[Senate Hearing 113-708]
[From the U.S. Government Publishing Office]
S. Hrg. 113-708
NOMINATION OF EARL L. GAY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
NOMINATION OF EARL L. GAY TO BE DEPUTY
DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT
__________
NOVEMBER 18, 2014
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota
Gabrielle A. Batkin, Staff Director
John P. Kilvington, Deputy Staff Director
Deirdre G. Armstrong, Professional Staff Member
Ashley E. Poling, Counsel, Subcommittee on the Efficiency and
Effectiveness of Federal Programs and the Federal Workforce
Keith B. Ashdown, Minority Staff Director
Christopher J. Barkley, Minority Deputy Staff Director
Andrew C. Dockham, Minority Chief Counsel
Sally Anne Braeuer, Minority Counsel
Darien B. Flowers, Minority Research Assistant, Subcommittee on the
Efficiency and Effectiveness of Federal Programs and the Federal
Workforce
Laura W. Kilbride, Chief Clerk
Lauren M. Corcoran, Hearing Clerk
C O N T E N T S
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Opening statements:
Page
Senator Tester............................................... 1
Senator Portman.............................................. 4
Senator Ayotte............................................... 8
WITNESSES
Tuesday, November 18, 2014
Rear Admiral Earl L. Gay, USN (Ret.), to be Deputy Director,
Office of Personnel Management
Testimony.................................................... 2
Prepared statement........................................... 17
Biographical and financial information....................... 19
Letter from the Office of Government Ethics.................. 35
Responses to pre-hearing questions........................... 37
Responses to post-hearing questions.......................... 55
Hon. John Lewis, A Representative in Congress from the State of
Georgia 11
NOMINATION OF EARL L. GAY
TUESDAY, NOVEMBER 18, 2014
U.S. Senate,
Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m., in
room SD-342, Dirksen Senate Office Building, Hon. Jon Tester,
presiding.
Present: Senators Tester, Portman, and Ayotte.
OPENING STATEMENT OF SENATOR TESTER
Senator Tester. I call this Committee on Homeland Security
to order. Good afternoon. We are going to convene this
afternoon's hearing to consider the nomination of Rear Admiral
Earl Gay to serve as Deputy Director of the Office of Personnel
Management (OPM).
Rear Admiral Gay, thank you for seeking this position and
thanks for being here today. We appreciate your service to this
country.
Admiral Gay. Thank you, sir.
Senator Tester. It should be noted that Rear Admiral Gay
has filed responses to his biographical and financial
questionnaire. He has answered prehearing questions submitted
by the Committee, and his financial statements have been
reviewed by the Office of Government Ethics. Without objection,
this information will be made part of the hearing record, with
the exception of the financial data, which are on file and
available for public inspection in the Committee's offices.
Rear Admiral Gay currently serves as Senior Adviser to
Director Katherine Archuleta at the Office of Personnel
Management. He has been in this position since early this fall.
A graduate of the U.S. Naval Academy, Rear Admiral Gay has a
distinguished career of service in the United States Navy
serving as a naval aviator from 1980 to 2013. With a master's
degree in human resources management, Rear Admiral Gay's
experience will definitely be an asset as he seeks the No. 2
position in the Federal agency tasked with managing the Federal
workforce.
As we heard from witnesses at the hearing of our
Subcommittee on the Efficiency and Effectiveness of Federal
Programs and the Federal Workforce in May, there are a growing
number of significant challenges to our efforts to recruit and
retain experienced and skilled Federal employees. These folks
are too frequently used by politicians as their punching bag
when the budget season rolls around. Their integrity is often
questioned. The retirement benefits are targeted, and pay and
hiring freezes are often instituted.
At the same time, these same folks, these politicians, also
demand an efficient and effective Federal Government. You would
never know it by the way they view and often treat the Federal
workforce.
Rear Admiral Gay, I would actually like to see us invest a
little more time and resources into initiatives that allow
agencies to better recruit, cultivate, and retain a quality and
experienced Federal workforce. And I am not just talking about
Federal employees in Washington. I am also talking about
Federal employees on the ground in hard-to-recruit areas, for
instance, in the Bakken in Glendive Montana.
Whether you are talking about an engineer at the Bureau of
Land Management or a doctor at the Department of Veterans
Affairs, there is a job that needs to be done, and oftentimes
these agencies need greater flexibility to incentivize
recruitment and retention packages for the folks that they
really need to do the job.
Today we will also touch upon work done by OPM in carrying
out 90 percent of the background investigations for the Federal
Government. Along with Ranking Member Portman, Senators
McCaskill, Johnson, and others, we have been putting forth a
number of ideas to reform the process.
In terms of the security clearance process, I look forward
to hearing some of your thoughts on where we are and where we
need to go in that vein.
When Senator Portman gets here, we will certainly give him
time for his opening statement, but since he is not, I will
turn the floor over to you, Rear Admiral Gay, for your opening
statement.
