[Senate Hearing 115-195]
[From the U.S. Government Publishing Office]
S. Hrg. 115-195
DEPARTMENT OF DEFENSE
CIVILIAN PERSONNEL REFORM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON PERSONNEL
of the
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MARCH 23, 2017
__________
Printed for the use of the Committee on Armed Services
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov/
______
U.S. GOVERNMENT PUBLISHING OFFICE
29-481 PDF WASHINGTON : 2018
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON ARMED SERVICES
JOHN McCAIN, Arizona, Chairman
JAMES M. INHOFE, Oklahoma JACK REED, Rhode Island
ROGER F. WICKER, Mississippi BILL NELSON, Florida
DEB FISCHER, Nebraska CLAIRE McCASKILL, Missouri
TOM COTTON, Arkansas JEANNE SHAHEEN, New Hampshire
MIKE ROUNDS, South Dakota KIRSTEN E. GILLIBRAND, New York
JONI ERNST, Iowa RICHARD BLUMENTHAL, Connecticut
THOM TILLIS, North Carolina JOE DONNELLY, Indiana
DAN SULLIVAN, Alaska MAZIE K. HIRONO, Hawaii
DAVID PERDUE, Georgia TIM KAINE, Virginia
TED CRUZ, Texas ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina MARTIN HEINRICH, New Mexico
BEN SASSE, Nebraska ELIZABETH WARREN, Massachusetts
LUTHER STRANGE, Alabama GARY C. PETERS, Michigan
Christian D. Brose, Staff Director
Elizabeth L. King, Minority Staff Director
_______
Subcommittee on Personnel
THOM TILLIS, North Carolina, Chairman
JONI ERNST, Iowa KIRSTEN E. GILLIBRAND, New York
LINDSEY GRAHAM, South Carolina CLAIRE McCASKILL, Missouri
BEN SASSE, Nebraska ELIZABETH WARREN, Massachusetts
(ii)
C O N T E N T S
____________
March 23, 2017
Page
Department of Defense Civilian Personnel Reform.................. 1
Junor, Honorable Laura J., Former Principal Deputy Under 3
Secretary of Defense for Personnel and Readiness, Department of
Defense.
Levine, Honorable Peter K., Performed the Duties of the Under 9
Secretary of Defense for Personnel and Readiness, Department of
Defense.
Zakheim, Honorable Dov S., Former Comptroller, Department of 13
Defense.
Questions for the Record......................................... 33
APPENDIX A....................................................... 34
(iii)
DEPARTMENT OF DEFENSE
CIVILIAN PERSONNEL REFORM
----------
THURSDAY, MARCH 23, 2017
U.S. Senate,
Subcommittee on Personnel,
Committee on Armed Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:33 p.m., in
Room SR-232A, Russell Senate Office Building, Senator Thom
Tillis (chairman of the subcommittee) presiding.
Members present: Senators Tillis, Ernst, Gillibrand, and
Warren.
OPENING STATEMENT OF SENATOR THOM TILLIS
Senator Tillis. Thank you all for being here, and I am
sorry, we are running a little bit late. I do not like starting
late. We just had a vote, but now we can dedicate our attention
to a very important topic. I appreciate the ranking member and
the Senator from Iowa joining us, and we may have other members
join us later.
But the Senate Armed Services Personnel Subcommittee meets
this afternoon to discuss a very important topic in my mind,
and it is civilian personnel reform. We are fortunate to have a
group of former Department of Defense appointees with us, and I
do mention ``former'' just in case people want to treat you
like the current ones, to discuss ideas for forward-thinking
reforms.
The Honorable Dov Zakheim, the former Under Secretary of
Defense Comptroller; the Honorable Peter Levine, former Deputy
Chief Management Officer [DCMO] and official performing the
duties of the Under Secretary of Defense for Personnel and
Readiness. Was that your full title?
[Laughter.]
Mr. Levine. Senator, I was Acting Under Secretary, and then
with the Vacancies Act, at a certain point, you are not allowed
to be ``acting,'' and they give you a tongue-tying title to
replace that.
Senator Tillis. Gotcha. The Honorable Laura Junor, former
Principal Deputy Under Secretary of Defense for Personnel and
Readiness.
I think most of us know, but it bears repeating that the
Department of Defense employs close to 1 million civilian
employees who serve in capacities supporting the warfighter,
such as depot maintenance, facility mechanics, administrative
support, nuclear engineers, scientists, healthcare
professionals, lawyers, and accountants. These individuals are
an important force multiplier for the Department of Defense
missions worldwide. Today, we will discuss areas for improving
the laws and regulations governing these employees.
The management structure governing civilian employees is
outdated, restrictive, and cumbersome. The Department of
Defense and service branches are constantly asking for relief
to make the system more flexible and manageable. This committee
has spent the last few years legislating around restrictive
civilian personnel practices, adding direct hiring authorities
for scientists, students, acquisition personnel, and requiring
stronger performance metrics and demanding that employees and
supervisors be held accountable for mission accomplishment.
However, these efforts are merely a start. Beginning in
late 2015, the Senate Armed Services Committee held a series of
hearings at the full committee level dedicated to the
Department of Defense management overview and reform. At our
November 15, 2015, hearing, ``Overcoming Obstacles to Effective
Management,'' Mr. Richard Spencer, a former member of the
Defense Business Board, testified to the challenges faced by an
outdated system that prioritizes tenure above all else.
He noted, ``On the civilian side, we need to adopt
meaningful management performance measurement tools and educate
managers on how to use those tools in order to craft a high-
performance Government service and Senior Executive Service
cadre.
``To quote a charge-charging GS-14 [General Schedule] we
interviewed, `How can the building compete for the best and
brightest when the strategy for long-term success and promotion
is just do not die?' ''
Today, we will discuss alternative strategies for
effectively hiring, managing, supporting, promoting, and
divesting Department of Defense civilian personnel. I look
forward to hearing from our distinguished panel on the
important issue of civilian personnel reform.
Senator Gillibrand, would you like to read an opening
statement?
STATEMENT OF SENATOR KIRSTEN E. GILLIBRAND
Senator Gillibrand. Sure. Well, thank you, Senator Tillis,
for your leadership and holding this hearing.
I want to join you in welcoming our witnesses as we discuss
this important topic.
I want to start by stating for the record how essential I
believe the civilian workforce is to the Defense Department.
They are integral to the total force. They provide continuity
at all levels of the force, from units deployed overseas to
installations in the States to headquarters in Washington.
They maintain our equipment at depots throughout the
Nation; provide contracting and legal expertise; investigate
misconduct, fraud, and waste and abuse; and address myriad
issues within the services, such as investigating and
responding to sexual assault and hazing. They are Americans who
are committed to our national defense and may spend a lifetime
performing vital work on behalf of the Nation in the capital
region, across the country, and across the globe.
In recent years, this committee and this Congress have used
the civilian workforce as a target for cost cutting, with
little focus on the larger strategic picture of how we recruit
and retain the best people to support our warfighters. Congress
reduced the civilian workforce's retirement benefits twice and
mandated across-the-board reductions to workforce that were
completely divorced from strategic purpose or consideration for
health of the force.
These measures have hurt morale, and they inhibit the
Government's ability to properly shape this workforce. Under
President Trump, management of civilian workforce has
deteriorated further. Days after his election, the President
instituted a Government-wide hiring freeze, which, though it
has a national security exemption, has led to the confusion,
frustration, and disarray within our civilian workforce.
As just one example, my office has fielded calls from
concerned military parents whose DOD [Department of Defense]
school cannot hire teachers and whose military child care
center cannot hire staff needed to address child care
shortages. I know many others on both sides of the aisle are
receiving similar complaints.
There is a better approach to civilian personnel reform,
which focuses on improving the Department's ability to hire
talented individuals, sharpens the incentives to manage the
workforce, and ensures the integrity of the workforce by
enforcing merit principles and competitive hiring practices.
I thank the chair, Senator Tillis, for holding this hearing
so we can hear directly from these experts about how to more
efficiently and effectively manage DOD's civilian workforce to
shape the force we need today and into the future.
Lastly, I would be remiss if I did not point out that most,
if not all, legislation in this area is actually in the primary
jurisdiction of the Homeland Security Committee and Government
Affairs Committee, which Senator McCaskill is ranking on.
Again, I thank the witnesses and look forward to your
testimony.
Senator Tillis. Thank you, Senator Gillibrand.
Senator Warren, welcome to the committee.
Senator Warren. Thank you.
Senator Tillis. Thank you for attending.
Senator Warren. Thank you, Mr. Chairman.
Senator Tillis. We will start with the witness statements,
and we will begin with Dr. Junor.
STATEMENT OF HONORABLE LAURA J. JUNOR, FORMER PRINCIPAL DEPUTY
UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS,
DEPARTMENT OF DEFENSE
Dr. Junor. Thank you, Chairman Tillis, Ranking Member
Gillibrand, for allowing me to come and talk about a workforce
that I have the utmost respect for.
I have already submitted my written testimony. So I would
like to just briefly cover some of the observations and
thoughts I have on reform.
Over the course of my career, the vast majority of my
colleagues have been high performers, if not overachievers,
even in the midst of furloughs, pay freezes, and a constant
rhetoric about how they more often detract from the business of
the Government--of the Department rather than being part of the
critical enabler.
In fact, most of the frustration I have observed is not
with the DOD's civilians themselves. Rather, it has been with
the inflexible human resource system that governs them.
