 days from this date. The Minority 
staff will then have an additional 7 days to submit its views. 
And, without objection, it is so ordered.
    [The information referred to follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Davis of Virginia. We are going to now begin with our 
first panel. And on our first panel we welcome the 
distinguished Comptroller General of the United States, David 
Walker, of the General Accounting Office. We are also delighted 
to have you testify about the changes you would like to see at 
the GAO.
    We would also like to welcome Chris Keisling of the GAO 
Employee Advisory Council. He is here to give us the employees' 
perspective.
    And, Mr. Walker, you are recognized first for 5 minutes.
    If you would both stand. It is the policy of this committee 
that we swear our witnesses in.
    [Witnesses sworn.]
    Mrs. Davis of Virginia. Let the record reflect that they 
both answered in the affirmative.
    Mr. Walker.

   STATEMENTS OF DAVID M. WALKER, COMPTROLLER GENERAL, U.S. 
  GENERAL ACCOUNTING OFFICE; AND CHRISTOPHER A. KEISLING, GAO 
                   EMPLOYEES ADVISORY COUNCIL

    Mr. Walker. Madam Chairwoman, thank you very much for 
holding this hearing. And let me just say it is always better 
to swear rather than be sworn at. I mean, swear in rather than 
sworn at, I should say.
    I want to thank you not only for having the hearing, but I 
also want to thank you for your personal leadership in the area 
of human capital in the Federal Government and your willingness 
to sponsor the GAO Human Capital Reform Act of 2003, as well as 
seeking other cosponsors, which I understand that we will have 
more in the very near future. So I thank you very much for your 
leadership.
    As you noted, I've testified on many occasions before this 
subcommittee and other committees of Congress about the need to 
transform how government does business, and I've noted that 
human capital strategy is key to effective government 
transformation, because it's really all about people. I've also 
noted our desire to try to lead by example in all areas of good 
government, including human capital strategy. I believe it's 
appropriate for us to do that as the agency that evaluates 
others, and I also believe it enhances our credibility by being 
in a position to be as good or better than any other agency 
that we would seek to evaluate.
    As you know, we have somewhat of a unique role in 
government, and we have evolved over the years since 1921. And 
as a result of that evolution, we have some hybrid systems. 
While many agencies are coming up for the first time asking for 
things like broad-banding and pay-for-performance authority, we 
at GAO have had the authority for broad-banding for over 20 
years, and, in fact, we have almost 15 years of experience with 
broad-banding for a significant majority of our work force. 
Furthermore, we have had authority for pay-for-performance for 
over 20 years, and we have almost 15 years of experience with 
pay-for-performance in that area.
    And so many of the concepts we are talking about and 
additional flexibility that we are seeking are building upon 
what Congress has already given us and building upon the 
experience and lessons learned that we have had for almost 15 
years, rather than being new, out of the blocks at the present 
point in time.
    As you noted, we are asking for a number of authorities, 
and in summary--and I appreciate you putting my whole statement 
in the record--we're asking to make permanent GAO's 3-year 
authority to offer voluntary early retirement and voluntary 
separation payments, which, as you know, Congress has already 
provided to most executive branch agencies. We are asking for 
the authority for the Comptroller General to adjust rates of 
pay of GAO employees on separate bases than the annual 
adjustments authorized for the executive branch. We are asking 
for permission for GAO to set the pay of an employee who might 
be demoted or reclassified as a result of a work force 
restructuring or other action at his or her current rate 
without having to compound the overpayment by continuing to 
make the automatic adjustments that current law requires. We 
are asking for authority to, in appropriate circumstances, 
reimburse employees for some relocation expenses based upon 
what's the benefit to the taxpayer and what makes sense for the 
agency, rather than an all-or-nothing scenario, which is what 
it is now. We are asking for the authority to be able to 
provide additional leave accrual for upper-level hires, because 
we are hiring more people from the outside. But, candidly, I 
will note that we would like to do it broader than that if the 
Congress would be willing, for people who have prior equivalent 
experience. But we're only asking for this because we believe 
this is a reasonable and minimalist approach.
    We are also asking for authorization for an executive 
exchange program to build on the program that Congress approved 
that Congressman Tom Davis had proposed last year to go beyond 
information technology specialists to other areas where we have 
supply and demand and imbalances, subject to certain 
limitations; no more than 30 going out, no more than 30 coming 
in, in a given year.
    And, last but certainly not least, we are asking for 
consideration to change our name from the General Accounting 
Office, which was reflective of what the agency did and the 
employees who comprised the agency for about our first 50 
years, but is clearly not reflective of what we do today. A 
vast majority of our employees are not accountants, a vast 
majority of our employees do not do accounting and financial 
management-related activities, and so, therefore, we believe it 
more accurately reflects who we are, what we do, and it will 
enable us to keep our world-class brand name, which is GAO, 
which I and, I am pleased to say, Chris are proudly wearing on 
our lapels.
    I think there's two things that are important here: process 
and proposal. There are several agencies that have come before 
this subcommittee and other committees and asked for extensive 
authority with little or no consultation with key stakeholders. 
I am proud of the process that we followed in order to come up 
with this proposal. We initially sent a straw proposal to the 
Hill and to our employees. We consulted with the Employee 
Advisory Council, that has a representative who will testify 
our managing directors, and our SES members. We listened to all 
of our employees and considered what clarifications, changes, 
and other commitments needed to be made in light of those 
comments.
    We engaged in an unprecedented outreach effort that I would 
hold up to efforts that anybody else may have made in this 
regard. I think that's critically important.
    As a result of that process, we have made some 
clarifications, some changes, and some commitments, most--many 
of which are in my written statement, to make it part of the 
formal record.
    A vast majority of our proposals are not controversial; 
three of them have differing degrees of controversy. I believe 
that, due to the changes, clarifications, and commitments that 
we have made, there is really only one that has any significant 
degree of controversy, and that's the proposal decoupling us 
from the executive branch for the annual pay adjustments. We've 
made changes and commitments as a result of employee comments. 
I believe that to the extent that people disagree with it--and 
some people do, there is no doubt about it--it's either because 
of philosophical reasons or personal interest considerations. I 
can't deal with such issues. I've done as much as I can do.
    In summary, the Congress has been kind to us in the past by 
giving us authorities in 1980 and the year 2000 that have 
clearly helped us to better serve the Congress and the country. 
It's clearly helped us to be in the lead with regard to 
government transformation, in general, and human capital 
reform, in particular. I respectfully request that the Congress 
give expedited consideration to this proposal. I think we 
followed a model process. I think we have a reasoned and 
reasonable approach. And I know that it will help us to 
continue to lead by example and make GAO a better agency to 
serve the Congress and to serve the country.
    Thank you, Madam Chair.
    Mrs. Davis of Virginia. Thank you, Mr. Walker.
    [The prepared statement of Mr. Walker follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Davis of Virginia. Mr. Keisling, I will recognize you 
now for 5 minutes, and if you go a little over, it's OK.
    Mr. Keisling. Good afternoon, Madam Chairwoman, and 
Congressman. Thank you for the opportunity to speak before the 
subcommittee today.
    In addition to my membership in GAO's Employee Advisory 
Council, I am also an Assistant Director in GAO's Atlanta field 
office. While my role on the Council is to represent my fellow 
Assistant Directors in the field, I am here today to present 
the views of the Council and all of the GAO employees that we 
represent.
    In preparing for the hearing today, the Council considered 
the results of our outreach to employees during the 
introduction of the proposal as well as subsequent comments 
employees provided after revisions and assurances made by the 
Comptroller General. Although the Council recognizes that not 
all employees have the same opinions, we believe our testimony 
today is representative of a substantial cross-section of GAO 
employees' views.
    Before I proceed, I want to acknowledge the points made by 
the Comptroller General regarding the importance of working 
with employees in proposing and implementing these changes. I 
think his testimony today and statement reflects a significant 
level of understanding of employees' concerns, coupled with the 
broader perspective of the more strategic direction he plans 
for the agency.
    In summary: Employees generally support many of the 
provisions in the proposal, but have concerns about those 
provisions that affect their pay. Given the limitations on my 
time today and the emphasis of the comments we received, I will 
briefly describe the areas of support and then focus on 
employees' concerns in my oral statement. A more complete 
description is being provided in our written statement.
    Employees recognize that attracting and retaining a high-
quality work force is vital to the future of GAO. Thus, 
employees generally express their support for provisions to 
provide 6 hours of vacation time for upper-level hires, to fund 
varying levels of relocation expenses, to recruit and retain 
top employees, and to establish an exchange program with the 
private sector. They also generally support the provision that 
makes GAO's authority to offer voluntary early retirement 
permanent.
