[Senate Hearing 109-814]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-814

   PREPARING FOR TRANSITION: IMPLEMENTATION OF THE NATIONAL SECURITY 
                            PERSONNEL SYSTEM

=======================================================================

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                THE FEDERAL WORKFORCE, AND THE DISTRICT
                        OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

            FIELD HEARING AT FORT DERUSSY, HONOLULU, HAWAII

                               __________

                             APRIL 12, 2006

                               __________

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs





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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
   Joyce A. Rechtschaffen, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                  GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
NORM COLEMAN, Minnesota              CARL LEVIN, Michigan
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

                   Andrew Richardson, Staff Director
              Richard J. Kessler, Minority Staff Director
            Nanci E. Langley, Minority Deputy Staff Director
                      Emily Marthaler, Chief Clerk






























                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1
    Senator Akaka................................................     3

                               WITNESSES
                       Wednesday, April 12, 2006

Maureen U. Kleintop, Deputy Chief of Staff for Total Fleet Force 
  Manpower and Personnel, Commander, U.S. Pacific Fleet..........     6
Jeffrey T. Wataoka, Director, Human Resources Service Center 
  Pacific, Department of the Navy................................     8
Michael L. Vajda, Director, Civilian Human Resources Agency, U.S. 
  Army, Aberdeen Proving Ground, Maryland........................    10
John C. Priolo, Retired President, Chapter 19 Pearl Harbor Naval 
  Shipyard, Federal Managers Association.........................    21
Benjamin T. Toyama, International Vice President, Western Federal 
  Area, International Federation of Professional and Technical 
  Engineers (IFPTE), AFL-CIO CLC and Vice President of IFPTE 
  Local 121, Pearl Harbor Naval Shipyard.........................    23
Don Bongo, Vice President, Hawaii Federal Employees Metal Trades 
  Council, AFL-CIO CLC and Sergeant First Class, E-7, Hawaii 
  National Guard, 227th Engineer Company (combat), 29th Brigade..    25

                     Alphabetical List of Witnesses

Bongo, Don:
    Testimony....................................................    25
    Prepared statement...........................................    86
Kleintop, Maureen U.:
    Testimony....................................................     6
    Prepared statement...........................................    35
Priolo, John C.:
    Testimony....................................................    21
    Prepared statement...........................................    60
Toyama, Benjamin T.:
    Testimony....................................................    23
    Prepared statement...........................................    79
Vajda, Michael L.:
    Testimony....................................................    10
    Prepared statement...........................................    54
Wataoka, Jeffrey T.:
    Testimony....................................................     8
    Prepared statement...........................................    48

                                APPENDIX

Questions and answers submitted for the Record from:
    Ms. Kleintop with attachments................................    89
    Mr. Wataoka..................................................   112
    Mr. Vajda....................................................   130
    Mr. Priolo...................................................   153
    Mr. Toyama...................................................   156
    Mr. Bongo....................................................   159




















 
                       PREPARING FOR TRANSITION:
                    IMPLEMENTATION OF THE NATIONAL
                       SECURITY PERSONNEL SYSTEM

                              ----------                              


                       WEDNESDAY, APRIL 12, 2006

                                 U.S. Senate,      
                Oversight of Government Management,        
                        the Federal Workforce and the      
                     District of Columbia Subcommittee,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 1:37 p.m. 
P.S.T., in the Asia-Pacific Center for Security Studies, Fort 
DeRussy, Honolulu, Hawaii, Hon. George V. Voinovich, Chairman 
of the Subcommittee, presiding.
    Present: Senators Voinovich and Akaka.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. This hearing will come to order. This is 
a hearing of the Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia 
of the Committee on Homeland Security and Governmental Affairs.
    I would like to remind everyone that this is an official 
hearing of the U.S. Senate, and Senator Akaka and I discourage 
audience participation except for the witnesses.
    We thank you all for coming. The title of today's hearing 
is, ``Preparing for Transition: Implementation of the National 
Security Personnel System.'' Senator Akaka and I were both 
involved in the consideration of the National Security 
Personnel System in 2003, and we have both followed its 
development closely. We held two oversight hearings 
specifically on NSPS last year, and we hope to hold another one 
later this year. We have also held five other hearings on the 
various challenges confronting the Federal Government's 
national security workforce over the last several years. We've 
been working on this for about the last 7 years, haven't we, 
Senator Akaka?
    Senator Akaka. Yes we have.
    Senator Voinovich. I would like to publicly mention, in 
Senator Akaka's home State, the high regard that I have for 
Senator Akaka. He does an excellent job of representing the 
interest of his constituents. Occasionally we have differences 
of opinion about issues, but what we try to do is find those 
things that unite us rather than divide us. I've gotten to know 
Senator Akaka through our Thursday Bible studies in the U.S. 
Senate. Senator Akaka, his wife Millie, and his family are a 
real asset to the U.S. Senate. The people of Hawaii should be 
proud of Senator Akaka, a man of high integrity, a man who 
works hard, and a man who represents his State, but also 
considers what's in the best interest of the country.
    I was concerned right from the start that the 
implementation schedule for NSPS was much too fast, and Senator 
Akaka also is very concerned about that.
    In fact, it appeared that the Defense Department might try 
to put NSPS into effect by October 2004. Can you imagine? I 
scheduled a meeting with the Department's top leaders on March 
30, 2004. I met with Deputy Secretary Paul Wolfowitz and then-
Secretary of the Navy Gordon England, and urged them to slow 
down the implementation schedule for NSPS. I stressed to them 
that doing it right was much more important than doing it 
quickly. They agreed and slowed down the process considerably, 
and since then, I believe the Defense Department, in 
partnership with the Office of Personnel Management, has 
proceeded thoughtfully and carefully.
    I think everybody understands that NSPS is here to stay: 
That's a given. I believe, for several reasons, that it has an 
excellent chance for success.
    First, top leaders of the Department, most notably Deputy 
Secretary of Defense Gordon England, are involved. Second, DOD 
has decades of experience with alternative personnel system. 
DOD has more experience with this than probably any other 
department in the Federal Government. The defense labs, which 
we have at Wright-Patterson Air Force Base in Dayton, Ohio, 
have had this for several years and it's worked out terrific 
for them. Third, the Defense civilian workforce, in my view, is 
one of the more motivated in the Federal Government. It has a 
clear mission and sense of purpose. And finally, the military 
culture, which is a strong presence in DOD, already requires 
that all military personnel receive a written annual 
performance appraisal, so there's a culture here throughout the 
Defense Department. This appraisal system affects awards and 
pay through promotions. In other words, if you're doing your 
job and you move up, you get more money, and if you don't, you 
don't get the promotion and you don't get the money.
    Now, 2\1/2\ years after it was authorized, NSPS will go 
into effect on April 30. Today we are focused on where the 
rubber meets the road. Thousands of miles from Washington, DC, 
where we debated and established this system, we want to learn 
what's going on.
    Today we're talking about some 250 people here in Hawaii, 
and they are just the first of over 16,000 DOD civilian 
employees in Hawaii who will eventually be in NSPS. We have 
thousands of people in Ohio who will also go into NSPS. In 
fact, the train-the-trainer sessions are taking place in Ohio, 
and I'd be interested to hear what you think about it.
    The components we are examining today are now the 
laboratory. Our oversight must focus on ensuring that NSPS is 
properly funded and thoughtfully, fairly, and deliberately 
implemented.
    I am particularly interested in learning about the 
training, as I mentioned to you, and I'd like to hear exactly 
how the Defense components are implementing NSPS and how they 
are preparing their people for the enormous changes in 
workplace management that are under way. I would like to hear 
from the employee representatives what they are doing to make 
sure that NSPS is a success, and what suggestions they may have 
for improving the implementation of NSPS. I look forward to a 
productive session.
    I would mention that I implemented personnel reforms when I 
was mayor of the City of Cleveland. It was very difficult. 
That's when I really started to understand how important 
training is, so that employees understand what is expected of 
them. Training should also be of good quality and it must be 
done properly.
    When I was governor of Ohio I instituted total quality 
management. We called it QSTP, Quality Services Through 
Partnership. The first thing I did was to attend 4 days of 
training with my labor leaders. I was there and took the time 
to learn the new system. We really worked hard on getting 
people to understand what Quality Service Through Partnership 
meant. And what started out as something that the unions 
thought would be bad, turned out to be the best thing that we 
ever did. It was the first time that they could recall that 
they were empowered to be involved in examining their work and 
how they could improve.
    Now, the tough job was changing the culture of our middle 
managers, because they had spent their careers in a command and 
control environment. So this was the hardest thing to overcome.
    I would really appreciate it if everyone would have an open 
mind on this issue, give DOD a chance to move forward with it. 
If it's not working out the way it should be, we'll do 
everything that we can to make sure that we correct those 
things. We know it's not perfect, but I think it's really in 
the best interest of our country and our employees.
    I now yield to my good friend, Senator Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much. I want to say mahalo to 
my Chairman, George Voinovich, and I also want to welcome his 
lovely wife, Janet, who is here with us. Will you raise your 
hand? Thank you for joining us today. And to all of you, as we 
say in Hawaiian, aloha auinala, which is good afternoon, too.
    I want to thank my Chairman for holding this field hearing 
on the National Security Personnel System in my home State of 
Hawaii. Sometimes you think about wanting to do something like 
this, and think about how hard it is and you think, well, it 
can't happen. Well, it has happened. The Chairman is here and 
I'm here, and I'm really indebted to him for having this 
hearing here in Hawaii.
    Chairman Voinovich and I have worked very well together, in 
a bipartisan manner, and the reason is he's easy to work with, 
and he's very open-minded. The difference is that besides being 
a Senator and former mayor, he was also a governor. He's had 
all these experiences with people in different levels of 
government, and knows government. And so I really appreciate 
working with him.
    And I'm also happy to join and welcome our distinguished 
witnesses and our equally distinguished audience. I extend a 
special thank you to General Hirai because you have just become 
the deputy director. I want to thank you and the staff at the 
Asia-Pacific Center for Securities Studies for making available 
the center today. The Center has made Hawaii the gateway for 
the Department of Defense's interactions with Asian militaries, 
and the Center's importance will only grow in this Age of the 
Pacific.
    I've been here before, and I have witnessed what goes on 
here. What's great about this place is that it creates 
relationships that build confidence and knowledge of the United 
States with other countries. The Center has been a real benefit 
to the United States over the years.
    Mr. Chairman, like you, I have heard from numerous Defense 
Department employees about their concerns with NSPS, and I 
appreciate your working with me to provide a local forum to 
discuss one of the most critical elements of NSPS, employee 
training.
    Nothing is more important to the Federal Government than 
how it hires, fires, compensates, and evaluates its employees. 
Federal employees are the ones charged with the public's trust 
to carry out agency missions. Since such employee programs go 
to the very heart of agency performance, training for these 
programs is critical, as is ensuring that there are mechanisms 
in place to assess the effectiveness of training.
    This hearing provides us with a unique opportunity to 
review the training and communication programs for managers and 
employees who will transition into Spiral 1.1 at the end of 
this month.
    We want to know who has been trained, what kind of training 
they are receiving, how the training is being delivered, how 
the training programs are being evaluated and coordinated, and 
what the cost is of such a massive undertaking.
    Getting training right on the front end of the 
implementation of NSPS could promote greater employee 
understanding. Getting it wrong will send managers and 
employees on a scavenger hunt to figure out for themselves 
what's happening, when it's happening, to whom it's happening, 
and this could lead to misinformation.
    NSPS represents a huge cultural change for DOD civilian 
employees, and setting aside my personal feelings on NSPS, I 
want to explore what I see as a decentralized training regime. 
While I understand the design and the need to place training 
responsibilities within individual service commands, I am 
concerned that this could lead to inconsistent training that 
will benefit no one. Because pay under NSPS will depend on 
effective training, there is no room for uneven or unequal 
training opportunities.
    For a system that rests so heavily on a manager's ability 
to make meaningful performance distinctions among employees, 
whose pay and work will be directly impacted by these 
managerial decisions, there must be strong oversight, 
accountability, and transparency.
    My understanding is that while the Project Executive Office 
(PEO) in Washington, DC, developed the training programs, 
individual commands are responsible for providing and funding 
all training for its personnel. In Hawaii, the vast majority of 
those going into Spiral 1.1 will be Navy civilian personnel. 
Given the Navy's emphasis on the One Shipyard Vision, I am 
curious whether all Navy commands will use the same approach 
for NSPS training. However, it is important to note that Pearl 
Harbor Naval Shipyard is mission funded unlike the other three 
shipyards. Given that our Shipyard is mission funded, I will be 
interested to know whether the Department will provide 
additional funds for the training.
    If agility and flexibility are the end game in this pay-
for-performance system, then training must be consistent so 
that no employee is at a disadvantage.
    DOD's civilian managers, who are the backbone of the new 
system, must have training that will provide them with the 
skills and understanding to foster collaborative relationships 
with their employees, especially in areas like developing 
performance expectations. We must make certain that managers, 
over half of whom are eligible for retirement, by the way, are 
given the support and resources necessary to carry out the 
implementation of NSPS.
    Mr. Chairman, again I want to thank you so much for holding 
this hearing here. and I feel that the Asia-Pacific Center is a 
great place for this kind of hearing because this is a place 
where we will build relationships.
    Senator Akaka. Also, since the Chairman did mention that we 
didn't want any responses from the audience, I want to just 
point out that I have staff here that would be willing to meet, 
in case you have a concern, with those in the audience and pass 
on your concern. If you do, they'll be out in the lobby. I want 
to introduce them both, Nanci Langley and Jennifer Tyree, for 
all their work. Thank you very much, Mr. Chairman.
    Senator Voinovich. Thank you, Senator Akaka. I'd like to 
second the thanks to those responsible for welcoming us to this 
excellent facility. I am pleased that Jennifer Hemingway, a 
member of the staff of Senator Collins' Homeland Security and 
Governmental Affairs Committee, is present with us. I 
especially would like to thank Nanci Langley of Senator Akaka's 
staff for the work that she did in preparation for this 
hearing. In addition, I would also like to thank Andrew 
Richardson from my staff, who's this Subcommittee staff 
director, for all the work that you and your team have done for 
this hearing.
    We are very fortunate today to have three wonderful 
witnesses. We have Maureen Kleintop, the Deputy Chief of Staff 
for Total Fleet Force Manpower and Personnel, of the staff of 
the Commander, U.S. Pacific Fleet. Jeffrey Wataoka, the 
Director of the Human Resources Service Center Pacific of the 
Department of the Navy. And Michael Vajda, the Director of 
Civilian Human Resources Agency, in Aberdeen Proving Ground of 
the Department of Army, so I'm glad to have you all here.
    We have a custom in this Subcommittee that we swear in our 
witnesses, so if you'll please stand, I will administer the 
oath.
    Do you swear that the testimony you are about to give this 
Subcommittee is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Please have the record note that all witnesses have 
answered in the affirmative.
    I'd like all of you, if possible, to keep your statements 
to 5 minutes or less. Your entire written testimony will be 
entered into the record. There is a good possibility that we 
will not be able to ask all the questions we would like, so we 
may submit to you some questions in writing.
    Ms. Kleintop, please proceed with your testimony.