TESTIMONY OF REAR ADMIRAL EARL L. GAY, USN (RET.),\1\ TO BE
DEPUTY DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT
Admiral Gay. Thank you, Chairman Tester, Ranking Member
Portman, and Members of the Committee for the opportunity to
appear before you today. It is indeed an honor for me to be
considered as the nominee to be Deputy Director of the Office
of Personnel Management, and I want to thank President Obama
for nominating me to this important position and Director
Archuleta for her support.
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\1\ The prepared statement of Rear Admiral Gay appears in the
Appendix on page 17.
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I especially want to thank and recognize my wife of 32
years, Ardella, who joins me here today and is a retired, 26-
year civilian Federal employee; and our two daughters, Faythe,
who is a former naval officer, and Carmen, a pharmacist,
collectively known as ``Earl's Girls.'' The fact that I am here
today is because of their unwavering love and support.
Growing up in Atlanta, Georgia, my parents instilled in me
the importance of education and a sense of civic duty. I chose
to embrace a life of service to my country by applying to the
U.S. Naval Academy. It was there that I learned the essence of
leadership--defining your vision, articulating expectations,
and overseeing progress through transparency and
accountability. These guiding principles have served me well
throughout my career and made me the leader I am today. If
confirmed, I will continue to follow these principles as I work
to ensure that OPM is successful in its efforts to recruit,
retain, and honor a world-class workforce for the American
people.
Throughout my 33 years in the Navy, I have had the honor to
serve my country in various roles. I have deployed overseas,
commanded a naval strike group, served as the Commandant of the
Naval District Washington, and managed congressional affairs.
These opportunities have afforded me the privilege of working
with countless dedicated, patriotic public servants--both
military and civilian alike. I am excited about the opportunity
to continue to lead and learn from the most committed and
capable individuals our government has to offer.
If confirmed, I will use my skills in strategic planning
and team building to assist Director Archuleta in leading and
management of the agency. Under her leadership, OPM has
improved our processing of new retirement claims, and we are
now completing over 82 percent of cases in 60 days or less. The
agency has also made great progress to strengthen our quality
oversight controls within our background investigations
program, and we continue to provide high-quality investigations
for 95 percent of government. I am excited about the
opportunity to play a significant role in advancing Director
Archuleta's vision and the agency's strategic plan.
Given my military and national security background,
Director Archuleta has asked that I focus a significant amount
of my time on Federal Investigative Services (FIS), working
with the program office leadership and our Administration
partners to implement the reforms directed in the President's
120 Day Suitability and Security Review. I have also been asked
to take the lead in working with our agency partners on efforts
to recruit more veterans into our Federal Government. If
confirmed, I look forward to working with Director Archuleta on
her initiatives related to strengthening our recruitment
efforts of women veterans. We must all ensure that we continue
to honor the service of our military men and women, especially
those returning from conflicts in Iraq and Afghanistan.
Public service is a noble profession, and we must do all we
can to recruit, retain, and honor a world-class workforce and
strengthen and improve the services offered by OPM, from resume
to retirement and beyond.
Serving as Commander of U.S. Navy Recruiting Command prior
to my own retirement, I was able to share my love of country
and dedication to public service with young men and women and
encourage them to join our ranks. I witnessed over 97,000
patriotic Americans stand like I did so long ago and dare to
take an oath and serve their country. I could not have picked a
more fitting end to my Navy career, and I believe serving as
the Deputy Director of OPM is a natural progression for me to
continue to inspire Americans to join the Federal Government
and serve their country.
I thank you again for allowing me to appear before you
today, and at this time, I would be pleased to answer any
questions the Committee may have.
Senator Tester. Before we get to the questions--and thank
you for your testimony, Rear Admiral Gay--I am going to offer
Senator Portman the opportunity for an opening statement.
OPENING STATEMENT OF SENATOR PORTMAN
Senator Portman. Thank you, Mr. Chairman, and thank you for
having this hearing. And, Admiral Gay, congratulations on your
nomination.
Admiral Gay. Thank you, sir.
Senator Portman. I hope my friend John Lewis shows up here
in a minute to add his accolades to your service to our
country. Thank you for your willingness to step up for this new
job.
We need you. OPM has got a lot of responsibilities right
now. In fact, they are increasing, as the Chairman and I have
learned through being on our Subcommittee, and there has not
been a Deputy Director, I am told, for 3 years. So it is
critical that the President nominated someone, and I am glad he
has nominated someone who has the experience and the background
to be able to be of immediate value to the leadership team at
that agency.
At its core, I think that your job is to recruit, train,
and retain this 21st Century Federal workforce, and, again, as
the Chairman and I have found out, we have some challenges. A
lot of people are retiring. We have a lot of needs,
particularly on the technology front, cyber front, that we need
to fill.