    Most employees commented positively on these authorities, 
but some indicated the need for internal controls to monitor 
and report on their use, as are present to provide 
accountability for other authorities throughout GAO. For 
example, the Comptroller General reported to the Congress on 
GAO's use of the flexibilities provided in the first round of 
authorities granted in the GAO Personnel Flexibilities Act of 
October 2000.
    In terms of concerns, employees expressed concern about 
proposed changes to Federal Civil Service employment rules that 
have historically provided GAO and most Federal employees with 
a fixed annual increase determined by the President and the 
Congress to protect employees against the effects of inflation 
and to consider varying locality-based costs.
    Employee comments about the proposed changes included 
concerns that GAO-based annual economic adjustments are likely 
to be less than the amounts annually provided by the Congress. 
Thus, employees performing at lower, but satisfactory levels 
could experience an effective pay cut from the amounts 
traditionally provided.
    Another concern expressed by employees regards the 
flexibility for the Comptroller General to use some of the 
funds traditionally appropriated for cost-of-living adjustments 
for all employees to instead pay for performance-based 
individual rewards. Some employees believe this could imperil 
future GAO budgets by making a portion of the budget that was 
once mandatory more discretionary in nature.
    Another general comment we received was that the wide 
latitude provided in the proposal gives the Comptroller General 
what some employees see as overly broad discretion in setting 
annual economic adjustments to employees' pay. On the other 
hand, some employees agreed with this aspect of the proposal, 
because they agreed with the need for greater flexibility to 
reward the agency's highest performers and to respond to 
budgetary fluctuations and emergencies. Some commented that the 
change could make GAO more attractive to new recruits and could 
serve to further dispel perceptions that Federal pay is not 
merit-based.
    Some employees cited continuing longstanding concerns that 
the performance assessment process at GAO is highly subjective 
and, therefore, does not provide a valid basis for granting 
even greater discretion in allocating pay. Related to these 
concerns about subjectivity and the performance assessment 
system, employees expressed concern about data indicating that, 
as a group, minority, veterans, and field-base employees have 
historically received lower ratings than the employee 
population as a whole. It is encouraging, however, that ratings 
for these employees hired in the last 5 years have 
significantly smaller or no differences.
    Employees have also expressed concern about the elimination 
of grade and pay retention rules. Some staff, particularly band 
2 analysts and mission support staff, are concerned that this 
provision may result in an erosion in their future pay since 
there is a strong possibility that these two groups may be 
restructured in the near future.
    In balance to these concerns, I want to take the 
opportunity today to recognize and express employees' 
appreciation for the Comptroller General's efforts to solicit 
employee feedback and to take action in response. For example, 
the Comptroller General revised sections of the proposal and 
made a number of assurances to address employees' concerns. Key 
among those assurances, the Comptroller General has agreed to 
explicitly consider cost-of-living and locality pay 
differentials in making annual economic adjustments to ensure 
that employees who are performing adequately will receive an 
annual increase that maintains their spending power. We 
appreciate his effort to include this guarantee in his 
statement today so that it will be established as part of the 
legislative record.
    In conclusion, GAO employees are proud of our work 
assisting the Congress to make government operations more 
efficient and effective. The Council believes that GAO is 
making a concerted effort to become a more effective 
organization. We will continue to work closely with management 
in implementing and monitoring the use of any additional 
authorities granted to the Comptroller General. We believe that 
it's vital that we help to develop and implement innovative 
approaches to human capital management that will enable GAO to 
continue to meet the needs of the Congress, to further improve 
our work environment and maximize the potential of our 
dedicated work force, and to serve as a model for the rest of 
the Federal Government. Thank you.
    Mrs. Davis of Virginia. Thank you, Mr. Keisling.
    [The prepared statement of Mr. Keisling follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Davis of Virginia. I can say, you have already been a 
model to me here listening. It's pretty neat to sit here and 
have the Comptroller General and then someone representing the 
employees talking at the same time on the same panel, and I 
appreciate that from both of you.
    Mr. Davis, our ranking member, if you have an opening 
statement?
    Mr. Davis of Illinois. Well, what I will do is I just won't 
read the opening statement since I came, but let me just thank 
you, first of all, for holding this hearing, and I certainly 
look forward to the witnesses. I enjoyed meeting with Mr. 
Walker yesterday to get a preliminary review of what was being 
presented and what is being proposed, and I do have some 
concerns. One concern is I wish we were doing this 
comprehensively; that is, we were looking at agency reform 
across the board rather than what I call piecemealing it or 
dealing with agency by agency. But nevertheless, we are here at 
this moment, and I look forward to the question and answer and 
exchange period. And again, I thank you for holding this 
hearing and giving us the opportunity to seriously pursue 
reform of our Federal work force.
    Mrs. Davis of Virginia. Thank you, Mr. Davis.
    I will tell you that Mr. Walker and I had this same 
conversation, from what you just said, about doing this 
piecemeal, and my hope is that this becomes a model, and we can 
maybe use it as a model, if possible, or somehow make it into a 
model for the whole Federal Government if it works.
    Mr. Davis, I'm going to go to you first and let you ask 
questions, if you would like.
    Mr. Davis of Illinois. Well, thank you very much. And I 
appreciate that.
    Mr. Walker--of course it's good to see you again, Mr. 
Keisling. Why don't I begin with you. I just raised the 
question about across the board as opposed to agency by agency. 
Would you respond to that?
    Mr. Walker. Absolutely, Mr. Davis.
    First, as you know, we are in the legislative branch of 
government, and we are a unique agency and have certain hybrid 
systems.
    That being said, with regard to the executive branch in 
particular, I believe it's critically important that we 
recognize that we do need comprehensive Civil Service reform. 
At the same point in time, how you do it, when you do it, and 
what basis you do it matters, and there needs to be a set of 
core principles and safeguards that would apply across all 
different departments and agencies in order to make sure that 
we avoid the further Balkanization of the Federal Government.
    I'm pleased to say that with regard to the systems and 
safeguards that we recommended to this subcommittee and also to 
other committees of Congress for consideration in connection 
with the Defense Department Transformation Act, that we either 
have those in place or are committed to have those in place 
before we would operationalize any of the authorities that we 
are seeking here today. Therefore, from an intellectual 
standpoint, we are being consistent with what we are 
recommending for others.
    I would also say that we are way ahead of the executive 
branch. We have had broad-banding authority for 20 years. We 
implemented it almost 15 years ago. We've had pay-for-
performance authority for over 20 years; we implemented it for 
almost 15 years. And so I am hopeful that, as Chairwoman Davis 
said, that this will be another step toward hopefully not only 
helping GAO, but providing some valuable lessons and experience 
that could be helpful to other agencies in the Federal 
Government as well.
    Mr. Davis of Illinois. Let me just--and I was thinking 
about the founding of the country and some of the basic 
principles that existed. And, of course, one of those is that 
the governed has as much right to input as whoever is going to 
be doing the governing. And that those who are affected by 
decisions, by change, should have as much opportunity to have 
input into the process of making the determination.
    Were the employees given the opportunity to make 
recommendations and suggestions, have input, and kind of be up 
on what has taken place and what is being proposed?
    Mr. Walker. Here is what we did, Mr. Davis. We came up with 
a preliminary draft straw proposal. I can't get too much more 
tentative than that. We sent that up to the Hill. We also 
provided the proposal to our Employee Advisory Council, to our 
managing directors, and ultimately to all GAO employees. I then 
conducted two televised chats where I ended up--through closed-
circuit television--addressing all GAO employees with regards 
to this proposal. We held a number of listening sessions of 
various sizes, in various locations for different types and 
levels of people within GAO. We provided an opportunity for all 
of our employees to send comments in, via e-mail, via notes, or 
whatever else. They had the opportunity to comment either 
directly to me, or they had the opportunity to comment to one 
of their democratically elected representatives on the Employee 
Advisory Council. I also met with all of our senior executives 
and, through electronic confidential balloting, asked them to 
vote on each of the provisions. They overwhelmingly supported 
every provision by various margins.
    And so we have had an extensive outreach effort to be able 
to provide an opportunity for our employees to comment. We've 
made clarifications, changes, and commitments based upon that. 
And I feel good about the process we followed.
    Mr. Davis of Illinois. Mr. Keisling, let me ask you, did 
you submit testimony to the Comptroller General prior to 
submitting it here today?
    Mr. Keisling. Yes, sir. We shared our testimony with the 
Comptroller General.
    Mr. Walker. And I shared mine with him.
    Mr. Davis of Illinois. So it's kind of a----
    Mr. Walker. Pari-pasv.
    Mr. Davis of Illinois. Well, did you make any changes in 
your testimony after you had submitted it to the Comptroller 
General before submitting it today?
    Mr. Keisling. The Comptroller General made a number of 
comments, varying from minor editorial comments, which, of 
course, we made those, and some suggestions to language that 
might be more representative of the types of input in the 
process that we used to receive that input from employees, and 
so I made those changes as well. But in terms of substantive 
changes, for example, eliminating an area of particular 
employee concern, no, we didn't make any substantive changes to 
the testimony.