TESTIMONY OF MAUREEN U. KLEINTOP,\1\ DEPUTY CHIEF OF STAFF FOR 
   TOTAL FLEET FORCE MANPOWER AND PERSONNEL, COMMANDER, U.S. 
                         PACIFIC FLEET

    Ms. Kleintop. Thank you. Good afternoon, Chairman Voinovich 
and Senator Akaka. I'm very pleased to be here this afternoon 
to discuss the implementation of the NSPS at COMPACFLT 
Headquarters. This afternoon I'll cover how we have prepared 
for the NSPS, and how NSPS will further our mission.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Kleintop appears in the Appendix 
on page 35.
---------------------------------------------------------------------------
    Admiral Roughead, as Commander of the Pacific Fleet, 
believes our civilian workforce is vital to accomplishing our 
mission. In his recent Commander's Intent entitled ``Enhancing 
Asia-Pacific Sea Power,'' he focuses on four areas that 
maximize our contribution to regional security and stability. 
These are: Warfighting readiness, force posture, regional 
relationships, and future preparedness.
    Our civilian workforce is key in every area. It is 
essential that we have a human resources system that is capable 
of supporting and protecting their critical role in COMPACFLT's 
total force effectiveness.
    COMPACFLT Headquarters volunteered to be among the first of 
the Department of Defense organizations to implement NSPS. We 
have a successful record of leading transformational change and 
a strong commitment to building a high performance workforce. 
On April 30, 2006, 170 employees assigned to COMPACFLT 
Headquarters command will convert to this new personnel system.
    To compare the employees for this conversion, we have taken 
an assertive and responsible approach. We have implemented a 
very rigorous training program and have maintained open lines 
of communication to ensure the workforce that we are committed 
to their success.
    About a year and a half ago, I appointed a project manager, 
a change management agent, a training program manager, and 
chartered an NSPS implementation team. Our project manager and 
the implementation team launched a massive communication effort 
that incorporated the use of our on-line knowledge management 
tool called eKM. Almost 300 documents including news items, 
memos, and newsletters, and links to NSPS have been posted on 
this particular eKM. We have also distributed NSPS brochures 
developed by the Department's Project Executive Office.
    We took a very proactive approach in providing informal 
education sessions and established networks with local DOD 
activities here in the islands. We hosted and invited local 
representatives to participate in the following events and 
training sessions:

     LBeginning in July 2004, town-hall meetings hosted 
by Ms. Pat Adams, who's the Deputy Assistant Secretary of the 
Navy for Civilian Human Resources.
     LFebruary 2005, roundtable discussions led by 
China Lake's demonstration project, human resorces management 
team.
     LFrom February through September 2005, we 
conducted informational sessions facilitated by our project 
manager and the change agent that we basically brought on 
board.
     LOn May 31, 2005, we hosted a question-and-answer 
panel discussion led by some of our own employees who had demo 
experience or who had private industry experience with pay-for-
performance.
     LFinally, in August 2005, the Department of Navy's 
Project Management Officer came out and conducted an executive-
level presentation, a briefing for managers and supervisors, a 
town-hall style briefing, and a meeting with members of the 
Federal Managers Association at the Pearl Harbor Naval 
Shipyard.

    So that kind of gives you a sense of some of our informal 
sessions.
    We've incorporated a blended approach to our NSPS strategy, 
and, sir, we were fortunate enough to send 10 of our employees 
to Columbus, Ohio, to receive the training, train the trainer, 
on the human resorces technical elements, and, in fact, some of 
them are here today and probably could attest to that training. 
This approach, our blended approach, includes the following: 
Former classroom training, some facilitated workshops, and some 
e-learning courses.
    The Navy's Knowledge On-line (NKO) site hosts DOD's web-
based training and the Department of Navy's e-learning 
curriculum. Our soft-skilled training entitled ``Coaching for 
High Performance'' was launched in April 2005. We trained a 
total of 114 managers and supervisors, not only from COMPACFLT 
Headquarters, but other local activities in Oahu.
    From January through March 2006, we conducted 19 follow-on 
workshops to assist our directors in developing organizational 
performance objectives cascading from Admiral Roughead's 
Commander's intent to create that kind of activity.
    DOD's web-based training, called NSPS 101, also provides a 
well-organized introduction to NSPS and features a conversion 
tool that our employees are now using.
    Last Friday, on April 7, 2006, COMPACFLT's top leadership 
flag and NSPS members attended a Senior Leader Forum that 
provided an executive-level overview not only of the NSPS 
architecture, but it also focused on their leadership 
responsibilities as well as the Performance Management System.
    Training on human resorces elements for managers, 
supervisors, and employees was initiated on April 5, 2006, and 
to date, we have trained over 200 managers, and supervisors, 
and employees, primarily from COMPACFLT Headquarters but also 
others from the islands.
    Our first of three ``Performance Management for Managers 
and Supervisors'' courses began on Monday of this week, April 
10, 2006. And beginning April 18, our employees will receive 8 
hours of Performance Management training and learn to develop 
their personal job objectives linked to the Commander's Intent 
that has been published by Admiral Roughead.
    Formal training on Writing Accomplishments and Pay Pool 
Management will be added to our training curriculum as soon as 
those courses are developed. By April 30, 2006, we will have 
trained almost 250 individuals on the technical aspects of 
NSPS.
    Successful execution of our communication and training 
strategies has prepared our workforce for the upcoming 
transition. We have built credibility into each aspect of our 
deployment plan by involving our people. The face-to-face 
communication structure provided by the implementation team, as 
well as event and training evaluations, allowed us to 
effectively incorporate employees' feedback into our 
strategies. All employees have been reminded that Merit System 
Principles, Equal Employment Opportunity, and Veterans 
Preference Policies remain unchanged under NSPS. We are 
confident in our ability to successfully implement this new 
civilian personnel system with a view towards minimizing 
employees' concerns while maximizing their participation and 
acceptance.
    NSPS will provide COMPACFLT Headquarters with the modern 
human resources system we need to attract and retain the talent 
that we require. A core NSPS objective is to provide an 
environment where employees will be encouraged to excel, 
challenged with meaningful work, and ultimately recognized for 
their contribution. By aligning our individual objectives with 
Admiral Roughead's mission objectives, NSPS ensures 
accountability exists at all levels.
    Thank you again for the opportunity to testify.
    Senator Voinovich. Thank you very much. Now, you're the 
Deputy Chief of Staff for Total Fleet Force Manpower, for the 
Commander, U.S. Pacific Fleet. Are you a career civil servant?
    Ms. Kleintop. Yes. I'm a member of the Senior Executive 
Service.
    Senator Voinovich. OK.
    Ms. Kleintop. Yes. And my background, sir, is predominantly 
in human resources management over the period of the last 35\1/
2\ years with the Department of the Navy.
    Senator Voinovich. So you've seen a lot of things come and 
go over the years?
    Ms. Kleintop. Absolutely. Not only in the civilian 
personnel sector, but as the de-cost, if you will, for total 
force management. Approximately 5 years ago, then Admiral Fargo 
gave me responsibility for the military personnel programs as 
well.
    Senator Voinovich. Thank you. Mr. Wataoka.