For example, I have observed that it is hard to hire
employees especially if you require particular skills for a
position. It is also surprisingly difficult to hold employees
accountable for poor performance or violating clearly
established departmental or Federal policies. Finally, I found
that it is difficult to adapt the inventory of Federal
civilians even when the work goes away or substantively
changes.
For example, consider my experience on Secretary Gates'
efficiencies task force in 2010. As I am sure you are aware,
Secretary Gates wanted to shift the Department's resources away
from overhead and towards activities more closely aligned with
warfighting capabilities.
Rather than repeating mistakes of blind percentage-based
reductions, he preferred the painstaking approach within OSD
[Office of the Secretary of Defense] of identifying and then
eliminating low-priority lines of work and the staff that was
associated with them. In the end, we found that adjusting the
inventory of the traditional Title V workforce was much harder
than we expected it to be.
I believe there are some changes that could yield a more
efficient workforce. First, publicly recognize the talent and
significance of our civilian workforce. Again, this workforce
has been plagued by furloughs, pay freezes, and this rhetoric
that systemically associates them with being more of a burden
to the Department than a critical enabler. It is hard to
believe that we will continue to attract top talent with this
as a background vocal.
In addition, we should consider finding the right balance
among Federal civilian, military, and contract labor forces.
Each one of these labor pools has pros and cons. Imagine what
we could do if we allocated work based on those attributes
alone.
We should also evolve towards flexible hiring authority,
specifically the use of Title X, term employees, and I want to
point out that I am currently sitting in a Title X term billet
right now. That is how I am employed at the National Defense
University.
Finally, I want to consider holding supervisors more
directly responsible for the performance of their subordinates
and also supporting their validated employee assessments.
In closing, I am proud to serve as a DOD civilian and
humbled by the talent of my colleagues. This is an important
topic. Thank you again for holding this hearing, and I look
forward to your questions.
[The prepared statement of Dr. Junor follows:]
Prepared Statement by Laura J. Junor, PhD
The views expressed in this testimony are my own and do not reflect
those of the National Defense University or the Department of Defense.
Chairman Tillis and Ranking Member Gillibrand, thank you for
allowing me the opportunity to talk about a workforce for which I have
the deepest respect. I've spent the majority of the last two decades
analyzing military readiness, and in the course of those analyses I've
learned that the quality of our people is the single greatest
determinant of the readiness of our force. We know that this finding
extends to Department of Defense (DOD) civilian personnel as well;
these folks are the artisans at our maintenance depots, the medical
professionals that care for the physical and mental well-being of our 9
million beneficiaries, the intelligence analysts and cyber security
experts that keep us safe, and the scientists and engineers that are
solving tangible operational problems today and developing new
capabilities for tomorrow. Attracting and maintaining a high-quality,
high-functioning federal workforce is a critical enabler of DOD's
mission, yet those that have worked in this personnel system are well
acquainted with its challenges. I am honored to share with you my
observations as a member and senior manager of this workforce. I will
close with my thoughts on evolving the federal workforce in ways that
benefit both the employees and their mission.
observations
I've observed the typical DOD civilian to be a dedicated
professional who takes the mission of the Department very seriously.
Contrary to stereotypes, over the course of my career the vast majority
of my colleagues have been high performers, if not overachievers, even
in the midst of furloughs and perennial pay freezes. The typical
federal civilian has marketable professional or technical skills and is
not employed in the Washington, DC area. The average worker is about 47
years old with 12 years of service. \1\
---------------------------------------------------------------------------
\1\ From the Defense Civilian Personnel Advisory Service FY2017 DOD
Appropriated Fund Population Summary.
---------------------------------------------------------------------------
Our civil service system today is based on the same merit
principles on which it was founded in 1883; and there's a lot of
goodness in those principles. For example, we should:
Recruit, select, and advance our people on the basis of
merit, after fair and open competition
Treat employees and applicants fairly and equitably
Provide equal pay for work of equal value and reward
excellent performance
Retain or separate employees on the basis of their
performance
Protect employees from reprisal for lawful disclosures
(whistleblower rights)
Create an environment that encourages the development of
new talent and ideas
However the way that we have ``operationalized'' those principles
ends up being extremely restrictive and that's detrimental to our
mission and to our workforce. Most of the frustration I've observed is
not with DOD employees themselves. It's been with the inflexibility of
the human resources system that governs them. In fact, we're not
talking about only one system; DOD has more than 66 different pay
systems, and each has its own set of laws, regulations, and policies.
It is hard to hire employees especially if you require particular
skills for a position.
According to my colleagues in the Office of the Under Secretary of
Defense for Personnel and Readiness (OUSD P&R), it takes between 80 and
150 days to hire someone in DOD, and that is when things go smoothly.
In 2014, I attempted to hire an experienced, Title V General Service
(GS)-14 readiness analyst. I was looking for an excellent writer, with
demonstrated analytic skills and experience in some facet of readiness
management. I gave up after nearly a year of frustration. Here's what I
learned. First, in order to hire someone, you have to have an
authority. We have at least 34 hiring authorities; that means a
different set of regulations and processes for each authority. We have
so many authorities, that in many cases, we don't know the rules for
using them, or when we do know the rules, they are applied differently
depending on where you work.
For example, an excellent pathway to bring in new, skilled talent
to the federal workforce is through the National Security Education
Program Boren (NSEP) Scholars and Fellows program, which provides
federal funding to bright undergraduate and graduate students to study
the languages and cultures most critical to national security. However,
to date, not enough federal human resources professionals know that
Congress has provided direct hiring authority for this talented group
of students. More simply, we give these students funding to fill a
critical security need, require them to pay that funding back with
federal service, and then struggle to find them positions in which to
serve. Similarly, we typically only use a small percentage of the
Department's authorized allotment of Highly Qualified Experts (HQEs).
The Department has recently streamlined this process, but the true
demand for HQEs is still likely more than the amount we are bringing on
board. Again, many federal human resources professionals are probably
unclear about the myriad of hiring options.
The second thing that I learned as I attempted to hire a readiness
analyst is that describing the required skills or performance standards
for a job is surprisingly centralized. These standards also factor into
how much we can pay an employee. Clearly, setting accurate and current
performance standards is a critical element of hiring and managing
employee performance. Under one of our pay systems, the General
Schedule, jobs are ``classified'' based on a set of standards; in many
cases, these standards are outdated or irrelevant. For example, the
standard for ``computer science'' was developed in 1988. The standard
for telecommunications was developed in 1990. It can take years to
update or develop a new standard. Information Technology (IT) standards
were updated in 2011 after three years of work. Given changes in IT,
they are likely out of date again.
It is extraordinarily difficult to adapt the inventory of federal
civilians even when the work goes away or substantively
changes.
Consider my experience on Secretary Gates's efficiency task force
in 2010. Faced with 3 years of $1 trillion federal budget deficits, two
demanding wars, increasing concerns about China, and a growing
realization that the economy was disintegrating into a national
security concern, Secretary Gates wanted to shift the Department's
resources from overhead activities to those activities that directly
contributed to warfighting capabilities. Rather than repeating the
mistakes of past blind percentage-based reductions, he preferred a
painstaking approach of identifying and then eliminating low-priority
lines of work and the staff that was associated with them. His initial
focus was on his own organization, the Office of the Secretary of
Defense (OSD). His own hand-picked team worked with the OSD staff to
identify these low-priority production lines, inventory the associated
personnel and funding, and ultimately eliminate them in the next budget
submission. We underestimated how difficult this was going to be.
Without a reduction in force (RIF), the people that were associated
with these billets remained a part of OSD, despite the fact that their
work went away. Now the Department had the responsibility to find them
other jobs. Many were placed in positions for which they were well
matched. But many were placed more out of a need to find them ``any''
position rather than whether they were well qualified for a particular
position. There were others that literally drifted without a billet for
years. We had written into our procedures for addressing these
personnel a provision that kept them from turning down more than one
offer; we had not considered the prospect that some--many of them
senior executives--would not receive an offer, even after repeated
interviews. While the number of individuals in this category was very
small, it does illustrate some of the challenges with the traditional
title 5 system.
There are also few options for adapting a traditional title 5
organization to changes in the nature of work, such as those that arise
because the work becomes more technical or requires new sets of
advanced skills. Consider the Defense Language Institute (DLI), an
organization primarily composed of title 10 instructors, each of whom
is a native language speaker hired on a term basis. At DLI, the
organization's demand signal is defined as the number of students for
each language. As you can imagine, this demand signal changes
significantly over time as different areas of the world become
concerning. In the Cold War, for example, proficient Russian speakers
were in high demand. As the wars in Iraq and Afghanistan evolved,
different Middle Eastern languages became more critical. Now, DLI is
likely seeing another swing in student requirements as Russia and the
Balkans become increasingly concerning again. Because these are title
10 instructors, DLI could always adjust the workforce accordingly, thus
avoiding the need to figure out how to get Japanese or Spanish
instructors to teach Farsi, or more recently, how to get Farsi
instructors to teach Russian.
It is surprisingly difficult to hold employees accountable for poor
performance or violating clearly established departmental or
federal policies.
Resolving cases of low performers or employees who engage in
misconduct is a sensitive issue, and it should be. Let me begin with
two clarifying points. First, I've only ever experienced a handful of
these cases in all of the years that I've been employed by or
associated with DOD. Second, although this problem is small, it matters
a lot. The harm done by not resolving these cases is often born by
employees across the whole of the affected organization. Again, this is
a population that takes enormous pride in their mission and, when faced
with a peer that is not holding up their part of the work, they often
attempt to make up for that loss. In the case of an employee who
engages in malfeasance, the peers often bear the brunt of the issue.