    Mr. Davis of Illinois. Did you feel constrained to do that 
or--you know. I mean, I have people who write for me, and I 
don't really like to change too much what they write unless 
it's--you know, I just disagree with it or I find some 
grammatical errors. I've got one guy who he's always right no 
matter what, I mean, so you can't find anything wrong with 
anything he does. I mean, otherwise, you've got a big argue. 
But, I mean, did you feel constrained to make any changes?
    What I'm really trying to get at is whether or not you felt 
in your role that there may be some conflict in your role, one, 
as an employee, and another as a representative of a group, but 
you are here actually dealing with your employer.
    Mr. Keisling. Yes, sir. The short answer is, no, I don't 
have any concerns about speaking forthrightly and honestly 
about employees' concerns. I have confidence that the 
Comptroller General understands that the testimony I've 
presented today reflects the view of many employees across GAO 
as well as the Employee Advisory Council. And I would like to 
give a vote of confidence to the Comptroller General for his 
willingness to form the Employee Advisory Council in the first 
place, some 4 years ago. And he has provided us with an open 
environment to solicit input from our constituents, and has 
really not imposed any constraints on our ability to reach out 
and to communicate what the staff feel. And I think the 
testimony today is representative of that relationship that we 
had with the Comptroller.
    Mr. Davis of Illinois. I think that's what I was trying to 
get at. Do you have a level of comfortability in terms of the 
interaction as you carry out your duties and responsibilities 
in both roles?
    Mr. Keisling. Very comfortable. As a member of the 23-
member Council, some of the discussions we have had with the 
Comptroller General have been quite, I will say, interesting. 
And there have been some heated discussion about some of the 
issues that have come up, but I think we've continually sought 
to find a middle ground that could achieve both the purpose of 
the Council and the intent of the Comptroller General.
    Mr. Walker. I think the State Department would say, Mr. 
Davis, candid and constructive conversations. I might add for 
the record that I didn't ask to see the Employee Advisory 
Council's testimony. They offered. And when they offered, I 
said, I will do the same for you.
    I will also note for the record that before I move on any 
comments at all, I made it very clear: Look, this is your 
testimony. You say what you think you need to say. You can 
ignore everything I'm saying if you want, or you consider it to 
the extent that you deem appropriate.
    Let me also say that, based upon comments that I got back 
from the Employee Advisory Council, I likewise looked at my 
statement and determined whether or not I needed to make 
changes to my testimony--I think if you look at our statements, 
they are not the same by any means, but the substance of the 
message is very consistent, and I think that's encouraging. 
That's because we have a constructive relationship. The EAC is 
a democratically elected body that represents various 
interests, but, hopefully, can also represent the collective 
best interests of all employees rather than narrow interests of 
various groups. And that's what we strive to do.
    Mr. Davis of Illinois. Thank you very much, Madam 
Chairwoman. I know I've gone way over, but perhaps we will be 
going back and forth.
    Mrs. Davis of Virginia. We will probably have time for a 
few more questions, Mr. Davis.
    Mr. Davis of Illinois. Thank you.
    Mrs. Davis of Virginia. I think the bottom line of what Mr. 
Davis was asking there--and I'm just going to be sort of blunt. 
If the Comptroller General wasn't sitting here, would your 
testimony be the same, realizing he is your boss? And, David, 
you can't do anything to him when he answers me truthfully. 
Remember, you are under oath.
    Mr. Walker. The facts are the facts. I will close my ears.
    Mrs. Davis of Virginia. Very good. There you go.
    Would your testimony be any different?
    Mr. Keisling. I think my testimony would be of the same 
general tenor. I can't think of any other concerns that we 
haven't cited either here in the oral statement today or in the 
written testimony.
    In terms of constraints, I guess one of the greatest 
constraints we face as an Employee Advisory Council is 
obtaining the views of the wide cross-section of GAO employees 
and making sure that when we express one--a comment and try to 
generalize it, that it is representative of more than just one 
lone voice or two people, that it represents a summary of what 
we have been told by our constituents. And we have gone to 
great lengths to make sure and to reach out--for example, in 
preparing the testimony, we solicited open-ended comments from 
all employees through our constituent groups. And I received 
all of the comments and basically sat down and looked for those 
areas where there was a consistent theme across all the 
different constituent groups.
    And, of course, we are comprised of, you know, a variety of 
groups that represent very different employees at GAO not only 
in terms of their job function, but in terms of some of the 
other categories that have traditionally been represented at 
GAO, including minorities, disabled employees and veterans. And 
I think that's what the testimony today represents is the 
common threads that ran throughout all of the comments that I 
received. And that's the process that I used to develop the 
testimony.
    Mrs. Davis of Virginia. And Mr. Walker made a comment that 
I think you did some sort of a survey, and overwhelmingly every 
provision was--I tried to write it down when you said it--was 
supported overwhelmingly.
    Mr. Walker. Let me be fair. Let me be very, very clear.
    Mrs. Davis of Virginia. Because you know where I'm going 
to.
    Mr. Walker. Yes.
    Mrs. Davis of Virginia. Was it overwhelming on the pay 
adjustment?
    Mr. Walker. Let me be very clear. Neither I nor the 
Employee Advisory Council has the ability to say with a 
statistical degree of reliability what all GAO employees think 
about each of the provisions here. In order to do that, we 
would have had to have done a survey and basically conduct a 
referendum.
    Mrs. Davis of Virginia. OK.
    Mr. Walker. We have not attempted to conduct a referendum 
because I don't believe that this is an issue that's 
appropriate for a referendum. At the same time, what I do have 
in my statement that we did do is after we ended up having the 
listening sessions, making clarifications, making changes, 
making commitments, I then went to our senior executive service 
and senior leaders. It's about 130 individuals who are the 
leaders and stewards of the agency. I asked them to vote via 
electronic confidential balloting on every provision in order 
to ascertain whether those who were responsible for delivering 
our client service, managing our people, not only delivering 
today, but preparing us for tomorrow, supported each provision 
and to what degree.
    The result of that was every provision was supported by a 
supermajority. The minimum was better than two to one, and that 
was the name change, unanimous support for, for extending the 
buyout, to points in between.
    Now, you and I both know that the senior executives' views 
are not necessarily reflective of the administrative staff or 
the middle-level views or whatever else. I have a sense for 
where our employees are on these various issues and how they 
differ. The bottom line is, we have listened and we have made 
changes. I think we have a reasoned and reasonable approach, 
and I believe it's the right thing to do.
    The last thing I would mention, I asked Chuck Bowsher--who 
is my predecessor, and our historian, in the 1980's when we 
adopted broad-banding and pay-for-performance we had done a 
referendum how it would have come out? Now, we didn't do a 
referendum, and they didn't back then, I can tell you that now, 
because we've done more outreach and we've done more 
communications. They both told me, independently of talking to 
each other, that it probably would have failed.
    Now, let's fast-forward to 2003. My predecessor made a pay 
protection guarantee back then which I'm honoring, that 
basically says that employees won't be any worse off under our 
new system than they would have under the old GS system. About 
540 people are still subject to that pay guarantee, only 5 
received it in the most recent pay adjustment, which tells me 
that while there was a lot of trepidation about going to broad-
banding and pay-for-performance over 15 years ago, only 5 out 
of roughly 540 have gotten pay protection. So 535 are better 
off. I am confident that this will have a similar result as 
time goes past.
    Mrs. Davis of Virginia. Thank you.
    Mr. Keisling, you made a comment, and I tried to write 
yours down, too, when you said one of the things--and I think I 
have it right--that some of the employees are worried about is 
that if you do the pay adjustment so that they are not 
guaranteed what they are now, that they are worried that there 
would be a cut, or less than--did you mean really a cut, or do 
you mean less than, a smaller increase? Not a cut, but a 
smaller increase? I'm not sure what you----
    Mr. Keisling. I think you are correct in saying a smaller 
increase than has traditionally been provided.
    Mrs. Davis of Virginia. But not a cut in their pay.
    Mr. Walker. There is nothing in this bill that would allow 
me, nor do I contemplate, cutting a GAO employee's current pay.
    Mrs. Davis of Virginia. That was my understanding. I was 
concerned about his comments, so I wanted to make sure that the 
employees understood that; it's my understanding there could be 
no cut in pay.
    Mr. Keisling. That's correct. And I think again that there 
is a--the perception is, looking to the future, that the net 
effect might be--that the pay that they would have otherwise 
anticipated to accrue over the future----
    Mrs. Davis of Virginia. Wouldn't be as large.
    Mr. Keisling [continuing]. Wouldn't be as large.
    Mr. Walker. Could I give one example, Chairwoman Davis? 