 TESTIMONY OF JEFFREY T. WATAOKA,\1\ DIRECTOR, HUMAN RESOURCES 
         SERVICE CENTER PACIFIC, DEPARTMENT OF THE NAVY

    Mr. Wataoka. Good afternoon, Senator Voinovich and Senator 
Akaka. I am Jeffrey Wataoka, Director, Human Resources Service 
Center Pacific. We have a workforce of 62 employees, and are 
one of seven HRSCs within the Department of the Navy. Our 
Headquarters is the Office of Civilian Human Resources, located 
in Washington, DC. Our Headquarters and all of our U.S. HRSCs 
are converting to NSPS as part of Spiral 1.1. I appreciate the 
opportunity to be here, to address how I helped prepare our 
employees for implementation of NSPS.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Wataoka appears in the Appendix 
on page 48.
---------------------------------------------------------------------------
    This September, I will have served in the Department of the 
Navy for 40 years. During my years of service in the human 
resources field, I've participated in many changes including 
those made under the Civil Service Reform Act of 1978. 
Effecting change is oftentimes challenging especially when the 
goals are significant and affect a wide variety of employees, 
and this is true of NSPS. From the outset, the Department of 
the Defense structured their plan to build trust and 
credibility with employees, and this is what I focused on, in 
the HRSC Pacific.
    NSPS--What's in it for employees? And four things come 
readily to mind: Recognizing and rewarding employees based on 
their personal contribution to the mission. Defining 
performance expectations between supervisors and employees. 
Encouraging employees to take ownership of their ownership and 
success. And promoting broader skill development and 
advancement opportunities in pay bands.
    To prepare employees for the transition to NSPS, I focused 
on three critical factors: Communication, training, and 
participation. I will now provide some details on each of these 
factors.
    First and foremost is communication, both oral and written. 
Face-to-face interaction, which started over 1 year ago, 
included ``all hands'' meetings conducted by supervisors and 
employees in our office to discuss proposed NSPS regulations 
and procedures. Employees also attended separate presentations 
and discussions with the Deputy Assistant Secretary of the Navy 
(civilian Human Resources); the Director, Office of Civilian 
Human Resources; and the Program Manager, NSPS Project 
Management Office; and also representatives from Demonstration 
Projects who have experience with the pay-for-performance 
system.
    Written material disseminated to the staff included NSPS 
regulations; the HR Primer on NSPS that highlighted key points 
on issues such as classification, staffing, performance 
management, compensation, and workforce shaping. We also shared 
newspaper articles that include information on pay issues, 
legal issues, and comments from employees regarding NSPS. 
Newsletters from the Deputy Assistant Secretary of the Navy, 
Office of Civilian Human Resources, as well as those that I 
issued at the local level were all disseminated to employees.
    So far, there have been 18 newsletters from the Deputy 
Assistant Secretary of the Navy. The most recent one is dated 
March 7, 2006. This newsletter covered such topics as facts 
about conversion, preparing for NSPS, and an update of 
training.
    Information on NSPS was also communicated to employees via 
various websites including those from the Department of Defense 
and the Department of the Navy. The Department of Defense 
website includes the regulations and frequently asked questions 
and answers. NSPS material was posted on our bulletin boards. I 
disseminated NSPS brochures to all employees, including those 
entitled ``Communicating With Your Supervisor,'' ``Focus on 
Performance,'' and the ``Role of the HR Practitioner.'' Video 
such as ``NSPS: Towards a Mission-Centered Workforce'' and 
``Appraising Performance'' were shown to employees.
    Finally, key members of my staff participate on biweekly 
web-exchanges in which the latest status of NSPS is discussed 
and questions answered.
    The second factor is training. Training under NSPS is 
comprised of soft skills and technical training, and, because 
we're a human resources office, additional informal and formal 
training has been or will be conducted for employees. Soft 
skill on-line training in the Department of the Navy taken by 
employees included ``Coaching for High Performance,'' 
``Listening Skills,'' ``Goal Setting,'' and ``Effective 
Communication.'' The technical training completed or scheduled 
to be completed for all employees by the end of this month is 
NSPS 101, which is an interactive web-based course, ``HR 
Elements for Practitioners,'' a 24-hour course, and 
``Performance Management.'' Both the ``HR Elements'' and 
``Performance Management'' courses are mandatory for all 
employees, including supervisors. Training that will be 
scheduled in the near future will include pay-pool management 
and pay-for-performance.
    The third factor is participation. Our employees have been 
involved in specific NSPS initiatives. Our Headquarters 
established teams with representatives from all of Spiral 1.1 
HRSCs to provide input on how NSPS will be implemented 
throughout our Command. These teams provided input on proposed 
regulations, conducting joint training, and participating in 
focus groups for development of job objectives and 
implementation teams involving information technology, 
conversion, classification, and recruitment. Employees 
identified and documented the employee development needs and 
participated in developing their own performance plan.
    HRSC Pacific employees have conducted training for our 
staff, on human resorces elements for human resorces 
practitioners, and will assist in training on performance 
management. I expect our staff will continue to be involved in 
formal and informal NSPS training in the future.
    We have been actively engaged in ensuring all employees 
understand NSPS and the effect of this new system on their role 
in furthering our important mission. Personally, I'm excited to 
begin deployment of NSPS and am continually committed to open 
communication, training, and involvement of our workforce in 
NSPS. I believe our employees are well prepared for NSPS 
implementation and will soon embrace it as a means to improved 
performance.
    Thank you for the opportunity to testify.
    Senator Voinovich. Thank you very much for your testimony. 
Mr. Vajda.

  TESTIMONY OF MICHAEL L. VAJDA,\1\ DIRECTOR, CIVILIAN HUMAN 
  RESOURCES AGENCY, DEPARTMENT OF THE ARMY, ABERDEEN PROVING 
                        GROUND, MARYLAND