Supervisors are duty-bound to protect their organizations from these
effects, and most recognize that. Few follow through though. Based on
my experiences, here's why I think that is.
First, it takes years of copious record keeping and evidence
gathering to even begin holding an employee accountable. In my
experience, even documented evidence from 3rd parties (e.g.,
inappropriate activity on federal computers, time card fraud, and
inappropriate contract management) or disconcerting results from
repeated formal climate surveys were insufficient to overcome the
reticence of senior leaders, labor management relations personnel, and
attorneys, to move forward with action against an employee in excess of
a minor counseling session. This is based on the fear of retaliatory
complaints and law-suits from the poorly performing personnel.
Employees must be protected from unsubstantiated or spurious
accusations from their leaders; there is no question about that. But I
found that even with clear and convincing evidence of misconduct or
poor performance, there is almost no support for imposing meaningful
penalties, much less undertaking the termination of an employee.
Complicating matters, I've observed supervisors' tendencies to
over-rate average or even poorly performing employees. This is likely
true for three reasons:
It is simply easier for supervisors to give a
satisfactory rating. There is little justification required and it
preserves peace in the organization.
If it's a title 5 employee, that employee will likely
stay in that position for many more years, even if their performance is
rated below average. Put slightly differently, there is little short-
term gain from a low assessment, and the potential for a great deal of
loss, especially if the employee files a formal complaint as a result
of the appraisal.
There is a credible fear of the employee filing a
retaliatory formal complaint against a supervisor. It typically takes a
year or longer for most of these complaints to resolve, leaving both
the employee and the supervisor in a very difficult position.
reform thoughts
I've argued that the civilian workforce is a critical enabler of
DOD's mission, but there are real challenges in how we manage this
workforce that constrain its extraordinary potential. What follows are
my thoughts for how to address these challenges.
Publically recognize the talent and significance of our civilian
workforce.
This workforce has been plagued by furloughs, pay freezes, and
worst yet, systematic rhetoric that our civilian employees detract from
DOD's mission, rather than serving as a critical enabler. It is hard to
believe that we will continue to attract top talent with this as a
background vocal. There is a body of research that suggests that
mastering a skill and making a contribution are even more powerful
personnel motivators than fiscal rewards. \2\ The converse is also
true; the effects of careless disparagement of individuals that have
mastered their craft and are contributing in meaningful ways is harmful
and unnecessary. \3\
---------------------------------------------------------------------------
\2\ A summary of this research is in Daniel H. Pink, Drive: The
Surprising Truth About What Motivates Us (New York: Riverhead Books,
2009).
\3\ Bob Hale, the former Comptroller and Chief Financial Officer in
DOD, made the same point in his recent publication. Robert F. Hale,
``Business Reform in the Department of Defense: An Agenda for the Next
Administration'' in Defense Strategies and Assessments (Washington, DC:
Center for a New American Security, November 2016).
---------------------------------------------------------------------------
Find the right balance among the federal civilian, military and
contract labor forces.
Although Secretary Gates's efforts to reduce overhead spending were
much harder to accomplish than any of us realized, his objection to
blind, ``salami slice'' cuts was well founded. Reducing any aspect of
this workforce without reducing the actual work that goes with it will
exacerbate existing inefficiencies and performance problems and
jeopardize the mission. Such cuts are also likely to result in an
eventual resurgence of some aspect of the workforce that has been
``eliminated'', despite the best attempts to prohibit that. There are
pros and cons to utilizing each of the broad labor categories:
civilian, military, and contractor, and when the work is allocated
based on these attributes, we can and should expect to achieve a more
effective and efficient workforce. That said, such an outcome requires
policy and legislative tools to adapt the federal workforce; I will
discuss those below.
As a means of finding real workforce efficiencies, consider the
potential benefits from modernizing the human resources IT systems that
we use to track and manage civilian and military personnel. Both are in
tremendous need of updating. Upgrades offer the very real potential of
saving significant labor while providing a significantly better
product. For example, the military personnel management system remains
as paper-intensive as it was in the 1950s. Even today, retiring
personnel are told to make copies of their personnel records; typically
hundreds of pages. We've invested in a very expensive electronic health
record, but the very first medical form is the scan of a piece of paper
from a Military Entrance Processing Station. On the civilian side, the
myriad of human resources systems are equally inefficient, often
inaccurate and incomplete, and lack the ability to ``talk to'' one
another. Again, a modern system would certainly reduce labor and error
costs as well as increase productivity.
Evolve toward simpler, flexible hiring authorities.
The single biggest challenge that I've experienced in managing the
civilian workforce is the inability to shape that workforce. That
includes moving people with specific skills into jobs that require
those specific skills and removing those that are either not performing
well or those whose skills are no longer needed. I've found that title
10 offers a great deal of flexibility, while maintaining incentives
that will attract a quality workforce. I have managed title 10
workforces and am currently occupying a title 10 positon.
I've already described the critical workforce shaping advantages
this authority provides to DLI. I am currently employed at the National
Defense University (NDU) where 80 percent of teaching and research
faculty are title 10. There is no evidence that this causes a problem
attracting and retaining a talented workforce. In fact, my peers and
I--each of whom has been hired for a particular and finite term of
years--don't mind being held to challenging but fair performance
standards, even at the risk of not being renewed for another term. This
is an overachieving workforce that gains a lot of satisfaction from
being recognized as authorities in their fields. The organizational
risk of having such high performing employees is that they are
extremely marketable and can be lured away at any moment. Retention has
to be explicitly managed. At NDU, we do this with academic freedom,
retention incentives, and publication support.
I understand the concerns of many that moving toward a title 10
civilian workforce would appear to forsake the tenets of a merit-based
civil service system, potentially increasing the potential for
unscrupulous managers to mistreat or mismanage applicants for vacant
positions and subordinates. This risk can be minimized. NDU employs a
governing Talent Management Review Board to ensure that our personnel
are treated fairly and with respect. The typical term for an NDU
employee is three years; this term can be renewed indefinitely, but
each time, a decision to renew (or not) is made deliberately, based on
an employee's performance and the University's requirements. NDU
requires that every term employee be notified about whether they will
be renewed at least a year before the end of their term. Each of these
decisions is proposed by the employee's supervisor, but must be
approved by the board. More specifically, an employee's supervisor, two
years prior to the end of the term, recommends whether that employee is
on target for renewal. If the issue is performance, the employee will
have another year to improve before a final decision is rendered on his
or her renewal. If the issue is a change in the University's
requirement--meaning that the individual's skills are no longer
needed--the employee's term is simply not renewed.
A title 10 workforce means that there will be more employee
turnover than we see with title 5 employees. That means new people will
join organizations and bring with them new skills and perspectives.
This ensures that the demand and supply for labor remains in sync. Both
of these are great attributes that contribute to a highly effective
organization. It also means that some people will have to leave the
organization before they are ready to do so, and that can be hard. That
is unavoidable, but it is a reality that millions of people in both the
public and private sectors manage successfully throughout their
careers. We owe employees a fair and predictable system and we can do
that even, while at the same time affording both DOD and our employees
greater flexibility.
Not every organization would benefit from a title 10 workforce. But
title 10 does seem to fit organizations with the following
characteristics:
The potential for the nature of the work to change
significantly over time
Work associated with technical/professional skills that
require currency
Furthermore, organizations should be delegated decisions over the
critical elements of implementing a title 10 workforce. These include:
Term length (e.g., 2 to 5 years)
Establishment of clear performance metrics
Renewability (limits on the number of terms authorized or
indefinite)
Competitive salaries
Other perks, such as education and training support,
telework agreements, sabbaticals, or IPA-type \4\ experiences within
and outside of government to retain highly performing employees
---------------------------------------------------------------------------
\4\ IPA stands for Intergovernmental Personnel Act. This is a
program sponsored by the Office of Personnel Management that allows for
the ``temporary assignment of personnel between the Federal Government
and state and local governments, colleges and universities, Indian
tribal governments, federally funded research and development centers,
and other eligible organizations''. These assignments are for a finite
term; usually one or two years with the potential to renew the term
once. From .
---------------------------------------------------------------------------
Hold supervisors responsible for the performance of their subordinates
and support their validated employee assessments.
The most basic reform must address the failure to identify current,
job-specific performance standards and to hold employees to those
standards. Moving to a title 10 authority will not be useful if
supervisors don't know what good performance looks like or are
unwilling to hold employees accountable for that performance. This
begins with decentralizing position descriptions and performance
standards to reflect current requirements of individual vacancies.
Supervisors are responsible for accurately assessing each individual's
ability to meet those requirements. Holding supervisors personally
accountable for the work of their subordinates is essential. Each
supervisor should have in one of his or her performance objectives an
element that addresses how well their employees perform individually
and as an organization. For example, if an employee fails on a project,
the supervisor's rating should reflect whether the supervisor actively
addressed that failure. Conversely, supervisors should be rewarded when
individuals and the collective improve. There is no way to avoid the
supervisor's fear of retaliatory charges associated with low
performance ratings or holding employees accountable for major policy
violations. Employees must have the means to signal unfair or unethical
supervisor treatment. However, we can and should expect all charges to
be reconciled within six months. Faster resolution would benefit
everyone.