There is one group that clearly will not be better off as a 
result of this bill. Less than 5 percent of our employees are 
not performing at a meets expectations level. Under this bill, 
they will be worse off, because under this bill we would not 
have to give across-the-board increases nor merit pay increases 
to that small percentage of our employees who are not 
performing at a meets expectation level. But I would 
respectfully suggest that's the right answer.
    Mrs. Davis of Virginia. But if this bill were to pass, 
those 5 percent that are at less than expectation may see the 
light and become better.
    Mr. Walker. That is the hope.
    Mrs. Davis of Virginia. OK.
    Mr. Walker. And we are going to try to help them do that.
    Mrs. Davis of Virginia. One other question for you, Mr. 
Keisling. What part of the GAO management flexibilities is the 
source of the most employee discontent, of the current 
flexibilities?
    Mr. Keisling. Of the existing flexibilities that we have?
    Mrs. Davis of Virginia. Um-hmm.
    Mr. Walker. Or the ones we are proposing?
    Mrs. Davis of Virginia. Either/or, or both.
    Mr. Keisling. We did not seek that type of input from our 
constituents in terms of the existing flexibilities that have 
been used. In terms of the element that most employees are 
concerned about, that would be decoupling from the Federal 
service pay system.
    Mrs. Davis of Virginia. My time has expired. I'm going to 
go to Mrs. Norton Holmes and see if she has some questions.
    Ms. Norton. Yes. Thank you very much. Yes, I have a 
question.
    Mr.--sorry. This gentleman who represents the EAC.
    Mr. Keisling. Mr. Keisling. Yes.
    Ms. Norton. Mr. Keisling, are you in the SES, or what grade 
are you?
    Mr. Keisling. No, I'm not a member of the SES. I'm a band 3 
employee.
    Ms. Norton. A what?
    Mr. Keisling. A band 3 employee in GAO's Atlanta field 
office.
    Ms. Norton. What does that mean?
    Mr. Walker. GS-15.
    Ms. Norton. Yes. That's what I'm after.
    My question regards to the rather murky testimony and 
indication in the written testimony about just who it is who 
supports the proposal. Now, here we have before us a proposal 
that involves every single person in the agency. And I'd like 
to know from you, Mr. Walker, when you talk about people who, 
in fact, support--that you know for a fact support it, whether 
you are talking about SES employees, or employees like the 
gentleman to your left.
    Mr. Walker. I'll give you my opinion. The only group I can 
say with certainty is the SES, because those are the only 
people that we have actually done electronic confidential 
balloting on and we asked them to vote on every provision. I 
can give you my opinion, which I think is consistent with what 
Mr. Keisling has said for the EAC.
    For four of the provisions that we're asking about, there 
is little to no controversy and broad-based, overwhelming 
support. For three of the provisions, there are different 
degrees of concern. Those degrees of concern are significantly 
less than they were when we first came out with our straw 
proposal because we've made clarifications, commitments, and 
changes to address comments that we got from our employees.
    The provision that is the most controversial by far is the 
one that proposes to decouple us from the executive branch on 
the automatic pay adjustments. I believe that there is a 
significant percentage that would prefer that we not do that, 
just as there was back when we went to broad-banding and pay-
for-performance.
    We've made changes, clarifications, and commitments. I 
believe those who do not support are in the situation where 
either, A, philosophically they don't believe in more pay for 
performance, or, B, they believe that personally they will be 
better off under the status quo rather than the new system. I 
can't change that. And I will tell you this: That I believe 
that this is for the good of the agency. It's a lot more 
reasoned and reasonable than what Congress has already granted 
many other agencies and what it's about ready to grant to the 
largest executive branch agency.
    Ms. Norton. I'm just trying to find out, you know, when 
we're talking--who--what level of employees are represented in 
the EAC?
    Mr. Walker. That's a great question, and then I will let 
Chris follow. We have 23 individuals. They represent all levels 
and different locations. We have some that represent 
administrative staff GS personnel; we have some at 
headquarters, some in the field. We have people that represent 
the professional staff, ranging from Band I up to Band II, or 
GS-7 to GS-15. We have individuals that represent African-
Americans, Hispanics, the disabled, veterans, and the gay-
lesbian community. It's a very diverse group.
    But, Chris, you probably can give more detail than I can.
    Mr. Keisling. Well, the short answer is that the EAC 
represents about 3,000 of the 3,200 employees at GAO. Basically 
that's everyone outside the SES.
    Ms. Norton. Has the EAC taken an official vote on this 
matter?
    Mr. Keisling. The short answer is, no, ma'am.
    Ms. Norton. Well, how in the world--I say to both of you--
can you represent what GAO employees believe if there is no 
official vote of the EAC taken, and, therefore, presumably no 
official position of the EAC? I mean, what's the whole point of 
the EAC if it's not to vote up or down?
    Mr. Walker. Well, I will give you my view, and then Mr. 
Keisling can give you his view. We are not precluding the EAC 
from voting. We didn't ask the EAC to vote. Ms. Norton, we do 
not have a union, and in the absence of that, I decided over 4 
years ago that I wanted to be able to have a mechanism in which 
that I can engage in ongoing and constructive dialog with a 
broad cross-section of our employees, which I do at least once 
a quarter. They set the agenda. The purpose of the EAC is for 
them to be able to bring items to the attention of management 
and management to be able to bring attention items to them on 
issues of mutual interest and concern affecting our employees. 
We end up talking with them at the earliest stages on what 
we're thinking about doing; they recommend things for us to 
consider doing; and we work together actively to try to help 
communicate things, get input from our employees, and try to 
make GAO a better place to work.
    Yes, they could vote if they wanted to, but their vote 
wouldn't necessarily be representative of a referendum of our 
employees.
    Ms. Norton. I can understand that. What I'm objecting to--I 
don't object to the way the EAC may or may not want to behave, 
but I do object your representing where GAO employees stand 
when the only way I know in a democracy to know where people 
stand is to do a survey or to have a vote. Now, this applies to 
people up and down the agency. Now, when you're dealing with 
people at the SES level, there is very little to take exception 
here to, but when you are dealing with cooks and bottle washers 
as well, then it does seem to me to represent that everybody 
agrees, and we have this EAC, and everybody and his mother and 
his aunt and every ethnic group and every sexual orientation, 
so what more do you want?
    What I want is if they are there, and Mr. Walker is going 
to come forward and say that this is what GAO employees 
believe, then I want somebody to take a vote up or down, 
because I tell you this much: In this Congress nobody in this 
committee is going to tell you what this committee believes 
without taking a vote up or down, or else no one's going to 
believe them.
    And so I object to your testimony about where GAO employees 
stand in the absence of some indication that you have some 
basis. This is, after all, the GAO we're talking about, 
supposed to understand something about scientific method and 
about what kinds of ways to report what people believe and what 
they don't believe based on evidence you have. And so I'm just 
trying to find out. Your testimony is sprinkled with--I mean, 
this GAO report is sprinkled with GAO employees support most 
aspects, and I haven't heard from you any indication that you 
can--that you've got any evidence to back up that statement.
    Mr. Walker. Well, let me try to take a shot.
    First, I think I have been very careful, and, frankly, I 
think Mr. Keisling has been very careful, not to be able to 
make a representation as to what percentage of our employees 
either support or oppose----
    Ms. Norton. No. You just said they all. For all intents and 
purposes, it's not--when you say GAO employees, that's 
tantamount to saying all or most employees. And I'm saying 
what's the evidence for that?
    Mr. Walker. Well, first let me say, I stand behind every 
word in my testimony, and it speaks for itself.
    Ms. Norton. It obviously doesn't if I'm asking you 
questions. So I'm not--if it speaks for itself, I wouldn't be--
I wouldn't be proffering a question.
    Mr. Walker. Well, I guess what I'm saying is, is I stand 
behind what I said. All right?
    Second, what's the basis for it? The basis for it is 
extensive outreach, numerous meetings, numerous e-mails, 
communications that have occurred formally and informally 
between the EAC and their representatives. Has there been a 
statistically valid survey done? No. Was that considered? Yes. 
It was not done in part because the view was that we have 
listened to our employees, we have made clarifications, 
changes, and commitments, and we don't want to make a decision 
based upon a referendum; because to do a survey at this point 
in time would be nothing more than a referendum.
    Ms. Norton. Let me conclude by saying, yeah, you bet you 
don't want to make it based on a survey. That's your 
prerogative you choose to do business--you are the GAO--in that 
way. But I ask you, in the future do not submit a report that 
to the average person reading would mean that you had evidence 
to back up the notion that most of your employees or all of 
your employees agree with what is in this report. Your answer 
does not indicate that you have that evidence. You have 
conceded that you did no survey. I do not require, this 
committee does not require, a survey, but we do require, it 
seems to me, that you not represent that, quote, employees, 
which in general parlance means most of the people that we are 
talking about, agree with what I'm saying here. I do not 
believe you can say that, sir.