    Mr. Vajda. Good afternoon, Chairman Voinovich and Senator 
Akaka. My name is Mike Vajda, and I am the Director of the 
Department of Army Civilian Human Resources Agency, Army's sole 
Spiral 1.1 organization. I would like to thank both of you, the 
Subcommittee and your staffs, for inviting me to discuss our 
preparations for implementation of NSPS.
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    \1\ The prepared statement of Mr. Vajda appears in the Appendix on 
page 54.
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    And as described in my written testimony, the Army is 
looking forward to using the many flexibilities offered under 
NSPS, to better care for our civilian workforce. Acquiring and 
sustaining a capable and focused workforce in these times 
requires a human resources system that is as contemporary as 
the challenges we now face. Our Spiral 1.1 participants are the 
members of Army's operating civilian human resource community. 
As a sole participant in Spiral 1.1, they will have the 
opportunity to learn NSPS firsthand and use this detailed 
knowledge to assist our commanders, managers, and employees who 
would transition in later spirals.
    The Army believes that effective communication is key to 
successful implementation of NSPS. We have consistently shared 
the NSPS message through an organized chain teaching program, 
orchestrated town-hall meetings, briefings, brochures, fact 
sheets, training bulletins, and dedicated websites. Perhaps our 
most effective communication tool has been our senior leaders, 
who have had the desire and vision to support this critical 
initiative, leaders who embrace change and guide their 
organizations and employees toward successful NSPS 
implementation.
    One of these leaders is right here in Hawaii, Major General 
Stephen Tom, Deputy Commanding General for Mobilization and 
Reserve Affairs, U.S. Army Pacific. Major General Tom was 
appointed by Lieutenant General Brown, Commander of the U.S. 
Army Pacific, to spearhead the transition of the civilian 
workforce to NSPS. Since assuming this role, Major General Tom 
had been actively engaged in communicating the significance and 
value of NSPS to Army leaders and personnel throughout the 
Pacific.
    This effort presented the unique challenge of reaching out 
to many different Army commands and activities, geographically 
disbursed, in Hawaii, Alaska, and Japan. Major General Tom more 
than met the challenge. He has implemented an NSPS information 
campaign that began in August 2005, and continues to reach 
employees, managers, and civilian and military leaders at all 
levels.
    Major General Tom chairs the U.S. Army Pacific Civilian 
Advisory Board, that addresses broad issues that impact the 
civilian workforce. He also serves as a member of Army's NSPS 
General Officer Steering Committee. He has used the employee 
and leadership feedback he has obtained, to inform and 
positively influence NSPS implementation issues in the Pacific 
and throughout the Army.
    I want to show you that the NSPS training delivery is well 
under way in the Army. More than 60 percent of approximately 
2,400 Army's Spiral 1.1 employees have received formal 
training. Twenty employees here at Fort Shafter Personnel 
Advisory Center are in Spiral 1.1. Six of these employees have 
completed the official train-the-trainer sessions at Columbus, 
and will serve as NSPS trainers. The two supervisors of the 20-
person advisory center have also been trained, as have the 
remaining employees at Fort Shafter.
    In summary, we are confident that the Army is well 
positioned to implement NSPS on April 30, both here in Hawaii 
and in our other Spiral 1.1 locations throughout the United 
States. The Army looks forward to the flexibilities that NSPS 
will provide us in our efforts to acquire, develop, and sustain 
a highly skilled and motivated workforce. We truly believe that 
it will enhance our ability to support the warfighter and their 
families, as well as allow us to better serve our Nation.
    I would again like to thank you for providing me the 
opportunity to share Army's NSPS implementation plans with you, 
and I would be happy to take any questions.
    Senator Voinovich. Thank you for that excellent testimony. 
I have to say that I'm very impressed with what all of you have 
said about the preparation that you have made.
    Mr. Vajda, is there any communication between you and other 
people in the Navy, Army, and the Air Force? I noticed you had 
a very robust way of preparing for this. Did you do that on 
your own or did you get some direction from another office, how 
did that work?
    Mr. Vajda. Yes, sir. Each of the components have a project 
manager for NSPS, Army, Navy, and the Air Force. They work 
together and work with the Project Executive Office (PEO). We 
basically have ``soft skills'' training on-line, very similar 
to the Army. In fact, we've trained over 5,000 of Army 
civilians on the on-line training and approximately 4,000 in 
classroom training on change management, setting performance 
objectives, and having effective performance discussions. So we 
do coordinate and work together.
    Senator Voinovich. So the initial information that was sent 
down through the ranks was the same information for all 
branches involved?
    Mr. Vajda. Very consistent, sir.
    Senator Voinovich. I was very concerned about the soft 
skills training because I think it is probably more important 
than going through the training manuals, videotapes, and 
websites--is it all more or less the same information?
    Mr. Vajda. Exactly, sir. And we track all accomplishments. 
Our training efforts are centrally managed at the department 
level, and we track every accomplishment. Our supervisors have 
to be certified in order to work on pay pools, or, actually 
rate employees' performance.
    Senator Voinovich. I have been concerned about training 
since I first took this chairmanship. Senator Akaka may 
remember that I sent a letter out to 12 Federal agencies and 
asked them how much money they were spending on training, 
because training is extremely important, so people know they 
have an opportunity to obtain greater skills and they are 
growing professionally. Of the 12 agencies, 11 said they didn't 
know, and one said they did know, but they wouldn't tell me.
    You have all been asked to do more training than you would 
be ordinarily requested to do. Do you have the necessary 
resources to do the training that you're supposed to do? Did 
you have to pay for this training out of your existing budget? 
What kind of consideration was given to your budgets in order 
to implement this new program? I'd also be interested to learn 
if the trainers of the trainers were employees of the 
Department of Defense, or were they from the private sector? If 
they were from the private sector, did you have to pay them out 
of your budget? Could all three of you please comment on this?
    Ms. Kleintop. I'll start by saying that, to the best of our 
ability, when we realized a year and a half ago, the huge 
investment in training that would be required, we have 
attempted to budget for it through the normal PBB process. 
Obviously, since it's event driven, we may not have it exactly 
right, but so far, so good.
    Senator Voinovich. In other words, because you recognized 
you had this new responsibility, you did allocate resources to 
it?
    Ms. Kleintop. We did, yes, sir.
    Senator Voinovich. Did you get any additional resources 
over and above the year before?
    Ms. Kleintop. I did not, no, sir.
    Senator Voinovich. So you cut back on some of your programs 
and decided to put those resources into NSPS; is that correct?
    Ms. Kleintop. I would say that's a fair assessment for the 
first year and a half, but now that we see the line of sight in 
terms of where we're headed, I think that's one of the 
advantages of going first as a major claimant, which we are, 
because the lessons that we take away, vis-a-vis what does this 
cost, we'll be able to plan for, as we implement for the 
remaining 18,000 employees that work for our Headquarters.
    Senator Voinovich. Do you anticipate asking for additional 
money over and above the budget that you received in the 2007 
budget?
    Ms. Kleintop. Yes, sir. We will have to.
    Senator Voinovich. If NSPS is going to be successful, you 
have got to have the resources that are necessary for you to 
get the job done.
    Ms. Kleintop. Yes, sir.
    Senator Voinovich. Linda Springer is the new OPM director, 
and we have discussed personnel reforms similar to NSPS for the 
entire Federal Government. A key question is whether agencies 
will have the management capacity and resources to do this.
    Ms. Kleintop. Yes, sir.
    Senator Voinovich. So, successful implementation will rely 
in part on the budgets of these agencies, I think that's one of 
the things we have to pay particular attention to, that we 
don't ask you to do a job and then don't give you the resources 
to get it done. Because I've always observed that if you ask 
somebody to do a job and you don't give them the resources to 
do it, basically, you are telling them that you don't think 
very much of what you're asking them to do.
    Ms. Kleintop. That's right.
    Senator Voinovich. So, that's good. Mr. Wataoka, same 
question.
    Mr. Wataoka. Yes, sir. First of all, Senator, all of our 
training course is captured, and we're submitting our reports 
to our comptroller located in Washington, DC. No additional 
supplemental funds were provided to us. However, I see NSPS as 
an investment, and if I can just use one data point, under the 
current general schedule system, there are 400 OPM 
classification standards. Under NSPS, there will be only 15. So 
I can see that there's going to be tremendous amount of savings 
on our part, when we implement NSPS. It will be simpler and 
much more timely and less effort involved by our staff in the 
future.
    Senator Voinovich. Does you agency use category hiring 
instead of the ``Rule in Three?''
    Mr. Wataoka. Category ranking, sir, is that what you're 
talking about?
    Senator Voinovich. Yes.
    Mr. Wataoka. Yes, sir.
    Senator Voinovich. So now you have a larger pool of 
applicants than you can review, and that's going to help save 
time?
    Mr. Wataoka. Absolutely, sir. And we also have numerical 
ratings. We have both, numerical and categorical, yes, sir. So 
we see tremendous savings for us in the future. Now, we are 
human resources, so we will be directly impacted.
    Senator Voinovich. OK. So that's good to hear. Mr. Vajda.
    Mr. Vajda. Sir, in the Army, we've centrally managed the 
training requirement, the technical training requirement for 
NSPS, the training that our employees, our supervisors will 
need to understand and execute their roles in the NSPS 
environment. I personally briefed at the Pentagon the 
requirements--the budgetary requirements to train our 
workforce, both supervisors and managers, current year through 
2009. That budget was recognized as a must-paid bill. Of 
course, a year of execution, and this year, basically, we're in 
an unfinanced requirement, this mode where the Army looks for 
money to pay that bill, but recognizes it as a bill.
    So it's centrally recognized within the Department of Army 
that we must do this, that a certain amount of dollars are 
allocated to do that, and we're hoping to get the--in our palm 
years, 2008 through 2013, it recognized as an additional 
requirement for those years.
    Senator Voinovich. OK. So you have your own budget for the 
Army, and you have yours?
    Ms. Kleintop. For COMPACFLT, right.
    Senator Voinovich. But certainly, the Department itself is 
going to have some real input into this decision making. I'm 
going to talk to Gordon England about this, and he has 
understood this process from the beginning.
    Senator Akaka, we have 10-minute question periods and I've 
used 11 minutes. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I again want to express my gratitude to our witnesses for 
being here and also sharing--and I am smiling as I say this--
your 30, 35, and 40-plus years of service. I look forward to 
hearing your thoughts.
    I want to ask Ms. Kleintop and Mr. Wataoka, as Federal 
employees living in Hawaii, about non-foreign COLA. I 
understand that COLA, which is an allowance, has been given to 
Federal workers living in noncontiguous areas and in U.S. 
Territories since 1949. Under NSPS, pay raises will be based on 
five possible factors, including what is called ``local market 
supplemental adjustment,'' which will take the place of 
locality pay. Obviously, DOD employees in Hawaii are wondering 
how COLA fits into NSPS, and how COLA and local market 
supplements will interface. Moreover, COLA is protected under 
NSPS and cannot be waived by the Secretary.
    Ms. Kleintop, would you please describe what will happen to 
those receiving COLA as they convert to NSPS?
    Ms. Kleintop. Sir, as you said, and it is a fact, the NSPS 
legislation does not affect Title 5 that provides us the non-
foreign COLA If I might, though, comment, as early as the town-
hall meeting, 2004, with Ms. Adams, this was a large concern on 
the part of the local constituents, so much so, that since we 
hosted Ms. Adams, I immediately identified this issue to Mary 
Lacy, and she established that obviously NSPS would not impact 
that entitlement. However, what I further asked her to do, and 
they did promptly, was to make that a matter of record on the 
website that they were setting up, so that all of our 
constituents here would understand, because quite frankly, the 
people at the town-hall really were wishing that NSPS would 
change the existing legislation on COLA to enable us to receive 
the locality pay.
    As we transitioned into NSPS, as you've mentioned for those 
that receive locality pay, that will be part of that conversion 
and taken into consideration. Here we, in fact, will continue 
to receive COLA As far as the local market supplement, though, 
I can't explain precisely how that will proceed, because that 
is something that we're looking forward to, in the future, I 
would expect that the COLA surveys, as we know them, will 
continue, and I would be projecting, but I would think that the 
local market supplement surveys would have to take into 
consideration the fact that we do receive COLA And I will yield 
to Mr. Wataoka in case I've left something out.
    Senator Akaka. Thank you. Mr. Wataoka.
    Mr. Wataoka. Quite a complete answer, Senator. We did host 
Ms. Adams', the Deputy Assistant Secretary of the Navy, visits 
to Hawaii, and it was held in the Pearl Harbor Naval Base, with 
over 200 employees. This question came up from a number of 
participants in the audience. She did go back and she did 
address this answer on the website. It was actually Question 
No. 18, because I received it and disseminate it to our staff 
and our service activities. So, I think that was a complete 
answer by Ms. Kleintop.
    Senator Akaka. Will Hawaii employees be disadvantaged in 
any way if they don't get local market supplement?
    Mr. Wataoka. They would, in the sense of retirement. We 
know that COLA doesn't count toward our retirement, but that's 
subject to a separate lawsuit that's ongoing now, sir.
    Ms. Kleintop. I think, Senator, you've hit on the crux of 
the issue, and that is the disadvantage, if I can call it that. 
That is we receive the COLA and not locality pay. Like some of 
the Kona's locations, locality pay is computed currently into 
your retirement annuity. And, basically, I go back to that was 
the point at the town-hall, that many people were hopeful with 
the NSPS legislation, that legislation could rectify that 
inequity, if you will, and clearly, it does not change that.
    Mr. Wataoka. I'd like to add one more comment on that, 
Senator, if I may.
    Senator Akaka. Yes.
    Mr. Wataoka. I'm not sure that all employees would agree 
that there would be a disadvantage. Only in the sense with 
cost-of-living allowance, there's no taxes paid. So, many of 
the new employees may not want it. I don't know, I didn't ask 
everyone, obviously, but I think if you're looking at long-term 
retirement, then it doesn't count toward your annuity, the 
cost-of-living allowance.
    Senator Akaka. Well, I would really appreciate your 
continuing to work on this, to be sure it's clarified, and 
there's an understanding and even a resolution as to what it's 