Health care is a big responsibility, of the Office of
Personnel Management. It is both the Affordable Care Act and
implementing that, but also existing responsibilities for
Federal employees, and so you are going to be charged with a
lot, tackling some big management challenges.
On the cybersecurity front, we need better skills to be
able to confront the serious threats we have right now to our
Federal information technology (IT) systems. I am sure you are
well aware of that in your work on the Navy side, but this is a
really difficult challenge. Agencies have, we have determined,
significant challenges in determining the size and composition
of their cybersecurity workforce. We think the way the work is
defined needs some work. We need to address that, and we think
OPM can play a leading role in that.
There is bipartisan legislation I have introduced with Mike
Bennet called ``The Cybersecurity Workforce Assessment Act''
that we would love to get your input on. And then more
generally we have to give the Federal Government the right
tools to recruit the best and the brightest and, again, to
retain those people.
The Chairman has been working on that. The Federal agencies
need the ability to share their qualified candidate lists so
that potential hires do not fall through the cracks and I was
glad to join the Chairman on his bill, which is called ``The
Competitive Service Act,'' to address that very issue. I hope
the full Committee will pass that legislation soon, and, again,
we would love your input on that legislation. We think it could
help your new role.
So we look forward to getting into some questions with you,
and, again, thank you for your willingness to step up to serve
your country in a little different capacity but an equally
important one.
Admiral Gay. Yes, sir.
Senator Tester. Well, thank you, Senator Portman.
Our Committee rules require that all witnesses at
nomination hearings give their testimony under oath, so I would
ask you, Rear Admiral Gay, to please stand and raise your right
hand and attest in the affirmative at the end. Do you swear
that the testimony you are about to give the Committee will be
the truth, the whole truth, and nothing but the truth, so help
you, God?
Admiral Gay. I do.
Senator Tester. Let the record reflect that the witness
answered in the affirmative. You may be seated.
There are a number of questions that are stock general
Committee questions, that are asked to every nominee, standard
three questions.
The first one is: Are you aware of anything in your
background that might present a conflict of interest with the
duties of the office to which you have been nominated?
Admiral Gay. No, sir.
Senator Tester. Do you know of any reason, personal or
otherwise, that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated?
Admiral Gay. No, sir.
Senator Tester. Do you know of any reason, personal or
otherwise, that would in any way prevent you from serving the
full term of office to which you have been nominated?
Admiral Gay. No, sir.
Senator Tester. Thank you very much.
I am going to turn the questions over to Senator Portman
while I get my throat cleared out, so, Senator Portman, if you
would take over.
Senator Portman. Thank you, Senator Tester. And I am going
to start on something that actually Senator Tester and I have
spent a lot of time on, both in hearings and also through some
specific legislation, and that is these background
investigation problems that we have had.
The problem that we have identified is that some of the
background investigations have not been done properly, that
there is a backlog, and if anything, I think we are more
concerned than ever because the Federal Investigative Service
has just removed this contractor, United States Investigations
Services (USIS), from their contract. And this has to be
placing enormous demands on the remaining contractors. The
other two contractors combined were only doing about 25 percent
of the background investigations. So, our concern is heightened
even further. If you could answer these questions to the best
of your ability, we would appreciate it.
One, do you know how big the current backlog is that was
created when the USIS contract was ended?
Admiral Gay. Not the precise number, no, sir, but I can
provide that.
Senator Portman. Are you aware that there is a significant
backlog?
Admiral Gay. Yes, sir, I am.
Senator Portman. Do you think it is best to manage this
transition, both the timeliness of these reports but also the
quality of these reports, by bringing on additional
contractors? Or would you stay with the contractors who are
there?
Admiral Gay. I know for a fact that we have brought on an
additional contractor, NT Concepts. Back to the question of
quality and timeliness, quality is first and foremost our major
priority, our No. 1 priority.
Senator Portman. On the investigations, do you know if
there has been consideration to seek a memorandum of
understanding with other agencies that already have background
investigation firms on contract to be able to expedite that
process?
Admiral Gay. Not specifically, but I know that we are
considering other alternatives so that we are not stuck with
one major contractor or two. So we plan on looking at market
research to make solicitations to diversify our contractor
pool.
Senator Portman. Just in general, do you have anything to
add to this in terms of the Federal Investigative Service and
how we are going to go about having more timely and higher
quality reviews?
Admiral Gay. Well, right now, sir, I would ask for a little
patience because, as I stated before, the quality and integrity
of the background investigations remains the No. 1 priority,
and the two companies that took on the USIS absence have
increased their capacity, and we are in close coordination with
them weekly. I know that we receive weekly updates as they
continue to increase their capacity.
Senator Portman. This is going to be a big challenge for
you. We look forward to working with you on it, and we hope you
will take a look again at some of the work we have done, some
of the hearings we have had.