    Thank you, Madam Chair.
    Mrs. Davis of Virginia. I thank the gentlewoman. And I 
apologize for getting your name wrong earlier, Ms. Holmes 
Norton.
    Just let me make one comment, and then I will recognize the 
gentleman from Maryland.
    I believe Mr. Walker said that Mr. Keisling is 
democratically elected, as is the entire Council, which is the 
24 folks, I think. And it's sort of like we Members of Congress 
are elected by our constituency, and then we come here to 
Washington. And we don't take a referendum back home on every 
vote; we vote representing them because they elected us. I sort 
of see that the same way. I sort of see that----
    Ms. Norton. He made no vote. That's the point. I'm not 
asking that the survey be taken, but even these people did not 
take a vote. These representatives took no vote, to go to your 
very point.
    Mrs. Davis of Virginia. Well, that's not the point I was 
making. The point I was making is that Mr. Keisling is an 
elected official representing some folks, as we are elected 
representing some folks. And we don't take referendums to come 
up with our votes.
    Ms. Norton. But we take votes.
    Mrs. Davis of Virginia. The gentlewoman is missing my 
point. But I will go on now to Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Madam Chairman. I apologize for 
being a little late.
    Welcome, both of you gentlemen, to the committee.
    First, let me thank you, Mr. Walker, and commend you on the 
process followed by GAO up to the point of this hearing. I may 
have some further questions in following up, but at least 
compared to the Department of Defense--not a model that you 
would want to emulate--and compared to a number of other 
agencies within the executive branch that have asked for 
similar or much greater authority at reorganization, based on 
what I've heard from many people, you have been a model of how 
to proceed in these issues.
    As you know, the last time that we met in my office I did 
have a question. After some of the earlier testimony you 
presented, there were some concerns among a number of employees 
at GAO, and I was assured that you were going to go back and 
consult and further explain what you had proposed. And, again, 
I'm sorry for being late. I would be interested in what steps 
you have taken over the last month to further consult with 
employees. And I understand your statement, that you don't have 
any kind of scientific survey, but what is your sense of where 
the employees stand, and on what are you basing that 
assessment?
    Mr. Walker. Thank you. Since we spoke, we continued our 
outreach efforts. My view initially and still is that the most 
controversial part of our proposal, the only one where there is 
a significant degree of controversy, by any reasonable 
definition of significant, is the proposal to decouple our 
annual pay adjustments from the automatic pay adjustment with 
the executive branch.
    Now, what have I done since we met? In addition to further 
outreach, I have done several things: One, delay the effective 
date of this provision for a vast majority of our employees for 
2 years, which will give us time to work with the 
democratically elected Employee Advisory Council, with our 
managing directors, and to put out for notice and comment to 
all of our employees what our proposed system will be that will 
take the place of this automatic adjustment.
    Second, I have made it clear that, as long as employees are 
performing at the meets expectation level or better, then they 
will be protected against inflation, we will consider 
differences in competitive compensation by locality, and any 
amount that otherwise wouldn't be across the board would be an 
increase in base pay; it wouldn't be a bonus or a one-time 
payment, it would be an increase in base pay.
    The only exception to that would be extraordinary economic 
conditions, like deflation or hyperinflation or serious 
budgetary constraints, none of which I expect will happen, but 
I think prudence dictates having those caveats. I don't know 
what's going to happen 30 years from now or 40 years from now.
    And so we have listened to our employees, we have made 
changes, we have made clarifications, we have made commitments 
that went to the issue that I think was of most concern, 
understandably, of our employees, and that is the decoupling of 
annual pay adjustments from the executive branch.
    Now, I might also add that as of the end of this year, if 
the Congress passes the Defense Transformation Act, which is 
likely to, but you have to decide whether to do that, that 
about 45 percent of the executive branch will not be subject to 
this provision, but they have not have made the clarifications, 
the commitments, and the changes that I have made.
    Mr. Van Hollen. Right. Now, as I said, I think in 
comparison to other agencies you took a far more thoughtful and 
careful approach to this. Let me make sure I understand what 
you were just saying. You have provided an assurance that 
except under extraordinarily bad budget scenarios, for example, 
a situation much worse than anything we're encountering even 
today, and things are pretty bad today--that you would assure 
that employees who are meeting the minimal expectation would 
receive a COLA and locality pay; is that right?
    Mr. Walker. Yes, and we would have a different method. But, 
yes, they would receive protection against erosion of 
purchasing power due to inflation, and some consideration of 
locality at a minimum. And then they should receive a 
performance-based compensation increase in the form of base pay 
as well.
    Mr. Van Hollen. And the performance, again, what are the 
criteria you are going to be using for awarding the performance 
pay? I know you have been working on a system over time which 
brings you ahead of the Federal agencies that have requested 
much greater authority. If you could just briefly----
    Mr. Walker. Yes. For 70 plus percent of our work force, we 
have a competency-based performance appraisal system, the 
competencies of which have been validated by our employees. We 
implemented it for 70 plus percent of our work force last year. 
We are making changes based upon some recommendations of the 
EAC, managing directors, of others. We will continue to make 
changes. We are implementing a similar system for our attorneys 
this year; we plan to do it for our administrative staff within 
the next year and a half or so. And so they would be the 
basis--I mean, the results of these performance appraisal 
systems.
    We also have pay panelling where we don't just rely upon 
what one person says, we have panels of management officials 
and executives who end up looking at individual performance 
relative to others. We have a key role for our Human Capital 
Office and our Office of Opportunity Inclusiveness to review 
proposed decisions before final decisions are made to make sure 
they are nondiscriminatory and, to the maximum extent possible, 
that they are consistent. So we have a lot of things in place.
    I will say that our system isn't perfect. No system on the 
face of the Earth is perfect, and none will ever be, but I 
think it's the best in government.
    Mr. Van Hollen. Thank you.
    Thank you, Madam Chair.
    Mrs. Davis of Virginia. Thank you, Mr. Van Hollen.
    Mr. Davis, would you like another round with these two 
gentlemen?
    Mr. Davis of Illinois. Thank you. Thank you very much, 
Madam Chairwoman.
    Mr. Walker, what do you see as being the benefit of the 
private industry exchange program?
    Mr. Walker. Well, first I think it's important to note that 
we are limiting this to no more than 30 GAO employees going 
out, and no more than 30 coming in. Candidly, I don't think we 
will come close to that, but we want to have some limit.
    The idea is that we are finding more and more that in order 
to modernize management practices in government, there is a 
benefit to have some of our people go out and see how things 
are done in alternative scenarios, as well as there is a 
benefit for the private sector at times or not-for-profit 
entities to send people into government to gain a better 
understanding of how each other does things. This is important 
not just in the area of information technology, but we're 
having difficulty in recruiting Ph.D. economists we're having 
difficulty in recruiting actuaries, and certain skill areas 
where there's a supply and demand imbalance. And so we think 
this will give us an opportunity to be able to do some things 
that, for example the Securities and Exchange Commission, has 
done successfully. They are a professional services 
organization just like us.
    But the bottom line of this provision and this proposal is 
to help us do a better job for the Congress and the country, 
and that's really what it's all about.
    Mr. Davis of Illinois. The GAO Personnel Flexibilities Act 
required a report or reporting to Congress on how the agency is 
using its flexibilities to enhance its work effort. There is no 
reporting requirement in this proposal. We talked a little bit 
about that in terms of whether or not that should become a part 
of the new proposal should it be enacted. What's your response?
    Mr. Walker. I believe it should be. I believe in 
transparency and accountability. I believe it would be an 
improvement to the bill if there was an amendment that would 
really do probably a couple of things. I think this is 
consistent with what I heard Mr. Keisling say a little bit 
earlier.
    The idea is after we design and implement our new system, 
and maybe have operated it for 1 year, have a report back to 
the Congress similar to what we just did for our last human 
capital flexibilities legislation. Here is the process we used. 
Here is what we did. Here is how we implemented it. Here is 
what the experience was.
    I would also suggest that it may make sense to have us 
report back, as part of our Annual Performance and 
Accountability reporting, and maybe as also part of the 
appropriations process to the extent that we use voluntary 
early outs or buyouts, to the extent that we have exchanges, to 
the extent that we trigger one of these exceptional conditions 
that Mr. Van Hollen referred to, that we report that back to 
the Congress so that we have an appropriate degree of 
transparency, which can provide for the necessary degree of 
accountability for GAO. I am all for that.
    Mr. Davis of Illinois. The proposal also suggests that we 
may increase the amount of annual leave provided to high-level 
supervisory or high-grade individuals who would be brought into 
the agency, that goes beyond what is currently provided. And I 
think we talked about perhaps some review of that. But, could 
you share the rationale for that proposal?