going to finally be.
    Mr. Wataoka. Yes, sir.
    Senator Akaka. And I think the workforce would really 
appreciate that.
    Ms. Kleintop. Sir.
    Senator Akaka. So let's continue to work on that.
    Ms. Kleintop, we know that the departments and components 
will fund training for NSPS from existing funds. However, as 
you know, Pearl Harbor Naval Shipyard is mission funded. How is 
the Shipyard paying for the NSPS training programs, and if the 
Shipyard is not receiving additional funds from DOD for NSPS, 
how is Navy balancing NSPS training with other necessary 
employee training programs? Are existing programs being scaled 
back or eliminated to cover the cost of NSPS training?
    Ms. Kleintop. Sir, I would like to take that question, for 
the record. To my knowledge, a formal training has not started 
at the Pearl Harbor Naval Shipyard. However, I believe that 
question would be best answered by NAVSYS Systems Command. 
Because as you stated in your opening remarks, though it is 
mission funded and COMPACFLT Headquarters is the budget-
submitting office for the Pearl Harbor Naval Shipyard, the 
shipyard--excuse me, NAVSYS has taken a one-shipyard approach 
in terms of NSPS implementation. We agreed to that at the 
outset. And so I don't feel that I could give you an adequate, 
precise answer on your question.
    Senator Akaka. Well, let me give Mr. Wataoka a chance, in 
case you want to say anything about that.
    Mr. Wataoka. I really have no comment on that, sir.
    Senator Akaka. Thank you. Mr. Wataoka, you have over 20 
years of experience in the field of labor and employee 
relations, which makes you uniquely qualified to understand 
employee concerns over their rights and protections under NSPS. 
As such, I'm sure you will agree with the Federal Managers 
Association, that training managers and employees on employee 
rights will help ease concerns and create an environment 
focused on an agency's mission. Would you describe for us the 
training that employees are receiving on their rights and 
protections under NSPS, and how those rights under NSPS differ 
from a current law?
    Mr. Wataoka. We had several O.M. meetings where we 
discussed the proposed regulations. However, at the end, when I 
did address to my staff personally the adverse actions, the 
appeals, and the laborer relations portions, even though we do 
not have a bargaining unit, so I went over those provisions 
with them, but, of course, now because of the court decision, 
these programs are enjoined, and so we've stopped our training 
in these areas. There are provisions, however, for employees to 
contest certain actions on the current other systems regarding 
the appeal, the performance ratings, for example, so there are 
built-in protections for employees.
    Senator Akaka. Ms. Kleintop, DOD's training manual, HR 
Elements for Spiral 1.1 states that veterans' preference 
principles will be protected under NSPS. To me, the term 
``principles'' is a departure from the clear statutory 
preference for veterans in hiring and protections during a 
reduction in force. Does the use of the term ``principles'' 
imply a change in veterans' preference rights under NSPS from 
current law?
    Ms. Kleintop. Sir, not as far as I'm advised. Obviously I 
was not the author of that particular manual, so I would have 
to yield on the use of ``principles'' versus the ``law.'' But, 
basically, what we've instructed is that veterans' preference 
will not be interrupted.
    Senator Akaka. Mr. Wataoka or Mr. Vajda, would either of 
you want to make a comment on that?
    Mr. Vajda. Sir, as far as I understand, the current rules 
regarding veterans' preference is maintained in NSPS, and it 
will continue without being impacted adversely. And I would 
just like to say that as far as the Army goes, our veterans are 
a great recruitment resource for us, and we value them as a 
component of the civilian workforce.
    Senator Akaka. Mr. Wataoka.
    Mr. Wataoka. We would administer reduction in force for our 
service activities. There are four factors that would be 
considered, and in order, they would be tenure, veterans' 
preference, performance rating, and credible service. That's 
how it is under the current system, with the exception that 
credible service and performance ratings are flip-flop; that 
is, today, credible service overrides the performance rating. 
That will be changed under NSPS. But veterans' preference would 
remain the same under both systems, the current and NSPS.
    Senator Akaka. We need to clarify this, so that people will 
feel that they understand what is meant by veterans' preference 
``principles,'' and I thank you for that.
    Senator Voinovich. Thank you, Senator.
    In terms of the veterans' preference, we held a very good 
hearing in Washington that was requested by Senator Akaka, and 
we heard from some of the organizations who weren't happy. 
Senator Akaka and I are going to send a letter to the 
Department of Defense and the Office of Personnel Management to 
get additional information. We are very committed to this 
particularly with our men and women coming back from 
Afghanistan and Iraq, it's really important.
    I never did get an answer because I didn't give you a 
chance to respond. Who was doing the training?
    Ms. Kleintop. If I might go first, we are doing it with in-
house trainers, with one or two exceptions, and what I would 
offer to you, sir, based on our current experience, the way 
that NSPS is set up and the way that we're implementing it, 
based on our Commander's intent and Admiral Roughead's 
objectives, there is such goodness to using in-house people, if 
you can.
    Now, I realize at COMPACFLT, we're implementing 470 people. 
There are larger organizations that may not be able to humanly 
do that with their in-house talent, but the feedback and we 
have it from our flag officers, SESRs attending the training, 
is that they really like the goodness of the in-house trainers 
who know the command, know the people, encourage the openness, 
and basically have been with us for the last year and a half, 
getting ready, and that's real-time feedback to you, because 
this is going on, as we speak.
    Senator Voinovich. That's great. When we did our Quality 
Service Through Partnership training, which was Total Quality 
Management, Xerox Corporation was the one that really helped 
us. But eventually all of our trainers were Ohio government 
employees. When I left the governor's office, we had 3,500 
continuous improvement teams, and we had 2,500 facilitators. 
These are all people that had taken time away from their 
regular jobs to participate, and it really, I think, is the 
best way to get the job done.
    The people in the Pentagon that are overseeing this program 
in Washington, DC, do you believe they've got the resources to 
oversee this? In other words, the P----
    Ms. Kleintop. PEO.
    Senator Voinovich. Yes. Do you feel comfortable that 
they've got their act together and have the resources to get 
the job done?
    Mr. Vajda. Sir, from my perspective, they've done a very 
good job. Army, and I believe Navy and Air Force, all have 
representatives that work with the Project Executive Office, 
and we work very closely with them. We all have project 
managers, and we work as a team, basically. I've met with the 
OIPT and seen how Mr. Dominguez and that group, very carefully 
and exactingly, considers what they do and how we do it with 
NSPS.
    Senator Voinovich. So you feel very comfortable?
    Mr. Vajda. I do feel comfortable, sir.
    Senator Voinovich. Are they engaged and concerned?
    Mr. Vajda. They are engaged.
    Senator Voinovich. That's good.
    On the issue of the soft skills training, is that done in 
the classroom with people, or by a videotape or over the 
Internet?
    Mr. Wataoka. It's both, sir. We do have web-based training 
on a lot of it, and others are face-to-face interaction in 
classrooms.
    Mr. Vajda. Sir, we do both in the Army as well. We have 
classroom training that we offer at every installation, and we 
have web-based training, a wide variety of web-based courses 
that employees can take at their leisure.
    Senator Voinovich. Congress authorized 2 years ago that the 
Senior Executive Service would have a pay-for-performance 
system. Have all of the SES people in your respective offices 
gone through the pay-for-performance training and entered this 
system? How is it working?
    Ms. Kleintop. I can speak to that. We have four SESers at 
COMPACFLT, and, in fact, yes, we have been through one 
evolution on pay-for-performance. And actually, I think some of 
the things that were done for NSPS are helping to inform 
backwards how we can improve the transparency on that effort, 
but----
    Senator Voinovich. That's great. I don't think there was 
this level of preparation for the Senior Executive Service. I 
don't think it was done. Are you saying that maybe that it 
didn't work out as well as you would like it to?
    Ms. Kleintop. I have no personal complaints, but I have 
heard people say that perhaps the transparency of the process 
was not as ideal as we feel it is right now for our people, but 
that's all part of transformation. And to answer your question, 
yes, in fact, one of our four will probably be the pay pool 
manager for COMPACFLT, and that's because of his experience 
working at the senior Navy level on the pay pool process back 
there, so we're trying to use his experience to do it at our 
headquarters.
    Senator Voinovich. Mr. Wataoka.
    Mr. Wataoka. I was going to make a comment about that. What 
I thought was interesting was the Deputy Assistant Secretary of 
the Navy, Patricia Adams, shared her performance objectives 
with all of us. My understanding is that performance management 
for the SES group has been successful. I've heard very 
favorable comments.
    Senator Voinovich. They feel good about it, overall?
    Mr. Wataoka. I can't answer that. I don't know.
    Senator Voinovich. You say it's been successful, but you're 
not sure?
    Mr. Wataoka. The people that I've talked to are happy that 
they've launched this. My boss is at least showing that they 
are leading the way, they're the senior executives, and she's 
willing to share her standards with us. I think that's making a 
statement, sir.
    Senator Voinovich. I'll be interested to hear from the 
representative of the managers on that one.
    Do you have any comment on this, Mr. Vajda?
    Mr. Vajda. I would just echo what Ms. Kleintop said, sir, 
and I do know that the OIPT, Secretary England and his group 
really did take a hard look at what happened with senior 
executive performance appraisal process and the lessons they 
learned there, and tried to apply that to NSPS.
    Senator Voinovich. Thank you. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Having the three of you here today provides me with the 
opportunity to ask the question I've asked of DOD officials 
before, which is, what are the plans for converting Wage-Grade 
employees to NSPS? Has anything been developed for a potential 
conversion, and has there been any discussion on the 
application of the Monroney Amendment to Wage-Grade employee 
pay under NSPS? Ms. Kleintop?
    Ms. Kleintop. The details, as I know them, have not been 
developed at the DOD or Department of Navy level, but COMPACFLT 
obviously employs, throughout our areas of responsibility, many 
wage grade employees, two of the shipyards, and so, obviously, 
at my level, our line of sight and vision is that we will 
convert, we will implement NSPS for our wage grade employees. 
The original schedule, however, given the Spirals, was not to 
have that happen until Spiral 2.0. So, as to the further 
development and crystallizing all of that for the wage grade, I 
would have to take that for the record, in terms of the new 
schedule and the exact details that have been fleshed out.
    Senator Akaka. Mr. Wataoka, do you you have anything to 
add?
    Mr. Wataoka. Nothing significant, sir. I did attend a DOD 
meeting in which this issue was addressed, but I think as Ms. 
Kleintop said, it's in Spiral 2.0, which is sometime in 
calendar year 2007, so I haven't heard very much more about it, 
sir.
    Senator Akaka. Mr. Vajda.
    Mr. Vajda. Senator, I don't think I could add much 
specifics aside from the fact that I do believe that the 
principles and theories underlying NSPS would be equally 
applicable to our blue collar employees as they are to our 
white collar employees, and I know the intent is for this 
system to cover our wage grade employees as well.
    Senator Akaka. I have many other questions, Mr. Chairman, 
but I'll submit them for the record. However, if I may ask this 
one, Ms. Kleintop, our Subcommittee was told last November by 
Secretary England that 85 percent of NSPS training will be 
conducted on a face-to-face basis in the classroom. Is this the 
case, and have you evaluated which training, classroom or on-
line, is more effective?
    Ms. Kleintop. All of the training that we have accomplished 
to date in the last year and a half, we have evaluated. There 
are built-in pre- and post-evaluations that are done. And what 
I stated in my testimony is that we have used a blended 
approach, because, quite frankly, we do have employees that do 
enjoy going to the website and taking advantage of those 
courses. But I would say in the main, our soft skill training, 
which was coaching for high performance, was all done in 
person, and obviously the training that we're conducting at 
this moment is all in person, and to his credit, Admiral 
Roughead has directed that all of this training will be 
required for all employees, managers, and supervisors, and so 
even though we are not directed that way, from DOD or Navy, he 
believes that it is that critical, that is basically what our 
metric is, as we speak.
    Senator Akaka. The question also comes because you 
testified that those without computers were given brochures for 
information on NSPS. I am interested in on-line training 
programs. What alternatives are in place to provide on-line 
training programs to individuals without a computer, and how 
many employees does this affect?
    Ms. Kleintop. Sir, I apologize if I misled you. I can 
assure you, all 170 employees at COMPACFLT Headquarters have 
not just one, but two computers, basically unclassified and 
classified. What I should have said more clearly is that this 
blended approach is allowing our employees to go to the 
websites on their own time to take advantage of some of the 
courses that are there, on the soft skill side, but in no way 
did that replace the formal classroom training that we are 
doing, and I apologize if I misled you on that.
    Senator Akaka. Thank you so much for your response. Thank 
you, Mr. Chairman.
    Senator Voinovich. Thank you very much for your testimony 
today. I must say that you have made me feel more confident 
about this system because of all the work that you've done in 
preparing for it. I think that you understand, as 
implementation continues, the level of effort needed to be 
successful, as well as the need for continuous training.
    Mr. Vajda, how long have you worked for the Federal 
Government?
    Mr. Vajda. Thirty-two years.
    Senator Voinovich. OK. I want to thank you all for 
continuing to serve your country at a very critical time. Your 
years of experience are important to the operations of the 
government.
    Mr. Vajda. Thank you, sir.
    Senator Voinovich. Will the second panel of witnesses come 
up, please.
    Before our witnesses sit down, I'll administer the oath.
    Do you swear the testimony you are about to give this 
Subcommittee is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Thank you. Please have the record note that all witnesses 
have answered in the affirmative.
    We're very fortunate today to have representatives from 
three organizations. We have John Priolo, the past President of 
Chapter 19 of the Federal Managers Association. Mr. Priolo, 
Senator Akaka reminded me, has testified before us previously.
    Benjamin Toyama is the International Vice President, 
Western Federal Area of the International Federation of 
Professional and Technical Engineers, AFL-CIO. Don Bongo is the 
Vice President of the Hawaii Federal Employees Metal Trades 
Council, AFL-CIO.
    Thank you very much for being here today to share your 
thoughts, we welcome them.
    Mr. Priolo, we'll start with you.