With regard to cybersecurity, I mentioned in my opening
statement that this is another issue we have spent a lot of
time on. These threats continue to grow, and they are not just
growing in terms of the quantity but also the quality of the
attacks, and, therefore, we need a highly skilled cybersecurity
workforce to be able to deal with them.
One of the things that I have been concerned about in
particular--that we do not know what the current capability is
of the Federal Government. We have tried to figure out, what
skills we have in the current workforce. There was a 2011 U.S.
Government Accountability Office (GAO) report that found that
agencies are facing significant challenges in this because the
size and composition of the cybersecurity workforce is like
comparing apples to oranges. There is not a common lexicon on
how do you define the work. There are not common job codes. And
so agencies are struggling to even know what they have and then
certainly what they need in terms of personnel.
So we are looking for some help here, maybe a uniform
classification for job functions, specific employment codes, so
that agencies can map out the Federal Government's workforce to
identify what the skill shortages are and where they might be
able to help other agencies if they have a surplus.
The full Committee recently passed an amendment to help
with this, and, again, I am working on this proposal with
Senator Bennet and others called ``The Federal Cybersecurity
Workforce Assessment Act.''
From your perspective, what are some of the challenges the
government faces in terms of cyber workforce needs?
Admiral Gay. Well, as you stated, sir, the cybersecurity
area is one of the skill gaps that we must close, and that has
been identified. What I plan on doing is to personally engage
the Chief Human Capital Officers (CHCO) Council--the CHCOs of
each agency--to ensure that they are invoking the correct
applications to seek out those with those critical skills. And
so from my military background, I am very well aware of and
appreciate the importance of cybersecurity. Out in the fleet,
it is absolutely vital that we preserve it because to lose it
could cause damage or it could be a matter of life or death. So
I take it very seriously.
So I am looking forward to getting engaged with those
efforts, sir.
Senator Portman. OK. My time has expired, so I want to turn
it back to the Chairman, but I do think this is an area where
having a new Deputy will be really important, and we want to
work with you on this to try to find out what we need and then
close that gap as quickly as possible.
Thank you, Mr. Chairman.
Senator Tester. Thank you, Senator Portman, and once again,
it is good to have you here today, Admiral Gay, and a special
welcome to your wife. Thank you for coming to this hearing.
I guess the first question would be: Why do you want this
job?
Admiral Gay. Well, sir, I have worn the cloth of our Nation
since 17, and I retired last December. I am used to being on a
team, and I like to work with people that are driven. I just
think that this is a natural progression for me to continue to
serve my country.
Senator Tester. So as I referred to in my opening
statement, the morale of the Federal workforce it is low. It
may be as low as it has ever been. And the question is: There
are some issues that revolve around it when you have low
morale. Recruiting becomes a problem; retention becomes a
problem. And these jobs are important.
You have spent a career in the Navy. Do you have any ideas
on what we could do to improve morale or what we could do to
better recruit and better retain employees?
Admiral Gay. Well, yes, sir, I do. Again, based on my
experience--I will tackle recruiting first and then retention.
In recruiting, I personally have used the USAJOBS website
before, and it has vastly improved from the last couple of
years. But I think we can get better. I think we at OPM can
help the agencies better craft their announcements. Also, in
the area of strategic recruitment to find out where the IT
specialists are and so on and so forth.
We had the same issues in my previous job. One of the
critical occupations was nuclear power, and so we had to go out
and seek those pools to see where the talent was at. I think
that is one area that I am looking forward to engaging in from
my past experience.
As far as retention goes, I think we need to increase
employee engagement, empower the employees to make sure that
they feel empowered to be a part of the team, and that
involves, in my mind, increasing efforts in developing their
careers and training, by offering them training opportunities
to succeed in the individual agencies.
Senator Tester. OK. Veteran employment is about 30 percent
of the civilian workforce, and it has been rising over the last
few years. A lot of credit can be attributed to the
Administration's Veterans Employment Initiative, which has the
goal of enhancing recruitment and retention and promoting
employment opportunities for veterans.
Can you provide an update on that initiative?
Admiral Gay. Yes, sir. As I stated before, that is one of
the areas that I am closely, intimately involved with, and we
have increased our veterans' new hiring. From 2009 to 2013, it
rose from 24 percent to 31 percent. We still have to get
better. There are a lot of initiatives out there, and we are
currently working with the agencies. We have an Interagency
Veterans Employment Initiative Council that meets monthly. One
of my assignments is to become co-chair of the working group to
advance their efforts.
Senator Tester. OK. So would it be fair to say you think we
are heading in the right direction?
Admiral Gay. Yes, sir. I think the needles are moving in
the right direction. That said, through, Director Archuleta in
her various travels around the country, we also have noted that
there will also be a 57-percent increase in women veterans
coming into the workforce.
Senator Tester. Yes, correct.
Admiral Gay. So we are leaning forward in our efforts. We
meet with the women veterans organizations to ensure that all
veterans have equal opportunity to come and join our workforce.