    Mr. Walker. Well, from an intellectual standpoint, I will 
say that there are proposals in Congress that would say that 
since there is more mobility coming in and out of government 
that is the reality and we have to recognize that is what going 
to happen. To the extent that individuals have prior equivalent 
service that may be non-Federal service, there are some 
proposals that would say, that experience should be considered 
in determining what rate of leave accrual those individuals 
should have when they come into the Federal Government, no 
matter what level they are.
    I support that. But, the reason that we didn't go that far 
in this proposal is because while that might be a want, a need 
for us are higher grade, more--management and executive level 
and specialists where we know that it can have an adverse 
effect on our ability to be able to attract those types of 
people. I think as a matter of equity, I would be willing to go 
further than what we have proposed.
    The only reason I have proposed what we have, is that is a 
need. The other is a matter of equity. But, if this committee 
decided that you wanted to go further and have us as an 
experiment for that, then I would support that.
    Mr. Davis of Illinois. And finally, Madam Chairman, Mr. 
Keisling, what has been the reaction of your colleagues to the 
private industry exchange idea?
    Mr. Keisling. To be honest, sir, we did not receive a great 
deal of comment on this provision. We tested the waters and 
tried to get a feel for whether folks were concerned. And the 
comments that we received back, were that, in general, 
employees were not concerned about this provision.
    I don't think that it has enough of a direct day-to-day 
impact on many of the employees at the lower levels, where they 
would have a basis to comment.
    Mr. Davis of Illinois. Thank you very much, Madam Chairman. 
I was just thinking what it would be like if maybe we could 
exchange spots with the Senators every once in a while.
    Mrs. Davis of Virginia. That sounds like a marvelous idea. 
If you would like to propose it, I might--would support it.
    Mr. Van Hollen, do you have questions for a second round?
    Mr. Van Hollen. No. Let me just make one last point. I 
think GAO, based on what I have heard, you are a nonpartisan, 
bipartisan organization, however you want to describe it. And 
despite that fact, you have taken what I think are much greater 
precautions.
    My great concerns with the administration's proposals are 
that they have not done the homework; they have not laid the 
groundwork; they have not provided a system in place to test 
over a number of years; they have not provided employees an 
opportunity to comment on that. Yet since GAO is nonpartisan, 
that is a place where, when we have a change of administration, 
Republican, Democrat, the potential for political pressure and 
political abuse and political favoritism is the greatest.
    And I must say that especially in this context where we are 
seeing more of the use of political bonuses being paid out, a 
perception has been created among the employees throughout the 
Federal Government, many that I hear from, that it is really 
the danger of moving to a pay-for-performance system in the 
executive branch, without the protections that you are talking 
about in your proposal. The concerns have been heightened by 
the fact that many career employees see political employees 
getting these big bonuses and being rewarded based primarily on 
political allegiance rather than merit, in many cases.
    Fortunately, that is not something that is happening in 
GAO, which gives me greater comfort. But, despite the fact that 
you don't face those problems, you have taken the time to do 
some of the groundwork. I want to followup with you a little 
bit more after the hearing with respect to reaching out among 
the employees and what level of consensus you feel there is 
within the agency.
    Thank you, Madam Chairman.
    Mrs. Davis of Virginia. Thank you, Mr. Van Hollen.
    And gentlemen, I would like to thank you both for being 
patient and being willing to come here and testify today. We 
will go now to our second panel.
    If our second panel witnesses, Mr. Pete Smith, president of 
Private Sector Council, and Paul Light, senior fellow at the 
Brookings Institutions would come forward and remain standing, 
I will administer the oath.
    [Witnesses sworn.]
    Mrs. Davis of Virginia. Thank you, gentlemen. Let the 
record reflect that the witnesses have answered in the 
affirmative. Please be seated.
    The panel will now be recognized for an opening statement. 
We will ask you to summarize your testimony in 5 minutes, and 
any fuller statement you may wish to make will be included in 
the record.
    Would like to welcome Pete Smith, president of the Private 
Sector Council. I thank you for being with us today. You are 
recognized for 5 minutes.

 STATEMENTS OF PETE SMITH, PRESIDENT, PRIVATE SECTOR COUNCIL; 
    AND PAUL LIGHT, SENIOR FELLOW, GOVERNANCE STUDIES, THE 
                     BROOKINGS INSTITUTION

    Mr. Smith. Thank you. I am pleased to be here today to 
testify on the proposed human capital flexibilities being 
requested with respect to the General Accounting Office.
    These proposals are of particular interest to me. For over 
30 years, I have consulted with leading organizations around 
the world on H.R. strategy, compensation and change management, 
and for 6 of those years, I was CEO of a major consulting firm 
similar in size and with competencies not unlike those of GAO 
today.
    In my role as president of PSC, a primary focus has been on 
modernizing outdated Federal human resources policies. In this 
regard, the GAO proposals are steps that are very much in the 
right direction.
    First, these proposals are part of a clear and well-
thought-out process to strengthen the management systems and 
organizational capabilities of GAO.
    Second, as we have discussed, the proposals have been 
developed collaboratively with considerable input from within 
and from outside of GAO.
    Third, the proposed flexibilities respond to GAO's changing 
work force. Over 30 percent of GAO's employees have less than 5 
years of service. They represent a generation for whom 
traditional Civil Service personnel regulations are ill suited.
    Fourth, if you were to pick any one individual in the 
Federal Government today to lead the testing of new human 
capital approaches, it would be the Comptroller General. His 
background in H.R. consulting, his broad management experience, 
his inclusive and deliberate style, and his proven integrity 
suit him perfectly for this task.
    There is no question in my mind that these flexibilities as 
proposed will benefit the employees of GAO through fairer 
rewards and an even stronger organization, as well as Congress 
and the public.
    In the private sector, none of these proposals would be 
novel or controversial, they are pretty much standard practice. 
From a Federal perspective, however, the introduction of 
performance pay may generate controversy. Accordingly, I would 
like to take a few minutes to address this issue specifically.
    Under the current General Schedule for Federal employees, 
pay is set by grade and time in position, with no direct 
consideration for individual performance. One rationale for 
this practice has been that appraising Federal employee 
performance would require considerable subjectivity, which 
could be unfair.
    This argument assumes that the existing system, paying the 
same salary to all people who have been in the same job for the 
same time is fair. It is equal, but it is by no means fair. It 
rewards someone doing marginal work exactly the same as someone 
doing outstanding work. It has a demoralizing effect over time, 
and it provides no incentive to improve.
    There is always the possibility of some bias creeping into 
the system, but you can't legislate perfection. What you can do 
is train managers, emphasize the right values, and give them 
tools with which to lead.
    Performance-based pay is one of these tools, one that works 
successfully in the vast majority of organizations around the 
world, and one that is far preferable to systems that pay for 
only time in position.
    What GAO is proposing isn't revolutionary, it isn't risky, 
and it is not unfair. It is sound management, judiciously 
applied. I would like also to comment very briefly on the other 
elements of the proposed legislation.
    As for the pay setting policy, I think it is very 
appropriate to provide the Comptroller General with the 
authority to fix pay schedules in accordance with market and 
funding considerations, especially in light of the increasing 
competition for skilled financial expertise.
    The recommendation on pay retention provides that employees 
being demoted to a grade or a band for which have their salary 
above the maximum, have their salaries frozen until the range 
is increased to the point where the maximum exceeds their rate 
of pay. This is a sensible fix. There is no reason to increase 
pay for anyone whose salary exceeds the maximum value for their 
work.
    As for the increased leave and relocation expenses, both of 
these provisions are common in the private sector. Today's work 
force, as David pointed out, is far more mobile than that 
envisioned in Title 5, and GAO needs to be able to provide 
inducements to attract upper level employees from outside to 
its ranks.
    The executive exchange program is a good idea as well. PSC 
has longed believed that both the public and private sectors 
would benefit from the ability to exchange key managerial and 
professional talent for temporary assignments along the lines 
that GAO is proposing.
    And, finally, the name Government Accountability Office is 
a clearer description, I believe, of GAO's role and 
significance than the name General Accounting Office. People 
with whom GAO interacts, at least outside of the Beltway, will 
have a better understanding of GAO if the name is changed.
    Even more important is the effect the name change would 
have on recruiting. Which would you prefer? A job opportunity 
with an organization that basically does accounting, or one 
with an organization charged with helping Congress ensure that 
Federal agencies are accountable?
    Chairman Davis and members of the subcommittee, this 
concludes my prepared statement. And I would be pleased to 
respond to any questions you may have.
    Mrs. Davis of Virginia. Thank you, Mr. Smith.
    [The prepared statement of Mr. Smith follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Davis of Virginia. I would now like to recognize Mr. 
Paul Light of the Brookings Institution. I thank you, Mr. 
Light, for being here with us here today. You may proceed with 
your statement.
    Mr. Light. I am delighted to be here too.