TESTIMONY OF JOHN C. PRIOLO,\1\ RETIRED PRESIDENT, CHAPTER 19, 
   PEARL HARBOR NAVAL SHIPYARD, FEDERAL MANAGERS ASSOCIATION

    Mr. Priolo. Thank you. Chairman Voinovich and Senator 
Akaka, it's good to see you both again, and thank you for 
inviting me to be here today to talk about the roll-out of NSPS 
and its impact on managers and employees. You already have my 
detailed written testimony, and I'll just hit some of the high 
points.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Priolo appears in the Appendix on 
page 60.
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    I'm a Retired President of FMA's Chapter 19 at Pearl 
Harbor. I was also a past Zone 7 President, responsible for 
chapters in Hawaii and portions of the West Coast. I spent 
almost 40 years in Federal civil service, most of which was in 
the nuclear engineering department at Pearl Harbor Naval 
Shipyard. And I'm here to testify today on behalf of the DOD 
managers, supervisors, and employees throughout the Department.
    FMA was established in 1913. It's the largest and oldest of 
managers and supervisors associations. It originally was 
organized within the Department of Defense, and since, it's 
branched out to include 35 different Federal departments and 
agencies. So what happens at DOD is going to affect all our 
people and we're vitally interested in being a part of it. 
We're a nonprofit advocacy organization and our job is to 
promote excellence in government.
    I'm very pleased to be sitting next to my good friends, Ben 
Toyama and Donald Bongo. When I was actively working at Pearl 
Harbor, we worked very hard with our unions to build strong 
relationships, and they are superb voices on behalf of their 
membership, and, frankly, without their help and guidance, and 
of course the support of our Congressional delegation, Pearl 
Harbor would not have an apprentice program.
    The development of a new personnel system at DOD is a 
historic step in the history of civil service. Because of the 
critical mission and the sheer size of the DOD, success is 
vital.
    As those who will be responsible for the implementation of 
the Department's proposed personnel system and subjected to its 
changes, managers and supervisors are pivotal to ensure the 
success. We believe this hearing is most important as we sit on 
the precipice of the first wave of employees being enrolled in 
the new system at the end of this month.
    We support the message of the system to institute 
flexibility, accountability, and results. We also recognize 
that change does not happen overnight. Managers, supervisors, 
and employees throughout DOD await a system that many question 
whether it will actually come to fruition. Their skepticism is 
rooted in a lack of adequate communication that clearly 
indicates the expectations and time frame for training and 
employing enrollees in the new system.
    Despite such concerns, men and women of the defense 
workforce are committed to meet any challenge head-on, and we 
are still optimistic that the new personnel system may bring 
together the mission and goals of the Department with its on-
the-ground functions.
    One of the greatest challenges we see is that managers and 
supervisors are clueless when it comes to the new system. The 
communication coming down from agency leadership on time frames 
and expectations isn't nearly enough to find managers, 
supervisors, and employees prepared for their role in the new 
system.
    Voluntary Internet-based soft skill training has been 
offered, but little accountability or time has been made 
available for managers to prioritize that training. Spiral 1.1 
is expected to be implemented at the end of this month, and 
training programs have only recently begun for those members.
    We encourage that NSPS scale back the overall 
implementation, but information people are receiving on the 
ground remains too elusive. We've extended our publications, 
our conferences, and, in fact, our local chapter meetings as 
mechanisms to educate employees, but these only capture a small 
percent of the supervisory workforce even among our membership. 
We are thankful that many of our members have taken advantage 
of these opportunities, and we are pleased with the information 
coming out of the Program Executive Office. But we believe more 
needs to be done throughout the chain of communication, from 
the secretary on down, to keep managers, supervisors, and 
employees engaged in a roll-out assessment and analysis of the 
system.
    Concern also remains about funding the pay-for-performance 
system. We reiterate that without proper pay, it's impossible 
for a manager to adequately compensate an employee for their 
performance. Most of our members will be enrolled in Spiral 
1.3. We hope that as the system moves forward, we will see 
greater efforts on behalf of the Department to engage and 
educate the managers and supervisors on their expectations. 
They are up to the challenge. They just need to be aware of 
when and where they need to step up to the plate.
    I'll just add, I know some of the trainers that the 
shipyard will use. They're good people, experienced trainers 
and know the culture of the organization that they're going to 
train. And I'm cautiously optimistic that the support will be 
there, but I do guarantee you that if the support is not there, 
Mr. Chairman and Senator Akaka, you will hear from us.
    Thank you again for allowing us to be here, and I'd be 
happy to answer any questions that you may have.
    Senator Voinovich. OK, you are saying most of your people 
will be in Spiral 1.3. When does that begin?
    Mr. Priolo. Does somebody have a time limit for that? I 
think the date keeps moving. That's why I don't have an answer.
    Senator Voinovich. OK. The question I have is, how many 
people in your organization are in the 1.1 Spiral?
    Mr. Priolo. Very minimal. These would be headquarters-level 
people and we don't normally represent any of those kind of 
people, so, absolute minimal.
    Senator Voinovich. All right. Thank you. Mr. Toyama.

    TESTIMONY OF BENJAMIN T. TOYAMA,\1\ INTERNATIONAL VICE 
 PRESIDENT, WESTERN FEDERAL AREA, INTERNATIONAL FEDERATION OF 
  PROFESSIONAL AND TECHNICAL ENGINEERS, AFL-CIO CLC, AND VICE 
   PRESIDENT OF IFPTE LOCAL 121, PEARL HARBOR NAVAL SHIPYARD

    Mr. Toyama. Thank you. I would like to extend a special 
note of appreciation to you, Chairman Voinovich, for your 
foresight in holding today's hearing in Hawaii. I know I speak 
for all the workers here at Pearl Harbor Naval Shipyard, and I 
extend to you a warm aloha and welcome.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Toyama appears in the Appendix on 
page 79.
---------------------------------------------------------------------------
    I want to also extend a very heartfelt note of appreciation 
and aloha to Senator Akaka. Senator Akaka's outstanding efforts 
in Congress over many years, including his most recent efforts 
to bring fairness and equity to the NSPS, is not only important 
to the workers here in Hawaii, but to all DOD workers 
worldwide. Senator Akaka, mahalo and thank you for giving me 
this opportunity to testify.
    I will deviate a little from my written remarks, to address 
a subject of today's hearing, ``Preparing for Transition: 
Implementation of the National Security Personnel System.'' 
This leads me to ask the following question: How does DOD and 
OPM plan on implementing a system that has largely been ruled 
as illegal by a Federal court and has absolutely no buy-in from 
the very workforce it will impact?
    The employees that we represent and the supervisors that 
work with our members all hear our frustration, the union's 
frustration with the DOD, and their refusal to honestly 
consider the proposals put forth by the United DOD Workers 
Coalition. The implementation of the NSPS will be very 
difficult and painful because of the failure of DOD to at least 
try to get any buy-in from the State COLAs, the employees.
    It appears that DOD believed that they could fast-track the 
NSPS and go through motions of meeting and considering the 
comments of the unions and force a failed system on the 
employees. This scheme, this trick, did not work because the 
courts have ruled the actions of DOD illegal, and the 
capricious nature of the implementation of NSPS has gone to a 
halt or at least significantly slowed down. This failure of DOD 
to honestly address the concerns of the Federal employees, and 
the arbitrary and capricious rules that they tried to use to 
implement the NSPS breeds mistrust and contempt of the NSPS by 
all of the employees affected by the NSPS. Without trust, the 
NSPS will fail to produce any gains, and, in fact, produce 
terrible results for DOD. The unintended consequences of NSPS 
will make it less productive in the workplace, because it will 
destroy teamwork and will cultivate a cultural silence. This 
would adversely affect safety and productivity.
    Morale, productivity, and efficiencies will suffer because 
of lack of trust and training under the pay-for-performance 
rules of NSPS, when ensured. And the pay-for-performances of 
the managers will not be able to properly implement a fair 
system.
    Senator Voinovich, you spoke of TQM and your efforts as a 
mayor, I applaud you for that. The unions have been always 
interested in Dr. Demmings, and TQM, and TQL. I have been 
involved in that since 1985. Currently in the Pearl Harbor 
Naval Shipyard, we're spearheading the union, is spearheading 
the team of employees to train and teach productive 
improvement, according to Steve Covey's ``8th Habit,'' how to 
find our voices and inspire others to find their voices, from 
effectiveness to greatness. And we are pushing this and we're 
talking about teamwork. Pearl Harbor Naval Shipyard has a 
tiger-team concept that is the best in the country. We change 
batteries, the best in the country. We've done work on the USS 
San Francisco after it hit an undersea mountain, and we worked 
that as a tiger team.
    We believe that the NSPS and the pay-for-performance system 
will destroy the concept of teamwork, because we compete 
against each other for the pool of funding and we compete 
against each other for the performance rating. The bean 
counters and the ratchet counters will be forcing the employees 
to stop working as a team and start to work as an individual to 
increase the opportunities for promotions and things like that.
    We have a nuclear safety program in the Navy that places a 
premium on safety and quality. NSPS places a premium on 
performance, which is measured by cost and schedule. The NSPS 
will cause employees to make hard decisions to report a quality 
or safety defect or take a chance and not report the defects, 
because the requiring of a defect could adversely affect the 
employee's performance. This will sure lead to a culture of 
silence that the NASA auditors found in NASA. We are very 
concerned about that cultural safety and the safety problems 
when that happens. We lost a Hawaii astronaut, Ellison Onizuka, 
in the Challenger space shuttle disaster, and we think that 
pay-for-performance will drive some safety problems in the 
nuclear program.
    NSPS is a bad policy intended to promote a DOD strategy 
that would take away employee rights at the workplace. NSPS 
will render moot current laws regarding EEOC and 
discrimination, the Whistleblower Protection Act. It will 
render moot veterans' rights regardless of what they have told 
you, and the other employee appeal systems.
    The reason I say that, is because the penalty of reporting 
a manager or your own supervisor for fraud waste abuse, 
discrimination, sexual abuse, or any other wrongdoings will 
impact that employee's paycheck and his career, unless he hits 
a home run and proves that manager is wrong. We have seen EEO 
complaints go on for 5 to 7 years with adverse conditions to 
the complainant. We have seen whistleblower protection on 
problems when someone proposes to report fraud, waste, and 
abuse in the current system. And unless everyone finds 
religion, we will have a very difficult time separating 
reprisal from the pay pool and pay-for-performance, and that's 
how we feel about this.
    Regarding the veterans' rights, they have not changed the 
rules regarding the veterans' rights, but what they had done is 
changed the area of consideration. So veterans have no right 
now to bump and retreat, as they did in the past, the positions 
that they qualified for. The bumping and retrieving rights for 
veterans will be gone, and that rights greatly diminish the 
rights that all veterans enjoy under the current law.
    We think, we believe, had DOD worked with the union and the 
United Defense Workers Coalition and properly taken our input 
and our proposals, we could have made a difference and we could 
have, in fact, looked at the pay-for-performance system and 
NSPS system, that would probably work better, but without the 
trust, I would suppose that your experience with your own 
employees, as mayor, taught you that without the trust of the 
employees, everything goes slower, everything is difficult. We 
have had no contact or discussion with regards to all of the 
plans that DOD wants to implement in NSPS.
    Thank you for giving me this time to testify.
    Senator Voinovich. Mr. Bongo.