Senator Tester. OK. So in the hiring process of veterans,
do you see any major challenges that still need to be
addressed?
Admiral Gay. In my opinion, as a new veteran, I plan on
ensuring that the veterans better translate their military
skills to civilian skills. We are also involved with helping
them with hiring and interview training as well.
Senator Tester. OK. Senator Ayotte.
OPENING STATEMENT OF SENATOR AYOTTE
Senator Ayotte. Thank you, Mr. Chairman.
I want to thank you, Admiral Gay, and your wife for your
willingness to serve and your prior service to the country.
I wanted to followup on what Senator Tester just asked and
your last answer. As I understand it, the area that we can also
all work on together is that our veterans have incredible skill
sets and how do we translate the understanding of those skill
sets to a civilian sector position. So some of the things that
are being done by our military, whether it is out in places
like Afghanistan or even home side, making sure that the
civilian sector understands what type of leadership skills that
means, what kind of skills and training they got for that, so
any thoughts you have on how we can work on that together I
think is really important.
Admiral Gay. Yes, ma'am. Right now I think the main impetus
is to ensure that the agencies know the skill sets that these
veterans bring to the table. As you mentioned, there are a lot.
Senator Ayotte. Right.
Admiral Gay. Including leadership. Some attempt to quantify
leadership, because it is a multiplier. It really is.
Senator Ayotte. Well, thank you. I appreciate that. I think
that is really important given what our veterans can bring from
their experiences to our civilian workforce, to the Federal
workforce.
I wanted to follow-up on the issue of security clearances,
and I know Senator Portman had asked you in particular about
the backlog that we have, addressing that backlog of security
clearances. And what I wanted to followup on is another
question related to the security clearance question, and that
is the insider threat. So whether we saw a situation like
Edward Snowden or Aaron Alexis, both who happened to work with
the Federal Government but in a contract capacity, and as the
background clearance system works right now, if you have a Top
Secret clearance, you are reviewed every 5 years; Secret is
about 10 years; and then Confidential is about 15 years.
One of the things I have introduced with a number of my
colleagues on this Committee and outside the Committee has been
to introduce the idea of random audits in that process, because
right now it is much more a self-reporting-oriented process.
But as you know, a lot of things can change in people's lives,
even over the course of a 5-year period, and never mind what
can change over the course of a 15-year period.
What are your thoughts on how we can work to better--not
only address this backlog, which is critical, but also to
address the issue of insider threats? I wanted to get your
thoughts on the idea of random audits and any other thoughts
you have on how we can do better in this regard.
Admiral Gay. Yes, ma'am. The Suitability and Security
Clearance Performance Accountability Council (PAC) has come out
with 13 recommendations, and the areas that you just spoke of
were covered in resolving those issues, including continuous
evaluation. And so the Director of National Intelligence (DNI),
OPM, the Office of Management and Budget (OMB), and other
agency partners are authoring recommendations to improve that.
Continuous evaluation is very important, having held a security
clearance myself. And also decreasing the periodicity of the
secret checks to 5 years, I personally feel that is an
important move. So I am quite certain that I will spend a bulk
of my time implementing those recommendations, ma'am.
Senator Ayotte. Great. I appreciate that very much.
And, finally, I just wanted to ask you, Senator Warner from
Virginia and I recently co-authored a book chapter together,
and the book is actually called ``Moneyball for Government.''
It is about how to make government smaller and smarter by using
actually performance data to evaluate how well programs are
doing and measuring programs. It is a really simple concept
about how we need to measure what works and what does not work
in order to know what policies to implement and what
investments to make, especially as we look at a constrained
environment.
So the GAO released a report in September that reported
that a lot of agencies are not using this kind of data to make
decisions, but OPM is actually one of the two agencies that has
improved its use of performance data. How will you in your role
as Deputy Director make sure that OPM is doing all that it can
to assure that it continues to use this performance data and
really becomes a role model for other agencies on this?
Admiral Gay. Yes, ma'am. As you stated, OPM is intimately
involved with that. We consider ourselves the thought leader
for data-driven metrics. So I plan on personally engaging the
agency leadership--although Director Archuleta has been very
forward in dealing with Cabinet members, I see myself as
connecting personally with the other agency leadership to
ensure that they have all the tools that they need. There are a
lot of tools out there that are available, and so my job is to
find out, one, if they know about them and, two, why aren't
they using them.
Senator Ayotte. Great. Well, thank you very much. I
appreciate it.
Admiral Gay. Yes, ma'am.
Senator Ayotte. Thank you.
Senator Tester. Senator Portman.
Senator Portman. Thank you, Chairman Tester.