    This is probably my shortest statement in record. I wish 
you had sent me something more controversial and difficult to 
critique. My job in a think tank is like any think tanker. We 
wait for someone to roll a ball of yarn into the room and we 
attack it. And there is not a whole lot to attack here. I like 
this proposal. I agree with my colleague, Pete Smith. I find 
little reason not to move forward, especially with the kind of 
protections that my Representative who speaks for me today, 
would argue need to be in the bill in terms of reporting, as 
you are arguing, Congressman Davis, as well.
    On both process and substance, I find a lot to admire here. 
I do like the fact that the Comptroller consulted widely with 
his employees. I am a survey researcher by training. I can 
design a survey to find out what the employees think. You would 
find variation. You go from the top down through the bottom, 
you are going to find variation on what people fear.
    You have here an expression of experimentation. I think it 
is instructive to note that GAO has been working on pay banding 
for 20 years now. Started under Chuck Bowsher. I remember being 
on the Senate Governmental Affairs Committee Staff when 
Comptroller General Bowscher asked for these authorities, and 
they have been working at it.
    They have evaluated it carefully, thoughtfully over time to 
take a look at where they need to improve, and most importantly 
I think, and this is where we do have concerns about the 
Defense Department breakout, if you will, is that they put a 
lot of money into training managers. This is tough stuff. You 
have to sit down with the employees every once in a while and 
talk to them about how they are doing.
    There is the 80/20 rule in performance appraisal. It is a 
real fact that 80 percent of your employees believe that they 
are in the top 20 percent of performers. That means every year 
you are sitting down with them trying to convince them that 
they are wrong about themselves. That takes guts and that takes 
training, and GAO has invested a lot in it.
    And over time this pay banding system has come to represent 
the very best practice in government. It is a very good system. 
I send a lot of students into it, graduates of various programs 
at which I have taught. And it really is a motivator.
    Now, on the substantive side, I think this continues 
progress toward pay for performance, which I believe in. I 
believe in a performance sensitive system. There is a clear 
concern within GAO, from the statics that they provided on what 
we might call band creep. We have all heard about grade creep, 
where you see the movement upward over time as the work force 
ages, up through the General Schedule. Here you have good 
evidence that there has been little band creep.
    We can't see what is happening within those bands in terms 
of how people are moving, but the overall evidence suggests 
that GAO is paying very clear attention to making sure that 
resources are placed where they belong, which is in the middle 
and lower levels where the work gets done.
    There are highly specific criteria for how you make the 
decisions on performance. My statement would have been half as 
long if I hadn't taken advantage of the opportunity to 
criticize this administration's decision to give bonuses to 
political appointees. I think it is absolutely wrong. I do not 
think it is defensible under any set of criteria.
    I understand that the Clinton administration ordered that 
it not be done, and it was done by some agencies, and we know 
that it is being done by some agencies in the Bush 
administration, but not others. Nevertheless, I won't talk 
about that unless you really want to drill into it, because we 
could go on for a long time about that one.
    Finally, the substantive proposal carries clear evidence of 
effect. It works. So when you've got something that works, you 
say, let's do a little bit more. Let's see whether we can push 
it a little bit more. And you've got to get the money for that 
from someplace. I do believe that the 5-percent who are not 
doing their jobs ought to get a big zero. I just think that is 
part of accountability in the system. And I think you have to 
be careful about how you put them in that bottom category, but 
that is where it goes.
    Final point on the name change. You know, my reaction is 
that, you know, my last name is on beer cans and gutters all 
over America. All right. An agency by any other name is going 
to perform as well. My reaction to the name change was, I sure 
wouldn't spend a lot of political capital on it. But, if GAO 
wants the name changed, why not? If that is what they think 
they need, I find no evidence that we should not give it to 
them. They have done a really terrific job with these 
authorities.
    One second to spare. Thank you very much.
    Mrs. Davis of Virginia. Thank you very much. We will try to 
get you a bigger ball of yarn next time.
    [The prepared statement of Mr. Light follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Davis of Virginia. Mr. Davis.
    Mr. Davis of Illinois. Thank you very much, Madam 
Chairwoman.
    Mr. Smith, you mentioned individuals with less than 5 years 
of service not being suited for--or rules, some of the work 
force rules not being suited for them. Could you elaborate a 
bit on that?
    Mr. Smith. Yes, Congressman. You put it that way, it 
doesn't sound too sensible. What I said was over 30 percent of 
the work force has less than 5 years service, which means that 
the work force is either very young or there are new people 
coming in at higher levels. It is a combination of both of 
those things.
    When the Civil Service rules were designed, in most of the 
working world, the expectation was you would go to school, 
graduate, get a job with a good employer and stay there, 
probably for the rest of your career, or maybe make one or two 
changes early in your career, then find the right place and 
stay throughout the entire career. So longevity made a lot of 
sense, waiting 10 years to get vacation pay at a reasonable 
level made a lot of sense.
    Now, whether it is Generation X or whatever follows 
Generation X, or it is people moving, the work force is so much 
more mobile, that people coming in don't look at the workplace 
the same way. Pension plans in the private sector for example, 
and I imagine to some degree the Federal sector, aren't as 
intriguing to people who think that they might end up working 
for 5 or 10 employers or go to a few employers and go out on 
their own.
    So to attract people, to respond to their interests and 
needs, to give the kinds of H.R. programs that employees want, 
you have to be much more flexible today than under Title 5. So 
that is what I was trying to say. I wasn't saying that new 
people are totally different from the old people, it is a blend 
of those things.
    Mr. Davis of Illinois. You also suggested that bias and 
favoritism could be overcome in a merit system by training and 
by auditing the process. How much, or how devoted can an agency 
be to that?
    Mr. Smith. Well, an agency putting in performance pay in 
any real way has to be very devoted to that. It is true in any 
private sector company, you have to be careful, because bias 
can creep in there. But, obviously with changes in 
administration and political favoritism being a very important 
added ingredient in the government environment, it is necessary 
to make sure that performance criteria are set up very clearly, 
that they are checked and thought through with the kind of 
process that the Comptroller General and his management team 
have put in place, that audits are in place to make sure that 
there isn't favoritism, that their appeals process is in place, 
for employees who feel that they have been unfavorably treated 
for reasons of bias that don't have to do with their 
performance, can go and make an appeal through the management 
channels and other channels and so on and so forth.
    So I think it is very important that those processes be in 
place.
    Mr. Davis of Illinois. Mr. Light, I must confess that I 
find your approach to be quite refreshing, not just in terms of 
the name, but also in terms of the way you express your 
professionalism. You indicated that this proposal came through 
the kind of process that you would like to see all agencies go 
through, and you mentioned some of that. Could you describe 
what you think that process has been?
    Mr. Light. Well, we had a very contentious hearing several 
weeks ago here, as you will recall, around the Defense 
Department's proposal where there had been no consultation. I 
don't think employees are going to go with you on everything, 
obviously.
    But, if they feel that the process by which you reached 
your decision, whether it is a decision about your annual 
adjustment, whether it is a decision about the promotions that 
are being given, or whether it is a decision about a big system 
change like this, like DOD, I think that if you create a 
process that they think is fair and open, you have gone a long 
way to getting their buy-in whatever you do.
    That means that you sit down and you let them fire at you. 
You sit down with the employee representatives beforehand and 
you say, here is what we are thinking of doing. We don't have 
it perfect, do you have some insights for us? I think one of 
the most important achievements in this process came over in 
the U.S. Senate where we had a deliberate effort and the time I 
think that this subcommittee and the full committee could have 
used to reach some bipartisan consensus on how to do the DOD 
bill. And still we are a long way from, perhaps, where we could 
have ended up with a more aggressive process.
    So I think it is just consultate, consultate, consultate. 
You just have to get out there and talk and work and expose 
yourself, as I think the Comptroller General did, to the 
opinions of your employees. And sometimes it is not going to 
feel good, but you just have to keep the dialog going.
    Mr. Davis of Illinois. Thank you very much. Thank you, 
Madam Chairwoman.
    Mrs. Davis of Virginia. Thank you, Mr. Davis.
    I wanted to just pose a question to both of you. Since GAO, 
any change we make in the their human capital system will 
probably be looked at closely as a model, like I said earlier. 
Do you believe that these flexibilities would be advantageous 
to all Federal agencies in performing their respective duties?
    Mr. Smith. Let me answer that first, Paul.
    Yes, I do. As long as all Federal agencies do the 
groundwork that Paul has just been talking about, in terms of 
reaching out to employees and making sure they are right. I 
mean, the Federal work force contains such a variety, as you 
well know, of skills and experience.
    GAO in large part is a professional service firm with those 
kinds of capabilities, actuaries, accountants, lawyers and 
analysts. Very different from, let's say the Forest Service, 
which is very different from the Centers for Disease Control, 
and we could go on and on with different kinds of examples.