   TESTIMONY OF DON BONGO,\1\ VICE PRESIDENT, HAWAII FEDERAL 
EMPLOYEES METAL TRADES COUNCIL, AFL-CIO CLC, AND SERGEANT FIRST 
   CLASS, E-7, HAWAII NATIONAL GUARD, 227TH ENGINEER COMPANY 
                     (COMBAT), 29TH BRIGADE

    Mr. Bongo. Senator Voinovich, thank you for coming all the 
way down to Hawaii to listen to our testimonies. To my dear 
Senator Akaka, thank you for serving the great people of 
Hawaii, with your warmth and aloha, with true spirit, and I 
thank you.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Bongo appears in the Appendix on 
page 86.
---------------------------------------------------------------------------
    I have made a statement of my testimony and I would like to 
give it as evidence to you guys, but, basically, what I want to 
do is enhance this and say a thing that's been on my heart. 
I've been involved in the coalition of unions in Washington not 
only with Ben Toyama, but President Ron Alt, in what we call 
the meet-and-ignore sessions that we had up there to discuss 
the system that would ensure security of our Nation. I've 
attended most of those meetings prior to me being mobilized 
with 29th Brigade Combat Team, August 16, in the year 2004.
    Yes, I am a Federal worker for Pearl Harbor Naval Shipyard, 
going on 25 years, but I'm also a proud citizen soldier for the 
State of Hawaii and for this great Nation. And what I would 
like to say, my dear Senators, is that it wasn't too long ago 
that State of Hawaii, while we were a State at that time, that 
we were attacked. And as I recall President Roosevelt saying at 
that time, ``a date which will live in infamy,'' we will not 
forget for the many thousands of lives that our sailors had 
given that day, and yet vowed that it would never happen again 
to this great country.
    Sad to say a few years ago, we were attacked again, and 
many innocent men and women, the World Trade Center, Pentagon 
and the fields of Pennsylvania, lost their lives, and their 
families were greatly impacted, and till today they still mourn 
their loss. I say that to remind us because it wasn't too long 
after that, that we started to meet and confer on a system that 
was supposed to be protecting or keeping our America safe, a 
system that would ensure that it would not happen again.
    But at that time, hundreds of thousands of American women, 
men and women in our Armed Forces volunteered to fight, to get 
involved and fight the bad guys out there. Hundreds of 
thousands of men and women decided that they wanted to get 
involved as civil servants, like myself, in that fight. I was 
based out in LSA, Anaconda, right outside of Balah, where we 
were mortared just about every day by 6-round Charlie. I had 
the pleasure to help fortify the base, to keep it safe for the 
American soldiers within that compound. I got involved with the 
election process by helping the poling station, keeping them 
safe by putting up barriers. I worked with the Iraqi army and I 
worked with the Iraqi police.
    During that time, there were many situations on a daily 
basis while I was outside the wild, me and my soldiers were 
encountered by the children of Iraq, and all they wanted was 
water and food. And I can recall one day sitting back in our 
hooch, sitting down with our men, after a mission, and one of 
my young soldiers, about 22 years old, came up to me and said, 
Sarge, do you see the children over there? Do you see them, the 
same clothes from the first day we came, at 137 degrees, same 
clothes. All they want is water and food.
    And another soldier told me, Sarge, how can a government 
treat their people like that? With the amount of monies that 
they have.
    And I say this because I want to remind everyone here that 
the men and women in our Armed Forces volunteered to help fight 
this cause, that the men and women in the Department of Defense 
as civil servants want to help the men and women in the Armed 
Forces to accomplish that mission. We cannot take away their 
rights. A lot of them were veterans that fought.
    Myself and Brother Tommy Miguel, are veterans of the 
Vietnam era, and sometimes we say we kind of feel guilty coming 
home when we know men like Staff Sergeant Wilgene Lieto and 
Specialist Derence Jack, from Saipan, of the 100 Battalion 
442nd Infantry, that pulled security for me and my men to help 
the people of Iraq through the election process. On a sad day 
in October, they were killed in IED.
    Senator Voinovich. Mr. Bongo.
    Mr. Bongo. Yes.
    Senator Voinovich. You have exceeded your time, and if you 
could wrap it up, please.
    Mr. Bongo. All I'd like to say, sir, is that what we need 
to do with this system is remember why the people are getting 
involved in the Department of Defense, both civilians and 
military. Thank you.
    Senator Voinovich. Thank you. I'd like to make a couple of 
comments. First of all, Mr. Toyama, I'm very excited to hear 
about your tiger teams. We have DFAS in Cleveland and they had 
a real problem with processing claims, they put a tiger team 
together and it reduced the processing time significantly 
because they went to the employees and said, ``How do you feel 
you can get the job done better?'' I'd be interested if you'd 
send me some information about what you have accomplished, I'm 
very interested in that.
    Second of all, it puzzles me that you don't have 
information about the program. However, the program will be 
implemented first for the white collar workforce and then for 
the blue collar workforce. Mr. Priolo, you noted that just a 
few of the people you represent have gone into the system.
    I believe that the Department of Defense will continue to 
do the same kind of outreach that they've done with the Spiral 
1.1, that they're going to do the same thing with the next 
spirals, and they may even do more, because of the concerns 
that Mr. Toyama has raised.
    Another issue is that part of this system is being 
contested in court. The unions argue that wages is something 
that should be bargained, and the labor-management rules are in 
court, and we may not know the decision for some time. The 
courts decision may impact the unions. So I just want to 
mention that.
    Were you impressed with what you heard here from the first 
panel about the training and everything that they did?
    Mr. Toyama. I heard Mr. Wataoka and Ms. Kleintop, I've 
known them for most of their lives. I've got 40 years in the 
shipyard. Also, I've worked with them. I taught Jeff everything 
he knows. Let me say this: We represent the people and we're 
the voice of the membership. And it is very disturbing to us 
that we have Spiral 1.1, senior executive members, and non-
union members be the representative of choice for our 
membership and my union to determine how good and how well a 
program runs. I don't think it's fair to me, I don't think it's 
fair to my membership, that the representative of choice that 
DOD selected was all non-union people and managers to determine 
how well this is, how well liked it is, and how well received 
by the population and then put this on us.
    Senator Voinovich. The Department of Defense has delayed 
implementation of NSPS multiple times. They could have 
implemented it much sooner. Senator Akaka, myself, and other 
Members of Congress, insisted that implementation not be 
rushed. Now, is that the process that you're talking about, or 
is it a process that was subsequent to that?
    Mr. Toyama. That's the process I was talking about. It was 
not vetted properly.
    Senator Voinovich. So you feel that it was not vetted 
properly because the people that they selected to represent the 
wage workers were not union representatives?
    Mr. Toyama. No. What I'm saying is, the United Defense DOD 
Worker Coalition was all union representatives, and I was part 
of that. But none of our proposals, none of our concerns, and 
none of our counterproposals to management's proposal on the 
table was even applied and/or considered. They listened to us 
and they ignored us.
    Then I said to you that we have heard testimony that Spiral 
1.1 has been taught and trained, and everyone likes it, and 
it's wonderful and everyone is excited about Spiral 1.1. But 
what it does, it sets the parameters and it sets the action for 
Spirals 1.3 and 2.0, and all the rest of the Spirals that 
follow Spiral 1.1. And they are the representative voice in 
terms of correcting or, in fact, making sure that the NSPS is 
proper.
    In that representative voice that will drive and, in fact, 
steer all of NSPS, there's not a single union member or 
representative. It's all managers and senior managers. To do 
Spiral 1.1, they're going to convince Congress, me, my 
grandmother and everyone else how wonderful it is, but there is 
not a single employee voice in that crowd.
    Senator Voinovich. Now this was before the lawsuit was 
filed?
    Mr. Toyama. Yes. But I think the spirals was already 
planned that way. They were going to go before the lawsuit was 
filed, Spiral 1.1.
    Senator Voinovich. So prior to the lawsuit being filed, the 
development of NSPS did not involve union representation?
    Mr. Toyama. Correct, it did not.
    Senator Voinovich. OK. I genuinely believe that it's in the 
best interest of everyone that we go forward with NSPS. I was 
impressed with your testimony about your TQM teams because you 
do want to have camaraderie. As a matter of fact, in the State 
of Ohio, we used to award individuals if they came up with a 
new idea that would save money for the State. But when we 
adopted Total Quality Management, we reevaluated that, so that 
the teams ended up getting the money. And there isn't any 
reason why, as we move through the implementation of NSPS to 
make some accommodations--it's not cast in stone.
    Regardless of the outcome of the lawsuit, I would encourage 
you to make suggestions to the Defense Department on changes 
they could make to NSPS to give you more confidence in the 
system. I would be interested in knowing your ideas too.
    At the hearing we had on veterans' preference we learned 
something from the people that represent veterans, and we're 
going to take action as a result. So I just want to say to you 
that NSPS is not cast in concrete, and there are changes that 
can be made to the system that will better accommodate some of 
your concerns.
    I would also mention that I asked if managers were 
evaluated on enforcing veterans' preference. The answer was no. 
I was a proponent of affirmative action, and a lot of people 
that worked for me weren't really supportive of affirmative 
action. I made supporting affirmative action a criteria of 
their performance evaluation. My staff knew that was very 
important to me, as a mayor of Cleveland and the governor of 
Ohio.
    I think that if this system is implemented right that it 
could make things better for your members. I know you feel that 
NSPS is bad, but I'm saying to you that you need to continue 
the dialogue and provide your input to the folks in Washington.
    Mr. Toyama. Yes. Let me tell you about the union's passion 
and drive with regards to productive improvement and Steve 
Covey's ``8th Habit.'' In the BRAC hearings, they compared 
Pearl Harbor to Portsmouth Naval Shipyard, and Portsmouth Naval 
Shipyard was deemed the goal standard of labor relations and 
productivity. We, in Pearl Harbor, the workers in Pearl Harbor 
took personal umbrage to that, and we are working hard to show 
them the platinum standard. We will rise above their standard, 
and we will compete and we will be good. We understand that and 
we'll do that, maybe in spite of NSPS, I understand that.
    Federal employees are volunteers, like Mr. Bongo said, we 
volunteered to keep fit to fight, we volunteer to make sure our 
military are well prepared to fight any war that we need to 
fight, and we're volunteers. I'm just saying that it sets us 
back from all of those things we are attempting to do now, 
because there's not transparencies, there is not clear 
communication, and I think the stakeholders are cut out of the 
planning session of this NSPS.
    Senator Voinovich. Thank you. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
recognize this panel of friends who have been active in trying 
to make sure employees understand NSPS and have provided great 
ideas and suggestions to improve NSPS. I want to thank all 
three of you for your tireless efforts on behalf of the DOD 
workforce, and I want you to know that your work has not gone 
unnoticed.
    Mr. Bongo, I thank you for your service to our country, as 
both the combat veteran and a career Federal employee. You 
testified that NSPS will significantly diminish veterans' 
preference, especially in the event of a reduction in force. 
How would you strengthen veterans' preference under NSPS?
    Mr. Bongo. Senator, basically, I'd like to strengthen the 
veterans' preferences by keeping it equal, to remember why 
these men and women were veterans. They served our country, 
they deserve their right to be treated equal, especially in the 
rift during a reduction in force, to continue to serve as a 
civil servant without any prejudice.
    Senator Akaka. Mr. Toyama, do you have anything to add to 
that?