I was going to talk a little about health care. I mentioned
in the opening that it is one of your big responsibilities at
OPM, and particularly in this new role, you are going to be
asked to weigh in on a lot of these issues. You administer, as
you know, the largest employer-sponsored health care plan in
the United States of America, the Federal Employees Health
Benefits (FEHB)--and its $45 billion in annual costs, and 8
million individuals. Healthcare is obviously a very complicated
issue, but specifically this plan puts OPM right in the middle
of one of the tough issues to manage these days, costs and
quality.
One question for you is: Can you give us a sense of your
background in this? You go into this job with, again, a great
military background, but do you have any background in managing
health care programs, in particular managing change or reform
efforts within health care?
Admiral Gay. Well, as far as health care is concerned,
throughout my career I have been responsible for Sailors and
Marines, but not only them but their families as well. And so I
am well versed in it.
As far as the meticulous management of health care plans, I
have not been involved with that, but I have been involved with
oversight and management of budgets and also strategic plans
and campaigns. So I think those rich experiences will bode me
well as I delve into this new area.
Senator Portman. Admiral, I do not know if you have seen
the President's proposal for the Federal Employees Health
Benefit Plan, but he has basically said he would like to enable
you at OPM to be able to contract out beyond those insurance
companies that are currently in the FEHB. The Congressional
Budget Office (CBO) has given us two very different scores in
the President's last two budgets. The first budget they said it
is actually going to cost a lot of money, and the second one
they actually said that it is likely to have a savings of about
$300 million. And we have been asking CBO to give us a detailed
explanation of that. They really cannot.
So let me ask you this: Are you aware of that? And how do
you feel about it? Do you think that is a good idea to permit
OPM to contract with new types of health plans that do not
currently participate in the Federal Employees Health Benefit
Plan?
Admiral Gay. Yes, sir, I have not read the CBO report--I
will read it--but I agree with the proposal.
Senator Portman. Great. I think it sounds interesting, and
I think it might give us some opportunities to allow employees
some different kinds of plans than are currently there.
I see that John Lewis has arrived. I described you earlier
as ``my friend John Lewis,'' and it is rare that you actually
get a visa to come over to this side of the Capitol, so this is
a big deal. But welcome, and I will allow the Chairman to give
you a proper introduction.
Senator Tester. Well, I do not know if it will be proper or
not, Ranking Member Portman, but I would just say welcome to
John Lewis. Welcome to the side where only good and proper
things happen in Congress. It is great to have you over here
advocating for Rear Admiral Gay. The floor is yours.
OPENING STATEMENT OF THE HONORABLE JOHN LEWIS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF GEORGIA
Mr. Lewis. Well, thank you very much, Mr. Chairman. Thank
you, my friend. We have been knowing each other for a long
time, and I am glad that you extended me a visa to come over. I
am delighted to be here to introduce--and I know he does not
need an introduction--Rear Admiral Earl Gay, who was a neighbor
of mine. I no longer live in the same neighborhood, but we
lived in the same neighborhood for many years, and your parents
still live in the neighborhood. And I am honored and delighted
to be here to say a few words about this young man, the
Presidential nominee for Deputy Director at the Office of
Personnel Management.
I apologize for being late. On the House side, we are
organizing our committees and trying to go to work.
I frequently run into my neighbor in the airport when he is
heading home to visit his proud parents. This young man is very
active and very involved. I see him just moving all the time.
He is a proud native of the Venetian Hills neighborhood
where I lived for more than 36 years in the same house. And I
decided to be closer to the airport, a lovely neighborhood but
I wanted to not drive so much on those highways and roads and
streets in Atlanta and decided to move.
He graduated from the Naval Academy in 1980 and completed
flight training at the Pensacola Naval Air Station the
following year. Throughout his career he continued to further
his education. In addition to earning a master's degree in
financial management from Troy State University, the
university--you probably did not attend the site, but it was
only 10 miles from where I grew up. When I was 17 years old, I
wanted to attend Troy State, but I was denied admission because
they did not admit African American students. And to be here
today to introduce you as a graduate of Troy University says
something about the distance we have come and the progress we
have made in laying down the burden of race. So it is a great
honor to be here. You also attended the Joint Forces Staff
College and the business school at the University of North
Carolina.
Admiral Gay's Navy career took him from Atlanta across the
country and around the world, deployed twice to support combat
action in the Middle East, and his unit colleagues were
repeatedly recognized with the Battle Efficiency ``E'' Award.
His leadership and experience on the homefront is just as
impressive. Rear Admiral Gay was the Navy's congressional
liaison officer in the U.S. House of Representatives, after
which he was appointed as the 86th Commander of the Naval
District Washington and Deputy Commander of the National
Capital Region Joint Force Headquarters.
Rear Admiral Gay then moved across the country to San
Diego, California, where he commanded the Expeditionary Strike
Group 3 before serving as Commander of the Navy Recruiting
Command until 2013.
Following his retirement from an esteemed Navy career,
Rear Admiral Gay returned to Washington, DC, to advise the
OPM Director, and after three decades, he still wants to
contribute more to our great Nation.