In closing, I am proud to serve as a DOD civilian and humbled by
the talent and dedication of my colleagues. We can provide a more
rewarding work experience and a better mission outcome by simplifying
our hiring authorities, decentralizing their implementation, tailoring
performance standards and position descriptions to the specific
requirements of each job, and definitively recognizing both good and
bad performance.
Senator Tillis. Thank you, Dr. Junor.
Mr. Levine?
STATEMENT OF HONORABLE PETER K. LEVINE, PERFORMED THE DUTIES OF
THE UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS,
DEPARTMENT OF DEFENSE
Mr. Levine. Thank you, Mr. Chairman, Senator Gillibrand,
members of the subcommittee.
Thank you for taking on this issue. I think it is a
tremendously important issue, and I agree with--with I think
everything that Dr. Junor just said.
I would like to--you have my written statement. So I would
like to just focus again on a few key points.
First, the DOD's civilian workforce is not only incredibly
important. It is also an incredibly diverse workforce. We have
everything from nurses to truck drivers to people who make
foreign policy recommendations, and I think that you need to
understand that, and I hope that you will keep that in mind and
avoid ``one size fits all'' solutions, thinking that the same
solution that we need for the policy adviser is also
appropriate for the truck driver.
With that said, I would like to specifically address a
number of the topics that you raised in your invitation letter.
First, hiring. It seems to me that the single most important
thing that you could do in hiring is the step that you took
last year by giving DOD direct hiring authority for students
and recent graduates.
I know when I was in the Department, we really appreciated
that, and if there were one thing I could urge you to do, it
would be to make that authority permanent. If you were going to
look for other areas to reduce red tape, I would suggest giving
the Department its own classification authority independent of
OPM.
I would--you might also want to think about establishing a
separate DOD SES [Senior Executive Service] workforce, a
defense SES workforce so that DOD would be able to hire its own
SES employees independent of OPM [Office of Personnel
Management] review and approval. I cannot tell you how long and
aggravating that OPM review and approval process is.
Second, with regard to pay systems, DOD has long benefited
from the flexible pay authorities that Congress has authorized
for science and technology employees, acquisition employees,
medical professionals, the cyber employees, and I support these
kinds of authorities--the expansion of these kinds of
authorities to financial managers, policy experts, and other
knowledge workers.
I think there are a variety of approaches you could
consider for these kinds of knowledge workers, including the
use of step increases based on performance rather than tenure,
more flexible bonus authority. I think it is extraordinary
right now, and I do not know how many people know this. But an
SES employee can get up to 15 to 20 percent of their salary,
their base salary in bonuses, but a GS-15 is limited to about 1
percent. Now that is not a balance in terms of incentives that
makes a lot of sense to me.
The one thing I would be cautious about is an across-the-
board pay banding approach like what the Department tried with
the NSPS [National Security Personnel System] system, and that
is because, again, looking at the diversity of the workforce,
the authorities that the Department needs for its high-tech
professionals and knowledge workers may not be appropriate for
clerical workers or truck drivers, wrench turners, warehouse
workers, and others.
Experience shows that it will take a lot of effort for the
Department to establish that to try to impose that kind of
authority. In the past, that undermined the entire effort, and
the effort to reform DOD personnel practices were lost over
that.
Third, performance management. I was personally
disappointed by the recent change in the DOD performance
management system that makes it more--that eliminated--reduced
the number of evaluation categories, making it more difficult
to distinguish employees who show consistent hard work from
those who just meet minimum requirements. This may be the right
answer for some parts of the workforce, but I would advocate
again, at least for the knowledge-based workforce of the
Department, restoring a fourth evaluation category so that
those employees who go above and beyond requirements can be
rewarded for their effort.
Finally, with regard to preference eligibilities, I think
that the committee made a noble effort last year to address
this issue, even though the language that you drafted proved
problematic because of unintended consequences for the veterans
preference, and I would suggest that if you choose to address
the issue again, it would be wisest to focus specifically on
internal promotions and to clarify that internal promotions are
to be merit based, with preferences as a tie-breaking factor.
That would then ensure that the role of preferences for all
outside hires would remain unchanged.
I appreciate your inviting me here today. I appreciate your
taking on these difficult issues. They are very complex, and I
look forward to your questions.
Thank you.
[The prepared statement of Mr. Levine follows:]
Prepared Statement by Peter Levine
Chairman Tillis, Ranking Member Gillibrand, Members of the
Subcommittee, it is a pleasure to appear before your Subcommittee this
afternoon. The views I express are entirely my own, and should not be
interpreted as reflecting any position of my new employer, the
Institute for Defense Analyses.
As you know, I worked on the staff of the Armed Services Committee
for 18 years, and I place a tremendous value on the work that you do to
support our men and women in uniform and their families. As the
Subcommittee undertakes the important task of civilian personnel
reform, I would suggest that you take into account a few
considerations.
First, the civilian employees of the Department of Defense are an
essential pillar of the Department on which our military relies to
perform its critical missions around the world every day.
DOD civilians administer highly complex and legislatively mandated
personnel and pay systems. They run training and education programs,
manage travel and change of duty stations, and provide security,
support, and facilities sustainment on military bases. They help
address problems like sexual assault, suicides, bullying and hazing,
and drug abuse. They provide financial advice, voting assistance, and
family life counseling to Service members around the world. They play
key roles in running 664 hospitals and clinics, 172 schools for
military children, 1,880 retail stores, and 2,390 restaurants for our
men and women in uniform.
DOD civilians also serve as operational enablers in the
intelligence and cyber domains, and are essential to warfighter
training and combat system and equipment readiness. They help manage
and oversee more than $200 billion a year in acquisition spending and
run the largest and most sophisticated research and development
activity in the world. They operate depots and arsenals that maintain
and recapitalize a huge inventory of the most complex and advanced
fighting equipment in human history. They are the life-blood of a
logistics system that works 24 hours a day, 365 days a year to ensure
that military equipment and supplies are ready when and where needed,
anywhere in the world, and often with little or no notice.
Second, the vast majority of DOD civilian employees are highly
motivated, hard-working, and strive to perform with excellence. In my
time at DOD, I found that the career civilians who surrounded me
believe strongly in the importance of the Department's mission and want
to contribute to it. New projects and new work are embraced
enthusiastically by employees who work long hours without any reward
beyond the challenge of the work itself and the understanding that the
results they produce are valued by the Department's leadership.
This, in my view, is the great competitive advantage of the
Department of Defense in the employee marketplace. DOD will never be
able to pay its civilian employees as much as the private sector. What
the Department can offer instead is challenging assignments, great
responsibility, and the pride that comes from serving a cause that is
greater than oneself. Of course, this also means that when we treat DOD
civilians as worthless bureaucrats who are sucking up money that could
be better spent on more ships and planes, we risk undermining the
competitive advantage that enables us to attract and motivate the
capable employees we need to support the national defense mission.
Third, the laws, rules, and practices governing the civil service
system at DOD have become overly bureaucratic and stultified over the
years. As a result, it is more difficult than it should be to hire the
talent that the Department needs, to remove workers who aren't up to
the job, and to advance capable employees into the positions in which
they can contribute the most. Capable military and civilian leaders at
the Department are generally able to work within the existing system to
get the results they need, but it can be frustrating and time-consuming
for everyone involved.
For example, when I was serving as Acting Under Secretary for
Personnel and Readiness, it came to my attention that when a civilian
employee moves from one DOD component to another--for example, from the
Army to the Navy, or from the Air Force to the Defense Logistics Agency
[DLA]--he or she was treated as a new employee. That meant getting a
new ID [identification] card, a new drug test, and repeating mandatory
training events the employee had already completed in the previous
position. By establishing reciprocity in these areas, we were able to
save more than $25 million dollars a year--and avoid countless hours of
aggravation for employees who no longer have to undergo these
meaningless requirements.
This Committee has already enacted significant new flexibilities
that enable the Department to better manage its civilian workforce.
These include demonstration programs providing flexibilities for
science and technology employees, for acquisition employees, for
intelligence employees, for medical professionals, and most recently
for cyber employees. They include the direct hiring authority that you
enacted last year, and the revised Reduction in Force authority that
you enacted the year before that.
Here's how important these reforms are: two years ago, one of my
SES managers complained to me that her aging workforce was reluctant to
embrace new technologies. A second manager said that she didn't have
this problem--her workforce skewed young and adopted new technologies
on their own without prompting. The difference was that the second
manager was in the Acq Demo program, with direct hiring authority that
greatly enhanced her ability to bring recent graduates into the
workforce. The legislation you enacted last year provides this critical
authority to the entire Department of Defense.
So, we have a highly capable and motivated civilian workforce,
working in a clunky personnel system that too often impedes their
performance. This isn't a contradiction, but it does mean that while
reform is needed to improve workforce management, the reform effort
must be carefully targeted to ensure that it addresses what is broken
without undermining the large and diverse civilian workforce on which
the Department relies today.
I would suggest that the committee consider three principles to
ensure that your reform efforts build and improve upon DOD's civilian
workforce and do not risk breaking it.
First, beware of one-size-fits-all solutions. A reform that works
for scientists and engineers in defense laboratories might not meet the
needs of wrench-turners in the depots and arsenals.