    Mr. Toyama. I would think that the veterans' preference 
should remain the same as they have it now. The problem with 
the NSPS is they have taken, say, shop of welders, of 150 
welders, they now have the ability to narrow the area of 
consideration in the reduction in force to a work area that 
would encompass maybe 25 of the 150 welders. Now, if a veteran 
was promoted to become a special nuclear welder, for instance, 
and they need to cut back on nuclear welders, he had no right 
to return to his regular welding job, which would be a grade 
level below him, if that work area was not affected. He had no 
right to bump and/or retreat to any job that he qualified to, 
because they have agreed and NSPS allows management to narrow 
very limited areas in term of reduction in force.
    It used to be where throughout the activity, a veteran had 
the right to retreat or bump throughout the activity any 
position that he came from and/or was qualified for, and that 
right or that privilege is gone. In our discussion with Mr. 
Nesterczuk in the meet-and-confer process, we asked him about 
that, and he's----
    Senator Voinovich. Mr. who?
    Mr. Toyama. George Nesterczuk, OPM.
    Senator Voinovich. Thank you.
    Mr. Toyama. We discussed this. And I'm a Vietnam vet, and I 
told him that if I'm a vet, and I was in fact impacted, and Don 
Bongo was ready to deploy, like Don Bongo goes and deploys and 
come back, and he is affected, because he's a special welder, 
why wouldn't we accommodate him? And the answer to us was, we 
don't want to disturb or inconvenience 3,000 employees in Pearl 
Harbor Naval Shipyard for a vet that maybe is being affected in 
a rift.
    And I told him, ``Look, you inconvenienced me for a year. I 
dodged bullets out in Vietnam for a year. You put me in mud 
paddies for a year. You get Don Bongo in Iraq Desert for a 
year, you inconvenienced him and his family, and you don't want 
to inconvenience the people that stayed in home?
    He said, well, that is the reason they narrowed, very 
narrow scope of where a veteran can retreat and bump to. The 
trick is, they did not change the veterans laws, but they 
changed all the employment laws around the veterans laws.
    Same as the Whitman amendment. A person can come in and get 
promoted and pay raises ten times a year. Every time he's 
temporary, assigned to a job at a higher pay rate, he can 
accumulate that higher pay rate or move to a higher pay band 
and accumulate that, and if he is reassigned multiple times 
during the course of the year, his pay raise will go up 
multiple times through the course of the year.
    Now, the Whitman amendment was put in, in 1952, to avoid 
that. The rules currently says you spend a year in the grade 
level, the pay level, at the grade below the level that you'd 
be promoted to. But you had a year wait, then you move to the 
next step. Not anymore. They can do ten steps in a year. And 
that opens the door for a lot of unfairness, and we sit here 
and we say, look, if there is complete trust, maybe with the 
amount of trust we have now, that's a bitter pill to swallow, 
that they will do the right thing at the right time, for right 
reasons at this time. And it's a tough sell for us.
    Senator Akaka. Thank you, Mr. Toyama.
    Mr. Priolo, I understand that several members of your 
chapter just returned from the train-the-trainer events. Can 
you share with us whether those who attended feel better 
prepared to train other employees, and have they discussed with 
you whether they would like additional training?
    Mr. Priolo. Discussions were limited, but the training that 
they have indicated has been very effective. And additional 
training will be needed to continue through the process, 
because it can't be one shot. It's got to be a continuous 
improvement. And as I said, I'm optimistic, as long as the 
support, which means funding and train-the-trainer training 
continues, and as long as, by far, almost all training is done 
in a classroom atmosphere as opposed to some on-line training.
    In my opinion, one of the most difficult jobs for any civil 
servant is a first-line supervisor in a shipyard. He or she is 
expected to be on the deck plates for many long hours. They 
come in early, they work through lunch and they stay late, and 
they're not always compensated for it, and to expect them to 
then find a computer and do on-line training, well, it's not 
going to happen. But if you use classroom training as the major 
vehicle, with the excellent trainers that we have in place, 
then that supervisor's job for the day is to go to training.
    In fact, if I could be king of this program for a day, I'd 
make sure that any training of Pearl Harbor supervisors 
occurred off base. Maybe we'd send them to the Hickam theatre 
or the submarine base, so they're not going to be constantly 
bombarded with cell phone calls and pagers going off, so that 
they could absorb the excellent training that's provided.
    And that's what my complaint is about--I've taken on-line 
training before, and it can supplement, but it can never, ever 
replace classroom training.
    Senator Akaka. Thank you very much, Mr. Priolo, for that.
    Mr. Chairman, my time has expired, and I have questions 
that I'd like to submit for the record.
    Senator Voinovich. OK. Senator Akaka, if you have a couple 
more questions that you'd like to ask, that would be fine, and 
then you could also submit questions for the record.
    All I can say in conclusion, I'd like to continue to hear 
from you.
    Mr. Toyama. I will send you all of our program data to show 
what we have done on productive improvement, and I am so proud 
of that program, I'll tell you this: We took a 400-manhour job, 
we had three people work on it for 9 hours. Three meetings. 
Monday, Wednesday, and Friday, we implemented, we completed 
that job. Now in Pearl Harbor, it become an 8-hour job. From 
400 manhours to 8 hours. This is the creativity and the ability 
of the worker out there, if we ask them and empower them, and 
this is what we have done, but it takes teamwork, it takes lot 
of risk management, and sometimes it affects productivity and 
performance.
    Senator Voinovich. Every year we held an event called 
``Team-up Ohio,'' and we would bring the quality management and 
improvement teams to Columbus, we would take over the whole 
convention center. Every team had a booth and they would 
describe what they did and how they did it. It was one of the 
best days I had, seeing the pride of the people that worked for 
the State, learning about their ideas and how they were making 
a difference. People started to really feel good about what 
they were doing, and they were participating. This is just a 
suggestion, maybe you ought to do it here and celebrate what 
you've done and let people know about it.
    Mr. Toyama. We plan to do that on July 20, do a 
presentation, at Old Dominion College, and we will come to 
Washington. If you have 2\1/2\ hours you can schedule, we'll 
give you a presentation of what we have. We have put together a 
traveling show. And the important aspect of this whole deal is 
this. We, the old guy in the shipyard, I got 40 years there, 
picked up these people, this team that's 34 years old and 
younger, 25- to 34-year-old, and they are driving this team and 
they are doing the presentations. They have done the work, to 
save the money on the jobs.
    These youngsters come in and says, ``Boy, you old-timers, 
why are you doing it the hard way?'' And they have provided us 
this kind of performance improvements, and that is our team. 
The youngsters, we have some of them in the crowd here.
    Melissa? Wave your hand, Melissa. She's the leader of the 
team, and we have a couple other people here, all these 
youngsters, and we are trying to drive that. We are afraid that 
our efforts could be forestalled if there is not a clear 
understanding of what we intend to do and what the impact of 
NSPS will be to these workers.
    Senator Voinovich. I have a few more questions. If you were 
in our position, we're the Subcommittee on Oversight of 
Government Management and the Federal Workforce, would you 
suggest that we consider quality management as something that 
would be promoted government-wide, as something that would 
really make a difference for our Federal workers?
    The other question I have, and, Senator Akaka, maybe you 
have thought about this, but it seems odd to me that the only 
time that Federal agencies practice quality management is when 
work is competed and employees establish Most Efficient 
Organizations. So you're saying to your workers that you can 
compete and try to be more efficient or else your jobs will be 
contracted out. The interesting thing is that Federal employees 
win over 85 percent of the competitions.
    Mr. Toyama. Yes.
    Senator Voinovich. I wonder why does it take the threat of 
competition to give the people who want to do the best they 
can, the flexibility to create their own Most Efficient 
Organization. In effect, that's what you did with quality 
management, right?
    Mr. Toyama. Yes.
    Senator Voinovich. You put your best team together. We need 
to examine that.
    Mr. Toyama. I think in response to your first question, I 
think, yes, quality management expectation from the national 
level is well worth the effort, and I think it will drive 
productivity, and you're correct, what happened in Pearl Harbor 
Naval Shipyard, they're going to farm the total shipyard out. 
We're going to be on the BRAC list. It opened everybody's minds 
and eyes up, to understand that we're not bulletproof because 
we work in Pearl Harbor Naval Shipyard. We're not bulletproof 
and we need to add to the national effort of improving our 
efforts here in Pearl Harbor, and we've done that, and I will 
send you the presentation and I'll tell you this, we will make 
this happen with or without management's help, because our 
vision is we can ensure the future, our mission is to ensure a 
future for the Pearl Harbor workers, and this is the youngsters 
that put this together, and our values is always good. We will 
always do good for the shipyard and the Navy.
    Senator Voinovich. Thank you. Senator Akaka.
    Senator Akaka. Thank you, Mr. Chairman. I want to tell our 
panel that I cannot adequately say how proud I am of you and 
the way you've shared the spirit of Hawaii here today. I thank 
you for sharing your wisdom gained from all the years you've 
served at Pearl Harbor Naval Shipyard, and your experience with 
us today. I look upon this as helping us try to determine what 
is best for our country, and I thank you so much for your 
assistance. So, mahalo, thank you so much for your testimonies.
    Mr. Toyama. Senator, one more issue. I forgot to answer one 
of Senator Voinovich's question, What can we do?. The 
coalition, the United DOD Workers Coalition have proposed this, 
and I think it's a workable plan, and I think it will help NSPS 
with the blue collar workers and throughout, is to look at the 
issue of national bargaining. They don't want to bargain with 
us, and they want to do collaboration, thus we have this whole 
program that no one trusts.
    I think they talked about bargaining, that it should go to 
national bargaining maybe, and have the smart guys in 
Washington kind of hammer it out, so we, the trenches, if you 
get some buy-in and some perspective of what our leaders in 
Washington have proposed and accepted, and what the leaders of 
DOD in Washington have proposed and expected, opt to work for 
us, I think national bargaining may help. I cannot speak for 
the coalition entirely. I tell you from the trenches, from the 
bottom looking up, we need buy-in from the top coming down.
    Senator Voinovich. Is the coalition----
    Mr. Toyama. United Coalition, Department of Defense. United 
Department of Defense--Worker Coalition. My age catch up with 
me once in a while.
    Senator Voinovich. So does mine.
    Mr. Toyama. But, I would think that our national leaders 
will be well equipped to vet this out quickly, at the national 
level, and the transparency and the trust and the buy-in at 
this level would go incredibly faster.
    Senator Voinovich. Thank you. Senator Akaka, thank you very 
much for encouraging me to do this. I just want to tell you, we 
have differences of opinion on a couple things, but I'm really 
glad you're in a leadership role, and that you are in the 
Senate. I look forward to continuing to work with you on the 
Subcommittee.
    Mr. Toyama. I represent the West Coast of the IFPTE, and I 
represent NASA, Glenn, Local 28 of IFPTE.
    Senator Voinovich. Oh, do you?
    Mr. Toyama. And Virginia Cadwell always reminds me that 
you're a good guy.
    Senator Voinovich. Thank you.
    Senator Akaka. Well, let me add my mahalo nui loa to the 
Chairman for taking this time to come out here to Hawaii, and 
to Janet, his wife, and for holding this hearing out here. I'm 
really grateful. This will not only help Hawaii, but it will 
help our country. Thank you.
    Senator Voinovich. Great. Thanks. The hearing is adjourned.
    [Whereupon, at 4:09 p.m. P.S.T., the Subcommittee was 
adjourned.]
                            A P P E N D I X

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