Again, I thank you, Mr. Chairman and Senator Portman, for
hearing me and allowing me to come here to say just a word and
to introduce Rear Admiral Gay, a neighbor and a son of Atlanta,
a son of Georgia, to you and to the Members of this Committee.
I hope that you will find him to be a strong nominee for the
position of Deputy Director of the Office of Personnel
Management.
Thank you, and I yield back.
Senator Tester. Thank you, Congressman Lewis. Thank you for
the kind introduction, and you are welcome anytime on this
side--providing he has the right paperwork. No, it is good to
have you here, and you are welcome anytime.
Mr. Lewis. Well, thank you for having me, and you all come
over to see us sometime.
Senator Tester. Yes, we will do that. Thank you very much.
Mr. Lewis. Come by and visit my office. We can offer you
some peanuts and a Coca-Cola from Georgia. [Laughter.]
Senator Tester. Well, Rear Admiral Gay, that was a great
introduction by your friend Congressman Lewis.
I have a few more questions, and we talked about this in my
office a little bit. It deals with the issue of locality pay
where, in some areas of this country, there is much more demand
on the workforce. It is harder to get them. One of those areas
is the Bakken, which is in eastern Montana and western North
Dakota right now, where to get an engineer or to get anybody,
it costs more than just about anywhere else in the country. In
fact, I think Williston, North Dakota, was the most expensive
place to live in the country, believe it or not. So that tells
you what wages are.
When I had a hearing out in Sidney, Montana, they were
talking about the rent for a one-room apartment that was
somewhere between $2,000 and $2,500 a month. So it is pretty
crazy. So the pay has to reflect that cost of living.
Do you believe you have adequate flexibility to utilize
locality pay, to be able to bump it up, to be able to get the
people we need in areas like the Bakken? And the Bakken is not
the only place, by the way. There are other areas like that in
the country.
Admiral Gay. Yes, sir, locality pay in my opinion would be
the long-term solution. A short-term solution, as Director
Archuleta visited out in the Minot area, is to use the existing
pay flexibilities where the three R's, as we call them,
recruitment, retention, and relocation bonuses at one time to
retain those great workers. All of those could be done without
OPM approval. If that does not help out in those efforts, they
can request through the applicable agencies special salary
rates. And we found out last night that the Department of
Interior has submitted that special salary request to OPM. So
we are looking into that, yes, sir.
Senator Tester. OK. So currently I believe there is a 2,500
Federal employee threshold to be considered a metropolitan area
so that you can utilize locality pay. Of course, we are talking
about areas that are very rural, where the Federal workers cost
more than they should, quite frankly, because of the demand in
the private sector.
Can you figure out a way to make locality pay or do you
need our help to do that or can you do that through rural or
can you do it--how can you do it to make it work in the rural
areas?
Admiral Gay. Yes, sir, I think that would require all of
the agencies involved, including the Bureau of Labor Statistics
(BLS), the Department of Labor, and I am willing to engage in
that conversation, sir.
Senator Tester. OK. The number of Federal workers retiring
this year is double from 2009. As many as one-third of the
Federal workforce will be eligible for retirement in 2017. That
is not very far off. OPM's paper-based system has a significant
backlog that leaves retirees waiting a long time, as long as a
year, for their retirement paperwork to be processed.
Can you give me an idea on what OPM is doing to modernize
the retirement processing system?
Admiral Gay. Yes, sir. Since I have been there, I have had
the opportunity to work with Ken Zawodny and ask questions
about our efforts at improving that time, decreasing that time.
And as part of our strategic IT plan, we are procuring an
electronic case management system. We are now in the last
stages of the Request for Proposal (RFP) stage, to implement
that.
We are also looking at improving our customer service
standards because the surveys that we have taken--and we take
them seriously--found that those retirees that conduct business
online are very satisfied. So we are trying to drive a lot of
our customers to the online usage as well.
Senator Tester. OK. Thank you. Senator Portman.
Senator Portman. Admiral, I want to talk for a second about
administrative leave. The GAO released a report recently--it
was October--about the Federal agencies that have abused the
lack of guidelines, clear guidelines regarding administrative
leave. And as you know, administrative leave is paying
employees not to work. The GAO report said that the most
extended administrative leave is a result of agency
adjudication of alleged employee misconduct or criminal
activities. So it is for various things, but a lot of it is for
misconduct. They also said some of it is for physical fitness
activities, rest and recuperation for overseas employees. But
it looks like from this report a lot of it is, an allegation of
misconduct that has not been yet resolved, and so people go on
administrative leave. And during that time they get their pay.
They also get further accrued time toward their pension and for
their vacation time.
Fifty-seven thousand Federal employees were placed on paid
administrative leave for a month or longer in fiscal years 2011
through 2013. Four thousand employees were on administrative
leave for over 3 months, 3 months to 12 months. Over 260 were
on leave for 1 to 3 years. And, again, unlike medical leave,
family leave, vacation leave, most of them were on paid
administrative leave, according to GAO, for alleged misconduct.