When I served as DCMO, I learned that the hiring process in the
Pentagon was hamstrung, in part, because we relied on a standard
questionnaire applied by the Defense Logistics Agency to determine who
was ``best qualified'' for a position. Because this questionnaire
failed to serve as an effective screen, hiring managers spent countless
hours refining position descriptions to ensure that their new hires
were actually qualified.
I got around this problem by authorizing hiring managers to use
panels of subject matter experts, in lieu of the DLA questionnaire, to
determine who was really ``best qualified'' for a position. I did not
make this process mandatory, however, because the Director of the
Pentagon Force Protection Agency told me that he needed to be able to
hire several hundred new law enforcement officers at a time, and it
would not be practical for him to use expert panels in lieu of a
screening test. This was an important lesson for me in the diverse
needs of different parts of the DOD civilian workforce.
Second, don't reinvent more than you have to. Our civil service
system is incredibly complex. It has thousands of pages of rules--but
that is because there are thousands of issues that human resource
managers must address, and they cannot do so without guidance.
Back in the 1990s, when then-Vice President Gore was leading a task
force on ``reinventing government,'' he made a big show of throwing out
the civil service rule book as a streamlining measure. I remember being
told at the time that savvy human resource managers kept bootleg copies
of the rules, because the same questions were still going to come up
and they were still going to need to know how to answer them.
A few years later, when Congress authorized the Department of
Defense to establish a new ``National Security Personnel System,'' the
Department spent countless hours writing new rules to replace the old
ones. NSPS made changes to parts of the system that probably needed
change, but it also changed parts of the system that were working
perfectly well. In the end it failed because of the controversy
generated by parts of the new system that probably weren't necessary at
all, and this failure dragged down the prospect of constructive
reform--in areas where it remains very much needed--for another decade.
Finally, any reform effort should treat employees as allies, not
enemies. I know, for example, that there is great interest in making it
easier to remove poor performers. It is true that the Department has a
very small number of civilian employees who simply aren't up to the job
or refuse to carry their share of the workload. These employees can be
a drag on the rest of the workforce, and are very difficult to remove.
A large part of the problem is that few DOD managers believe it is
worth the time and effort required to go through a performance
improvement process that can take more than a year to complete. At
least in the short run, they are probably right: the overall
productivity of a program or office is likely to go down, not up, if
the senior manager is required to spend huge quantities of time on an
employee who produces a tiny amount of work. The kind of managers we
want in the Department--the kind of people who are motivated by the
mission--would rather spend their time on substantive work, even if it
means leaving an unproductive employee on the payroll.
As you consider possible measures to address this issue, however,
you consider the impact that any proposed changes would have on the
balance of the workforce. If legislation that is intended to address a
problem with one percent of the workforce is perceived as threatening
and hostile by the other 99 percent, it may undermine morale and reduce
the Department's ability to attract and retain the capable employees
that it needs. The civilian workforce will not become more productive
if problem with a small number of poor performers is addressed with
measures that are perceived as a declaration of war on all employees.
Fortunately, I believe that there are steps that Congress and the
Department could take to make it easier for managers to remove poor
performers within the existing rules, without threatening the vast
majority of the workforce whose performance and work ethic does so much
for the Department every day.
For example, this Committee recently enacted legislation that
established a two-year probationary period for DOD civilian employees,
but the Department has done little to take advantage of that
legislation. What if DOD were to institute a routine review, before the
expiration of the probationary period, to assess the employee's
performance and determine deliberately whether or not he or she should
be retained as a tenured employee?
With regard to the existing removal process, why not offer
assistance to managers rather than requiring them to bear the burden of
the performance improvement process alone? Isn't it possible that by
establishing a few dedicated performance improvement managers in an
agency, we would change the managers' calculus, opening a route for
them to remove unproductive employees without sacrificing countless
hours of their own time to the effort?
These are difficult issues, but important ones. I thank the
Subcommittee for taking on the issue of civilian personnel reform, and
I thank you for inviting me to participate in your review. I look
forward to your questions.
Senator Tillis. Thank you, Mr. Levine.
Dr. Zakheim?
STATEMENT OF HONORABLE DOV S. ZAKHEIM, FORMER COMPTROLLER,
DEPARTMENT OF DEFENSE
Dr. Zakheim. Well, thank you, Chairman Tillis and Ranking
Member Gillibrand and members of the committee.
I appreciate your giving me the chance to testify on this
issue. I have also submitted written testimony, and I would
request that it be included in the record, if that is okay?
I do not disagree with much of what you just heard, but I
would go further and wider. First of all, and maybe this is
because I not at all that long ago was a green eyeshade, DOD
civilian personnel account for about 36 percent of all full-
time DOD personnel, including the Guard and Reserves that serve
full time.
In the past 15 years, DOD has added 77,000 more civilians.
That represents an 11.5 percent jump in the workforce since
2002. Military end strength declined by 8 percent, or 120,000
personnel, in the same time frame.
Over those 15 years, civilian pay increased by a very
healthy 31 percent, and most of that increase went to General
Schedule white collar workers. The blue collar wage board--it
is about one-third of the total civilian force--their pay
actually declined in fiscal year 2017 dollars by about 5.5
percent. So you got a real imbalance right there. At the same
time, of course, as you know, total military pay for Actives
and full-time Guard and Reserve barely rose at all, 0.2
percent.
So with civilian pay consuming a significant portion of the
budget and in light of other needs in the defense enterprise,
whether it is to increase Active Duty end strength or enhance
readiness or provide more funding for acquisition, you have got
to look at whether the productivity of the civilian workforce
justifies the resources it has consumed over the last decade
and a half, and I think the answer is clear. It simply has not.
It is highly questionable whether defense civilians--not
all of them, obviously--are making the most of information
technology systems that are available to them, operating at the
cutting edge of cyber technology, or acting as an educated
consumer when procuring the vast range of high-tech systems
that combine with our military personnel and comprise the
lifeblood of our fighting power.
Finally, the availability of contractors to carry out many
of the same missions as the civilian staff, which we politely
term ``staff augmentation,'' has often resulted in civilians
offloading to contractors works for which they are themselves
responsible with the result that what is produced is more
costly and often, in my personal experience, less than adequate
to the task.
I am first going to talk about manpower efficiencies and
then talk to some training and education issues and the issue
of staff augmentation. GAO [Government Accountability Office],
in December 2015, reporting on just the acquisition workforce,
said that the Department had yet to identify and certainly not
address all the gaps in civilian skills, and I am quoting here,
``that are essential for effective human capital management.''
At the time of the report, DOD had not an updated its
acquisition workforce plan, and at that time, it appeared that
DOD had not established time frames for addressing these
concerns, all of which go to the heart of workforce efficiency.
Not clear to me how much progress has been made in the past
year.
Then in October of 2016--in other words, 6 months ago--GAO
addressed the entire workforce, and it said that DOD had ``not
developed and implemented an efficiencies plan for reducing
civilian and contracted services workforces.'' In fact, DOD,
according to GAO, seemed to be circumventing the intention of
Section 955 of the 2013 NDAA, which called for this kind of a
plan to cover fiscal years 2012-2017.
Section 955 allowed DOD to exclude required reductions that
it identified as critical, and the Department--and this is not
the first time I have seen this happen in my career--excluded
538,000 out of the 776,000 civilians, which meant, of course,
that you really were not going to be dealing with the entire
civilian workforce. DOD has not really challenged GAO's
findings or the assumption that the civilian workforce could be
more efficient.
In fact, in his memo of February 17th of this year,
Secretary of Defense Mattis explicitly called for, and I am
quoting, ``making our business operations more efficient and
freeing up funds for higher priority programs.'' So what I am
saying is not original at all.
Moreover, and here he was incorporating a taxonomy that the
Defense Business Board highlighted in its own January 2015
examination of DOD efficiencies, the Secretary called for
``exploring efficiencies with respect to human resource
management.'' The board specifically identified civilian
personnel as a major target of opportunity for efficiencies in
the human resources realm.
The board pointed out that annual savings from what it
termed ``optimizing the Government labor footprint'' could
amount to anywhere from 8 to 13 percent of total back office
costs. Allowing for the fact that 60 percent of that force is
civilian, we are talking about $5 billion to $8 billion in the
fiscal 2017 budget alone.
Part of the reason that the workforce is not as efficient
as it could be is lack of training and education that it needs
to keep pace with new development in technology, in cyber, and
in human resource management itself. DOD civilians can take
courses in everything from auditing to contracts management to
test and evaluation and cost estimation. But many or most of
these course are taught via distance learning, which does not
necessarily ensure that students will absorb or retain what
they have been taught.
They take these courses at the Defense Acquisition
University. All you have to do is go online and look at the
course offerings. It does not offer courses in human resource
management, which is key to ensuring that officials at every
level strive for efficiency on the part of their staffs, and
most of its courses are, in fact, distance learning courses.
Now the various better buying power of reforms that have
been promulgated in recent years, they have gone some distance
to remedying the paucity of training requirements for
acquisition officials, but there is some way to go. Human
resource training programs for civilian managers, which you
have just heard about, are much further behind.
There is no advanced education requirement for members of
the Senior Executive Service or people who want to be promoted
to the Senior Executive Service. DAU [Defense Acquisition
University] offers training. That is very different from
education. To be proficient in the management of human
resources or even to be an educated consumer of technology, you
need more than training.
The military has a system of professional military
education. You cannot move up unless you have taken, been at
staff college, been at National War College or one of the
service war colleges. Not the case for civilians. There is no
civilian equivalent.