    To take what is working at GAO and just put that, without a 
lot of thought and effort, into these other agencies could work 
fine, but they could be totally inappropriate. I would say the 
elements of what GAO is asking for, management flexibility 
about pay, pay for performance, good performance management, 
building on their pay banding system, are all good ideas that 
should be explored and could well serve as models for other 
agencies.
    I would also add that I feel that OPM and other 
organizations are doing very good work trying to define where 
changes in Civil Service regulations, along those lines, might 
make sense. So I am all for what he is doing. And I am all for 
looking into these models, but again, you have to be very 
careful before you pick them up and put them down in another 
agency.
    Mr. Light. I may have said at the beginning of my testimony 
that I did not think that this is a template, the template that 
you are seeking for the rest of the Federal Government. I mean, 
this is 20 years in the making that has taken us to this point. 
And I go back to this issue of training and the sort of 
creation of a culture that is committed to honest exchange and 
evaluation.
    I mean, the Comptroller talks about 5 percent of his 
employees who do not meet expectations. In the Federal 
Government it is less than 1 percent who get that grade every 
year. It just takes time to build that culture of honesty. So I 
have always viewed GAO as this curious treasure that you can't 
really replicate much of anything that goes on there.
    I know the Comptroller won't agree with that, but it really 
is an unusually wonderful agency, a real treasure for our 
government. And I like to look at it as a test bed, but I am 
from Minnesota, and we like to believe in Minnesota that 
everything we do can be exported, but you know it can't. So you 
have to be careful.
    To take a look at their evaluations, see what they invested 
to get here, I think, is the trick. How did they make it to the 
point where we can trust them with these kinds of authorities, 
where you have this kind of love-in around this proposal. And I 
think that takes time and a lot of commitment. I don't think 
most Federal agencies can handle it. Some maybe, but not most.
    Mrs. Davis of Virginia. And you know my concern. We keep 
having these hearings. I just keep waiting for the next shoe to 
drop, which agency next wants to revise itself or transform. 
And I just don't want to do it piecemeal. That is my real 
concern.
    Mr. Light. I strongly encourage your work on that. The line 
is forming. It already started coming through the front door. 
It is worse than any line I saw for Terminator 3, it is worse 
than any line that you can see at any Blockbuster, and I am 
telling you, they are all waiting. Because once DOD is out, I 
think that the cascade is going to be throughout the 
authorizing committees.
    So, you know, you have a real challenge here to say, OK, 
listen, we are going to put our stake in here on the issue of 
this template. So good for you and good luck to you. I think it 
is very important.
    Mrs. Davis of Virginia. We need it.
    Mr. Smith. Could I add two points there?
    One is that in terms of time, as Paul says, GAO has taken a 
long time to develop these things. So they are good things. And 
they would work well in many agencies, however the agencies may 
just not be ready yet.
    The second comment I want to make addresses the question, 
why is the line forming so long? I don't think the line forming 
is so long because everybody wants goodies, I think the line is 
forming quickly because everybody recognizes the old Civil 
Service system isn't a good way to manage. They want better 
ways.
    And that should be supported. The fact that they want 
better ways should be supported. How they get them is another 
question. And I totally support the need to do the kinds of 
things that Paul is talking about.
    Mrs. Davis of Virginia. Thank you, Mr. Smith.
    Mr. Light, you might be able to help me on this one. On the 
exchange program, I can see the advantage for the folks in GAO 
to go out into the private sector. Help me understand what 
advantage it is going to be for the private sector to come into 
GAO?
    Mr. Light. Well, they have that great building and that 
cafeteria.
    Mrs. Davis of Virginia. That is what I thought you were 
going to say. But how about some real meaty substance to that.
    Mr. Light. Well, I think that, you know, you've got to----
    Mrs. Davis of Virginia. Just to get them out of the private 
sector so we have room for folks, right?
    Mr. Light. GAO has a very good reputation out there. And I 
think that, you know, we just came out of the field as we call 
it, with the survey of college seniors, about-to-graduate 
college seniors.
    You know, there is an incredible desire for public service 
in this country. I don't call it redemption. I mean, you can go 
to the private sector and have a wonderful life, and that is 
fine, you do your volunteer work, and your board work and so 
forth and so on. But there are a lot of Americans who want to 
give something back. And GAO has a very good reputation out 
there. And for people who do the kinds of things that GAO does, 
I mean, you are right at the top of the policy advising chain 
at GAO. You can have--you can make a big difference.
    So I think that is a very attractive feature for private 
sector people.
    Mrs. Davis of Virginia. Thank you, Mr. Light. My time is 
up. Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Madam Chairman. Let me just pick 
up on a couple of points that both of you raised. And I think 
they are excellent points. GAO has a culture of having worked 
with this kind of evaluation system over a period of time. They 
have sort of road tested it before they actually put the pay-
for-performance piece on top.
    And, as Mr. Smith said, many agencies may not be ready for 
it. If they had built up those systems over time, then it may 
be one thing. But, having not laid the groundwork, it is 
another thing. And since, as Mr. Light said, his testimony was 
short with respect to GAO because he is confident in the 
proposal they are putting forth. I would like to disucss the 
DOD bill, which as you know the House has passed a version, the 
Senate has passed a version.
    The Senate version I have some concerns with, but it is--as 
you described, Mr. Light, in your testimony--a bipartisan 
compromise, at least on that side. And I would like your 
thoughts, if you are prepared to give them today, as to 
whether--if you could vote one of the bills out of conference 
today--you would take the Senate compromise? And if so are 
there any additional protections that you would want to place 
in it?
    Mr. Walker talked about, even with the rigor of the GAO 
system, a 2-year moratorium with respect to putting this in 
place with respect to many of his employees. Would you 
recommend that, given the fact that DOD has no experience with 
the kind of rigorous evaluation systems of GAO? Would you, on 
top of whatever protections are in the Senate bill, suggest 
that we have some period of moratorium before we allow it to go 
forward in full?
    Mr. Light. I am under oath, I recall. Without insulting 
this fine committee and this body, I think the Senate bill is 
the right bill. I know that my colleagues at the Defense 
Department complain that the bill does not provide what they 
want. But, as the old Rolling Stones song tells us, sometimes 
you don't get what you want but you get what you need.
    I think the Senate bill is what DOD needs. I think that the 
big problem that we did not talk about in that bill was the 
manager's ability to use the authorities. Nobody talked about 
that. We all talked about what the front line needed. We spent 
all of our time arguing about that.
    But, you have a bunch of managers over in DOD who are 
architects of a hyperinflated performance appraisal system. 
They are the ones who do that year after year. I understand why 
they inflate the system. I understand the reasons for it.
    But, the one thing that I do not see in that legislation is 
a very serious commitment to the training dollars needed to get 
those managers up to speed.
    The phase-in, the DOD folks say that they can already get 
130,000 in without, under current law, without phase-in. I kind 
of like the idea of some sort of phased-in approach so that 
they can get some experience as they move forward, start with 
the agencies, the research labs and so forth, where you can get 
good, quick implementation and see how things are working.
    But, if I had to chose between the two, I would pick the 
Senate bill. I think having Democrats involved in this 
conversation is so important to the legitimacy of the 
implementation of that legislation, this cannot be a one-party 
issue. It has to be bipartisan. And I just think that alone is 
worth everything in that compromise.
    Mr. Van Hollen. Thank you. Do you have any thoughts on it, 
Mr. Smith?
    Mr. Smith. I would just add two things.
    One thing is that as these different agencies, DOD and 
others, come in and ask for flexibilities, may be fine. But 
someone in Congress needs to be looking carefully at the issue 
of what really needs to be the same across all of the executive 
branch, and what should be allowed to be different.
    There are some things that should be very different. As I 
said before, the jobs differ. But if are there are going to be 
some common approaches, if the SES, for example, is going to 
change and be a really skilled mobile management force, 
crossing from Department to Department and agency and agency, 
then somebody needs to take a look at that as these individual 
Department reforms are done. I think the DOD reform effort is 
part of that.
    The other thing is, while I think the administration, by 
and large, has done a very good job focusing on management 
issues--picking up work that has been done by previous 
administrations--I think the one area where they need a lot 
more attention is employee communications, generally of the 
kind that the Comptroller General has done.
    I don't see a lot of that done. I think it is a big problem 
in implementing any change, no matter how well designed it is.
    Mr. Van Hollen. Thank you. It is a huge problem based on 
the feedback that I am getting from lots of people, but I 
appreciate your comments. I am grateful that the ranking member 
of the committee made me a conferee on the bill. I will take 
your thoughts into account, both of you, during the conference.
    Thank you very much.
    Mrs. Davis of Virginia. Thank you, Mr. Van Hollen.
    In closing, I would like to again say thank you to all of 
your witnesses for their participation, and to let the panel 
members--to let the members of the committee know that we will 
reconvene for a business meeting at 3:40, and this subcommittee 
now stands adjourned.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned.]

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