So this seems to be something where OPM needs to get
engaged and involved, and, we are looking at this on our
Subcommittee, obviously, but it is kind of a backward incentive
system.
By the way, that cost is about $700 million, over $12,000
per employee.
One, are you aware of this? But, two, do you have any plan
to develop new guidance regarding the recording and reporting
of paid administrative leave?
Admiral Gay. On the administrative leave, our current
policy is unless the member poses a threat on themselves or the
work environment, that member is expected to return back to
work in a duty status. To me, duty status means being
productive.
That said, the leadership of each agency has the inherent
authority to manage their employees time. Again, I plan on
personally engaging the agencies to find out how we can better
provide them tools.
Senator Portman. I like the idea of, while something is
pending, having people work if they do not, again, create a
danger to others. And one thing this report leads me to wonder
is, can we streamline the adjudication process, too. When you
have people out of work for months and in some cases a couple
years waiting to get some misconduct resolved, it seems like we
have a problem on timeliness of resolution of these alleged
misconduct investigations.
So what guidance would you as Deputy Director recommend
agencies on this topic of adjudicating more quickly?
Admiral Gay. Yes, sir, the performance management system
that we have in place is not complicated, and it is based
basically on the system that I am accustomed to in the
military, and that is holding people accountable for
performance: first of all, defining what the plans are and the
mission set; second, articulating the expectations on all
sides; and, third, throughout the process making sure that you
provide feedback to the employees on their performance and
documenting that feedback.
If you do those three basic things, I think that we could
preclude a lot of the issues, and the tools are there. We
provide classroom training. We provide website instruction. And
the agencies get together to talk about these. So that is one
area that I plan to get personally involved with, speaking with
some of the agency leadership on, because the tools are there,
sir.
Senator Portman. Great. Well, thank you for coming before
us today and answering these questions, and your willingness
again to step forward and serve your country again, this time
in a little different capacity. I found it particularly
interesting, as someone who is now in his late 50s, that our
friend John Lewis called you a ``young man'' twice.
Admiral Gay. Yes, sir. He is an American icon and one of my
personal heroes.
Senator Portman. He is an icon. But I thought that was very
nice of him to call people of our generation ``young men.'' But
we are glad that a man like you is willing to step forward to
take on this task. And as I said, there are lots of challenges.
You are jumping into a really difficult situation with all the
potential retirements and actual retirements that the Chairman
talked about, and the difficulty of attracting some of the
talent to deal with the cybersecurity issue, and then some of
the other issues we talked about that are just endemic to
government where health care and all the other benefit
programs, but also how do you be sure that the taxpayers are
getting their money's worth. So we look forward to working with
you on these and other issues.
Thank you, Mr. Chairman.
Senator Tester. Thank you, Senator Portman.
I just want to followup just a little bit on the
administrative leave stuff, because I do not think it is going
to happen unless you are very proactive on it. I think the
figures that Senator Portman put out, $12,000 per person of the
ones who got administrative leave, this is the kind of stuff
that drives taxpayers crazy and it drives people like Senator
Portman and me crazy, too.
The truth is that if you have the tools, I would just say
use them. I think these agencies need to be educated on what is
right, and if you are paying somebody not to work, there better
be a very good reason for it. And I think you gave a couple
good reasons, harm to others or themselves; otherwise, they
ought to be working.
In closing, I just want to say one thing. For the last 2
years, we have had a chance to work with Senator Portman as
Ranking Member on the Subcommittee on the effectiveness and
efficiency of government, and I just want to for the record say
it has been a pleasure. I do not know what is going to happen
in this next Congress, but if I get to be a Ranking Member on a
Committee that you are chairing, I look forward to that
opportunity. So thank you, Senator Portman.
Senator Portman. Could you indulge me for just a minute?
Senator Tester. Sure.
Senator Portman. It is funny. I was thinking the same thing
earlier, that it has been great working with Senator Tester. He
is no-nonsense, kind of gets to the point, calls everybody by
their first name except for you, Admiral. You are the first
one. That is a Montana thing. And I do not know where I am
going to end up, on which Subcommittee, but I hope we will get
to work together again. And, if I am fortunate enough to chair
one of these Subcommittees, I am going to be lobbying you to
come on as the Ranking Member.
Thank you.
Senator Tester. Well, for the record, I look forward to
that, Rob.
In closing, I will just say thank you, Rear Admiral Gay,
for appearing before us today, for your opening statement, for
your answers to our questions, for your confirmation as OPM
Deputy Director.
Without objection, the record will be kept open until 5
p.m. tomorrow for submission of any written questions or
statements for the record.
With that, I would say this hearing is adjourned. Once
again, thank you.
[Whereupon, at 3:22 p.m., the Committee was adjourned.]
A P P E N D I X
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