I would recommend that no civilian be promoted to the SES,
the Senior Executive Service, without getting a year of
appropriate education at one of the Nation's top business
schools or at a top institute of technology. There has never
been such a requirement imposed by the Department nor by OPM.
It looks like legislation would be the only way to ensure
that our top civil servants and those aspiring to make it to
the top will both get the education and the training they need
to carry out their tasks most efficiently.
Now in addition to changes in the way the civil servants
are trained and educated for their jobs, there is an urgent
need to alter the culture that seems to govern their behavior.
Again, I am speaking from eyewitness experience.
Too often DOD civilians rely all too heavily on contractors
for work that they should undertake themselves. It was for good
reason that Secretary Gates sought to reduce the level of staff
augmentees. The work should be done by the civil servants.
One way to change the situation would be to prohibit
anybody from retiring from the military, as well as any
retiring DOD civilian, from serving in a staff augmentation
position for 5 years after retirement. Too many folks flip
their badges. Friday, they are a Government official or a
military person. Monday, they are working for a contractor back
at the same job, back with the same colleagues. Now, come on.
Given the cost of DOD's civilian workforce and its
acknowledged lack of efficiency--again, it is not me, Secretary
of Defense--it might have been expected that the proposed
fiscal 2018 budget as well as the 2017 budget amendment would
call for a reduction in civilian end strength. But even though
the Trump administration is proposing cuts to the Federal
civilian workforce, it has not identified any reductions in the
DOD workforce, not the $54 billion increase in 2018 or the $25
billion amendment for 2017.
It is true that there is a hiring freeze and, combined with
anticipated retirements, there could be some reduction in
civilian levels. But the proposed increases in 2018 could well
result in a higher civilian force should the freeze be lifted.
Even if the freeze is not lifted, civilian personnel levels may
not or probably will not decline significantly.
The only way to do it is through a targeted effort, and
that is something that Congressman Ken Calvert has proposed in
his REDUCE Act, which stands for--it is a heck of an acronym--
Rebalance for Effective Defense Uniformed and Civilian
Employees Act. He has been proposing it for the last several
years because what it would do is limit full-time positions in
DOD in each year of fiscal years 2024 to 2028 to a number of
not greater than 85 percent of the number of such positions as
of September 30th of 2018.
To begin the process, the bill would authorize the
Secretary to offer separation incentive early retirement
payments to civilian employees. But if he does not hit the
right number, he can reduce force and reduce personnel
involuntarily. The act would also cap Senior Executive Service
at 1,000 personnel.
Now, not surprisingly, this bill has been opposed bitterly
by the Civil Service unions that represent DOD civilians. The
unions have been a major stumbling block in the way of Civil
Service reform. They want to see no changes in the 1978 Civil
Service Reform Act, which, among other things, enabled civil
servants to unionize.
So when the Secretary of Defense, my former boss, Secretary
Rumsfeld, sought to initiate a merit-based system for
evaluating and promoting civilian personnel, which my colleague
Peter Levine mentioned in passing reference, and that would
have clearly led to more civilian efficiency because it was
merit based, he was met with a boatload of criticism and
lawsuits filed by the unions, and he had to drop the proposal.
It should be noted, however, that the very same act allows
the President to exempt groups in the name of national
security. The armed services, employees of CIA, and the FBI are
already exempted. So, in theory, the Trump administration
could--the Secretary of Defense could exempt civil servants in
the Department of Defense from unionizing. That would free up a
lot of the kinds of recommendations that you have heard from my
colleagues here on the panel and several that I have talked
about.
DOD relies heavily on its civilian personnel. They are
integral to the Nation's ability to fight and win its wars. To
that end, it is critical that we ensure that the DOD's civilian
corps operates in the most efficient manner possible, and it is
an urgent requirement if DOD is successfully to confront and
overcome the challenges that are constantly emerging in today's
international security environment.
Thank you for your patience in listening to me. I would be
delighted to answer your questions as best I can.
[The prepared statement of Dr. Zakheim follows:]
Prepared Statement by Dov S. Zakheim
Chairman Tillis, Ranking Member Gillibrand, Members of the
Committee, I appreciate your giving me the opportunity to testify on
the critical issue of DOD civilian personnel reform. DOD civilian
personnel currently account for approximately 36 percent. of all full-
time DOD personnel, including full-time National Guard and Reserves. In
the past fifteen years, DOD has added 77,000 more civilians,
representing an 11.5 percent jump in the civilian workforce since
fiscal year 2002. During the same period military end strength declined
by 8 percent., or 120,000 personnel.
Over that same fifteen year period, civilian pay increased by a
very healthy 31 percent. Most of that increase went to General Schedule
white collar workers, who account for two-thirds of all DOD civilian
employees. On the other hand, blue-collar Wage Board pay actually
declined by about 5.5 percent. At the same time, total military pay for
all Active personnel, including full-time National Guard and Reserves,
rose by a mere 0.2 percent.
Of course, the decline in military end strength means that on a
per-capita basis, military pay increased markedly since 2002, and
indeed, military pay increases have either equaled or exceeded civilian
pay increases ever since. Nevertheless, with civilian pay consuming a
significant portion of the budget, and in light of the need to bolster
other elements of the defense enterprise, whether to increase Active
Duty end-strength, or to enhance readiness, or to provide more funding
to meet acquisition needs, it is important to examine whether the
productivity of the civilian workforce justifies the resources it has
consumed over the last decade and a half.
Members of the subcommittee, the answer is clear: DOD has
benefitted from precious few gains in efficiency even as the workforce
has grown so markedly. Moreover, it is not at all evident that the
civilian workforce is properly trained to deal with the speed of
changes in technology given Moore's Law, which posits that the power of
computer central processing units, or CPUs, doubles every two years. In
other words, it is highly questionable whether Defense civilians are
making the most of Information Technology systems available to them,
operating at the cutting edge of cyber technology, or acting as an
educated consumer when procuring the vast range of high technology
systems that combine with our military personnel to comprise the
lifeblood of America's fighting power.
Finally, the availability of contractors to carry out many of the
same missions as the civilian staff--politely termed staff
augmentation-- has often resulted in civilians offloading to
contractors work for which they are themselves responsible, with the
result that what is produced is more costly and often, in my
experience, less than adequate for the task at hand. It is not without
good reason that former Secretary of Defense Bob Gates targeted staff
augmentation as an area that deserved both greater scrutiny and urgent
reform.
I will first address the question civilian manpower efficiency and
then turn to some training and education issues and to the matter of
staff augmentation. Numerous reports by the Government Accountability
Office, most recently those of December 2015, \1\ which addressed the
acquisition workforce, and of October 2016, \2\ which called for
efficiencies in both the civilian and contractor workforces, underscore
the judgment that the efficiency of the civilian defense workforce
leaves much to be desired. The GAO's 2015 report on the acquisition
workforce noted that DOD had yet to identify, much less address, all
gaps in civilian skills that, it stated, ``are essential for effective
human capital management.'' Nor, as of the time of the report, had DOD
updated its acquisition workforce plan. It noted that 26 percent. of
all acquisition-related hirings were not in line with DOD's own stated
priority career fields. Most troubling, it appeared that DOD had not
established time frames for addressing these concerns, all of which go
to the heart of workforce efficiency.
---------------------------------------------------------------------------
\1\ Government Accountability Office, Defense Acquisition
Workforce: Actions Needs to Guide Planning efforts and Improve
Workforce Capability (GAO-16-80: December 2015) http://www.gao.gov/
assets/680/674152.pdf
\2\ DOD Civilian and Contractor Workforces: Additional Costs
Savings Data and Efficiencies Plan Are Needed (GAO-17-128: October
2106) http://www.gao.gov/assets/690/680415.pdf
---------------------------------------------------------------------------
The October 2016 report, which, as noted, addressed the entire
civilian DOD workforce, not just its acquisition component, pointed out
that DOD had ``not developed and implemented an efficiencies plan for
reducing the civilian and contracted services workforces.'' Indeed, DOD
seemed to be circumventing the intent of Section 955 of the FY 2013
National Defense Authorization Act, which called for such an
efficiencies plan to cover the period fiscal years 2012-217. Section
955 allowed DOD to exclude required reductions that it identified as
critical, and the Department excluded 538,000 of its 776,000 personnel!
DOD itself has not challenged GAO's findings, nor the general
assumption that the civilian workforce could be far more efficient than
is currently the case. Indeed, in his memo of February 17th of this
year, Secretary of Defense Mattis explicitly called for ``making our
business operations more efficient and freeing up funds for higher
priority programs.'' \3\ Moreover, incorporating a taxonomy that the
Defense Business Board highlighted in its own January 2015 examination
of DOD efficiencies, Secretary Mattis called for ``exploring
efficiencies [with respect to] human resource management.''
Significantly, the DBB identified civilian personnel as a major, if not
the major, target of opportunity for efficiencies in the human
resources realm. The Business Board noted that annual savings from what
it termed ``Optimizing the Government Labor Footprint'' could amount to
anywhere from eight to thirteen percent. of civilian personnel costs,
or anywhere from five to eight billion dollars in the fiscal year 2017
budget alone.
---------------------------------------------------------------------------
\3\ James Mattis, ``Memorandum for Deputy Secretary of Defense:
Establishment of Cross-Functional Teams to Address Improved Mission
Effectiveness and Efficiencies in the DOD,'' (February 17, 2017), p.1.
---------------------------------------------------------------------------
Part of the reason for the civilian workforce's inefficiency is its
lack of the training and education required for it to keep pace with
new developments in technology, including cyber, and indeed, in human
resource management as well. DOD civilians can take courses in the
Defense Acquisition University (DAU) in everything from auditing, to
contracts management, to test and evaluation and cost estimation. \4\
But many, if not most, of these courses are taught via distance
learning, which do not necessarily ensure that students will absorb or
retain what they have been taught. Moreover, DAU does not offer courses
in human resource management, which is the key to ensuring that
officials at every level strive for efficiency on the part of their
staffs. The various Better Buying Power reforms promulgated in the past
few years have gone some way to remedying the paucity of training
requirements for acquisition officials, but there is still some way to
go, while human resource training programs for DOD civilian managers
are even further behind.
---------------------------------------------------------------------------
\4\ The DAU course catalog can be accessed at http://
icatalog.dau.mil/onlinecatalog/tabnav.aspx.
---------------------------------------------------------------------------
Finally, there is no advanced education requirement for members of
the Senior Executive Service, or those seeking promotion to the Senior
Executive Service. DAU offers training, not education. Yet to be
proficient in the management of human resources, or indeed, to be an
educated consumer of technology, more than training is required. The
military has its system of professional military education; there is no
such equivalent for civilians. A civilian with a Masters' Degree can
serve forty years in the Defense Department without ever taking another
graduate level course throughout his or her career. Such a situation is
unacceptable. Specifically, no civilian should be promoted to the
Senior Executive Service without receiving a year of appropriate
education at either one of the Nation's top business schools, such as
Harvard, Stanford, Chicago or Rice, or at a top institute of technology
such as MIT, RPI, Cal Tech or Georgia Tech. The Department has never
imposed such a requirement, nor has the Office of Personnel Management.
Officials do take a year off to attend graduate programs, such as that
at Harvard's Kennedy School, which is tailored for senior government
executives. Still, participation in these programs is voluntary, and
many executives are reluctant to spend a year away from their place of
work; or, their superiors are reluctant to lose them for a year.
Legislation appears to be the only way to ensure that our top civil
servants, and those aspiring to the make it to the top, will get both
the education and the training that they need to carry out their tasks
in a most efficient manner.
In addition to changes in the way civil servants are trained and
educated for their jobs, there is an urgent need to alter the culture
that seems to govern their behavior. Too often, DOD civilians rely all
too heavily on contractors for work that they should undertake
themselves. For example, many reports to the Congress actually are
prepared by contractors, often ``staff augmentees'' who retired from
the military or the civil service only to return to virtually identical
jobs in the same office, with the same colleagues, but now are wearing
a contractor badge. Yet the reports these contractors produce are often
poorly written and formulated; it is questionable whether civilian DOD
staffs carefully review what has been produced before forwarding the
reports up their command chain. It was for good reason, as I mentioned
earlier, that Secretary Gates sought to reduce the level of staff
augmentees; the work should be done by civil servants themselves. One
way to help change what might be termed a poisonous symbiosis of DOD
civilians and contractors would be to prohibit anyone retiring from the
military, as well as any retiring DOD civilian, from serving in a staff
augmentation position for five years after retirement. DOD staff would
then either take on the work themselves, or, if they feel uneasy about
their workload, find jobs elsewhere.
Given the cost of DOD's civilian workforce and its acknowledged
lack of efficiency, it might have been expected that the proposed
fiscal year 2018 defense budget as well as the fiscal year 2017 budget
amendment would call for a reduction in its end strength. Ironically,
however, even as the Trump Administration is proposing cuts to the
total Federal civilian workforce, it has not identified any such
reductions in the Department of Defense. Neither the proposed $52
billion increase for fiscal year 2018, as well as the $25 Billion
budget amendment for fiscal year 2017 reveals any indication that
Administration plans to reduce DOD civilian personnel levels. It is
true that the current hiring freeze, combined with anticipated
retirements, should result in some reduction in current civilian
levels. \5\ On the other hand, the proposed increases for fiscal year
2018, could well result in a higher civilian force level should the
freeze be lifted.
---------------------------------------------------------------------------
\5\ James Mattis, ``Memorandum for Secretaries of the Military
Departments, et. al.: Implementation of Civilian Workforce Hiring
Freeze,'' (February 1, 2017), https://www.defense.gov/Portals/1/
Documents/pubs/OSD000999-17-RES-Final.pdf.
---------------------------------------------------------------------------
Even if the freeze remains in place, civilian personnel levels are
unlikely to decline significantly. Only a major targeted effort will
result in lowering those levels. Such an effort is encapsulated in the
Rebalance for an Effective Defense Uniformed and Civilian Employees
Act, commonly known as the R.E.D.U.C.E Act. This bill, which
Congressman Ken Calvert first proposed in January 2015 and has
subsequently proposed each year since, would, in its current form,
limit full-time positions in the Department of Defense, in each year of
fiscal years 2024 to 2028, to a number not greater than 85 percent. of
the number of such positions at DOD as of September 30, 2018. To begin
the process, the bill would authorize the Secretary to offer separation
incentive early retirement payments to civilian employees. Most
importantly, it also requires the Secretary to use involuntary
measures, such as reductions in force, beginning on October 1, 2018,
``to achieve required reductions in personnel levels if voluntary
measures are inadequate.'' \6\ The Act would also cap the Senior
Executive Service at 1000 personnel.
---------------------------------------------------------------------------
\6\ https://www.congress.gov/bill/114th-congress/house-bill/340.
---------------------------------------------------------------------------
Needless to say, this bill has been strenuously opposed by the
civil service unions that represent DOD civilians. The unions have been
a major stumbling block in the way of civil service reform; they wish
to see no changes to the 1978 Civil Service Reform Act (CSRA), which,
among other things, enabled civil servants to unionize. Thus, when
Secretary of Defense Rumsfeld sought to initiate a merit-based system
for evaluating and promoting civilian personnel, which would clearly
have led to an improvement in civilian efficiency, he was met with a
torrent of criticism and lawsuits filed by the unions and eventually
dropped the proposal.
It should be noted, however, that the CSRA also allowed the
president to exempt groups in the name of national security. \7\
Indeed, the armed services, employees of the CIA and the FBI already
are exempted. Should the Trump Administration exempt DOD civilians, it
would clear the way for both reducing the level of DOD civilians and
implementing reforms along the lines that Secretary Rumsfeld proposed.
Should the Administration not act to exempt civilians from the CSRA's
provisions regarding unionization, and even if it does act, the
Congress should consider passing the R.E.D.U.C.E. Act. This Act not
only would act as a catalyst for a far more efficient and effective
civilian DOD corps, but also which result in significant savings that
could be redirected to other urgent defense needs. that continue to
emerge in today's increasingly uncertain international security
environment.
---------------------------------------------------------------------------
\7\ ``(2) The President may issue an order suspending any provision
of this chapter with respect to any agency, installation, or activity
located outside the 50 States and the District of Columbia, if the
President determines that the suspension is necessary in the interest
of national security.'' PUBLIC LAW 95-454--OCT. 13, 1978 https://
www.govtrack.us/congress/bills/95/s2640/text/en.
---------------------------------------------------------------------------
The Department of Defense relies heavily on its civilian personnel;
they are integral to the Nation's ability to fight and win its wars. To
that end, ensuring that the DOD civilian corps operates in the most
efficient manner possible is a critical and urgent requirement if DOD
is successfully to confront and overcome the challenges that are
continually emerging in today's increasingly uncertain international
security environment.
Thank you.
Senator Tillis. Thank you.
You know, one of the big surprises to me when I came into
the Senate 2 years ago was how you form your office. I just
naturally assumed there were all kinds of personnel
requirements and structures, and they basically say your State
is this big. You have this allocation. Best of luck.
Which was great because we were able to treat it like a
small business and create personnel practices. I immediately
went back to the work that I had done when I was doing
recruiting and retention work at Pricewaterhouse, and we
adopted a very similar model within my office.
Every staff has a professional development plan. Every
staff has a knowledge and skills inventory at the beginning of
the year. We have very specific expectations for continuing
education. There is a place for online education, but there is
also a place for hands-on applied education.
We have made that every staff in our office at every level
has these plans, and they are expected to perform and develop a
knowledge and skills that shows growth over time. I do not
think any employee, and I believe it may have been Mr. Levine
that talked about how sometimes there is no, you know, direct
obvious attainment of knowledge and skills from year to year. I
think that that is a problem because you are not adding value.
If you are not adding any additional value other than what
you got paid for the year before, why should you expect to get
anything more over the cost of living? That mentality does not
seem to exist anywhere in the Federal Government.
We also at Pricewaterhouse had an 18 percent attrition
rate. A lot of people say, oh, my goodness. We thought that was
healthy, somewhere between 15 and 18. I do not know what it is
today. About half or two-thirds of those were people who
consulting was not for them.
That is when working at home happened on Saturdays and
Sundays and when there was not such a thing as mobile
commuting. Hopefully--or happily, we have gotten past that, but
it was a tough job, and we expected people to move on.
But we also counseled out 5 to 8 percent a year. They were
brilliant people. We recruited them from the best schools, and
they all had GPAs [Grade Point Averages] of 3.5 or higher. But
it was a tough job, and they just did not demonstrate the value
that made sense for the firm.
So is there any evidence of that happening anywhere in the
DOD? Is there any best practice or an area out there that we
should be looking at?
Dr. Junor. Well, I am currently at NDU [National Defense
University], and I am--like I said, I am filling a Title X term
position. When I was at P&R, I also oversaw, as did Peter, the
Defense Language Institute, which is also run by--for title X.
The advantage--so I am not a ``one size fits all'' proponent
either. But the advantage of this authority is that you are
hired with a--for a very specific job, and you can ask for very
specific attributes to meet that job, which is surprisingly not
common, and that goes to the classification authority that
Peter was alluding to earlier.
But when you are hired, in my case, we are hired on average
for a 3-year term, I know every 3 years, I have got to come to
a table, and I am going to be held accountable for whether I
have met my performance objectives. If my term runs out, this
is not something I can dispute. It is done. So I can be not
renewed either because I failed to meet performance objective
or because the needs of my employer change.
Senator Tillis. Now let me talk about--let talk me talk
about performance objectives, and reading the background
material, it seems like do have the situation where you may be
working for somebody who works for the DOD. They move to
different assignments, and sometimes there seems to be a lack
of real interaction between the supervisor and the employee
with respect to the development of their knowledge and skills
and really preparing maybe for the next opportunity.
Do we have a problem there any of you would want to talk
about? Mr. Levine?
Mr. Levine. Sure, let me address that one. I think we have
a problem with the systematic development of careers for
civilian employees. We have a systematic focus on military
careers, and we know what education blocks and what training
blocks and what are expected and what those are building to.
There is nothing comparable for civilian employees. So when
civilian employees have the kind of training that Dov talked
about, they have training opportunities, but those training
opportunities may be handed out as a plum to somebody who has
done well. They may also be handed out to somebody who is not
very good that you just want to get out of your organization.
Either way, there is not a whole lot of conscious thought
what is that building to, what is the next step, and how are we
going to utilize and take advantage of that training? So that
kind of planning is something that the Department has been
short on, and really, it is not easy to address, but needs to
be addressed.
Senator Tillis. Well, thank you.
Consistent with my policy of rodeo rules, I do not want to
go 8 seconds over. So I am going to go to Senator Gillibrand,
and then after we go through a round, if you all are okay, we
will just open it up to questions if we have them.
Dr. Zakheim. Mr. Chairman?
Senator Tillis. We will just do it openly.
Dr. Zakheim. Mr. Chairman, could I just add, if I may?
Senator Tillis. Yes.
Dr. Zakheim. Peter actually pretty much said what I wanted
to say, but I want to add one other thing. I am familiar with
at least one case of somebody who was clearly looking to get
out of--had enough years to get a pension and needed something
more to be able to get a good job on the outside. So that
person went to his supervisor and got to the Kennedy School.
That is not what you want.
It seems to me that unless----
Senator Tillis. Dr. Zakheim, we will come back to that in
my follow-up.
Dr. Zakheim. Okay. Good.
Senator Tillis. Thank you.
Senator Gillibrand?
Senator Gillibrand. Thank you, Mr. Chairman.
I want to talk a little bit about cyber. Growing the cyber
workforce has been a subject of intense interest on this
committee, including determining the proper mix of Active Duty
and Reserve component, including National Guard and civilian
personnel. 2016 and 2017 defense bills included additional
authorities for the Department to hire cyber civilian
employees, including direct hire and special pay authorities.
What are your views on these provisions and how the
Department is or is not using them? What else would you
recommend with respect to hiring and retraining--excuse me,
hiring and retaining civilians with critical cyber and computer
skills, including those who are members of the Reserve
components? How best can we utilize those talents, and is there
more we could be doing with universities to increase
recruitment in this area?
Dr. Junor. Mr. Chair----
Mr. Levine. Well, the answer is----
Senator Gillibrand. Can I ask Ms. Junor to do the first?
Thank you.
Mr. Levine. Oh, I am sorry.
Dr. Junor. That is fine. Getting the right balance of the
cyber workforce is a--it is an absolutely huge issue. Like the
three components or four components that you just labeled, each
has their own pros and cons. When I was--so I am a little--my
knowledge is a little bit dated. I have been out for over a
year now, but the Department struggled with, first, identifying
the appropriate mix and then determining exactly how to recruit
and retain and continue to grow those cyber professionals. That
work is ongoing.
Senator Gillibrand. Mr. Levine?
Mr. Levine. So, first of all, the authorities that you have
given the Department, I think, are very important ones. So you
did ask about that. This is another area where you have given
the Department flexible hiring authority and flexible pay
authorities, which I think for a high-tech workforce, in order
to compete with the private sector, those are very important.
I agree with Dr. Junor that we have not done what we need
to do yet in terms of figuring out the proper mix of the
workforce, but I think there is an underlying problem, which is
we have not figure out what we are doing in terms of cyber
strategy. Until we figure out our cyber strategy it is hard to
figure out what the workforce is you need to meet that
strategy.
Senator Gillibrand. Dr. Zakheim?
Dr. Zakheim. It is Zakheim, by the way. I would only add
that at the service level, they know they have the need and
they are boxed in by the categories they have for taking people
on. In particular, they could do very well hiring Reservists
or, rather, taking in Reservists who have that background, but
the system for taking in Reserves does not necessarily fit.
So individual commanders decide whether they will kind of
bend the rules a little bit. They need some more guidance and
help because they know what they want, and as Reservists, they
have got people to do it. But you will get people in the Navy
who are basically working in the bilge or something and
actually are CEOs [Chief Executive Officer] of high-tech
companies.
Senator Gillibrand. Separate topic. Civilian hiring
authority for healthcare providers. The military is having
difficulty hiring and retaining civilian healthcare workers in
critically needed healthcare occupations, such as behavioral
health, family medicine, pharmacy, and physical and
occupational therapy.
In a report issued in February of this year, DOD reported
that despite the use of special salary rates and hiring
flexibilities authorized by Congress, current and projected
difficulties relate to competition from the private sector and
supply shortages. Interestingly, the report does not recommend
to request new and enhanced hiring authorities or additional
compensation authorities.
Does the Department need enhanced civilian hiring
authorities and/or authority for additional compensation in
order to address these shortages for healthcare providers? If
so, what do you recommend? Dr. Junor?
Dr. Junor. I am not exactly sure what--I would have to--I
am an economist. I would have to look at exactly what the
mismatch is in that labor pool. I think all the authorities
that you could provide would be helpful. For example, the--if
it is a pay disparity, the pay you get on the outside has a
much higher potential than it would with our limitations within
the Civil Service. That is clear.
I also, though, worry, and this goes back to the how we
cast our civilian workforce, and I have been worried writ large
about the ability to hire especially in areas where there is a
lot of competition from the civilian side. If the background
vocal continues to be that the civilian workforce is more of a
plague than an asset, then I think this is going to be an issue
with cyber, with health, with any technical skill set.
So, yes, increasing authorities would definitely help, but
along with finding a way to better manage this workforce and
talk about it.
Senator Gillibrand. Mr. Levine?
Mr. Levine. So, first, with regard to competing on salary,
we cannot compete on salary with Federal employees. You will
not give enough for some of these specialized professions. You
will not give enough salary authority or allow us to pay high
enough, and so we then have to look at a contract model in some
cases.
But I would agree with Dr. Junor that our biggest
competitive advantage in hiring and retaining people is the
mission and the feeling of people that they have an opportunity
to contribute and contribute to something greater than
themselves that they are involved in public service. When we
undermine that by the way we talk about civil servants, we
undermine our ability to attract and retain really highly
qualified people that we need.
Senator Tillis. Senator Ernst?
Senator Ernst. Thank you, everyone, for joining us today.
I am going to continue along those same lines and not just
cyber or healthcare industry. Dr. Junor, you talked about a lot
of other fields as well, but when we are looking at those that
are in the STEM [science, technology, engineering, and
mathematics] fields, or the science, technology, engineering,
and math, recruiting there can be really challenging, and I
have seen a lot of the benefits coming from STEM even in my
home State of Iowa, who does tend to be on a leading edge with
STEM education.
What incentive systems exist out there, or are there any,
where we can recruit the best and the brightest of those young
people that are engaging in STEM fields? Is there something
that exists out there that we are not aware of, and if it does
not exist, is there something that we should look at?
If we could start with you, Dr. Junor?
Dr. Junor. Peter referenced the direct hiring authorities
for the recent graduates. I think that is a very big deal. If
you can--if you can get these folks in right after they have
learned the skill set, number one, they are bringing in current
thinking that is technologically relevant. This is an aging
workforce. So that is helpful.
But also if we can get them in and retain them and attract
them and get them hooked on our mission, which is actually a
pretty cool way to spend your career, that is an absolute plus.
Senator Ernst. Very good. Mr. Levine?
Mr. Levine. What I would add to that is that you need to
think about the work that you are giving people when you are
bringing them. So if you are going to try to attract and retain
highly skilled workers, you bring in these young people, you do
not want to plug them in so they are another widget in a giant
system. You want to give them the ability to be creative and
feel like they are really contributing.
I think the IT [Information Technology] area is a place
where we can do that because we are challenged in IT in every
way, and we can use these teams that sort of stand outside the
system and try to reinvent the way we work. But you need to
think about that and recognize that the only way you are going
to attract and retain young people who--with these kind of
talents is if you challenge them and make them excited by the
work.
Senator Ernst. Very true. Dr. Zakheim?
Dr. Zakheim. There is a program that is not career but is
important called Highly Qualified Experts. We tend to think of
highly qualified experts as people in their fifties, whatever.
But when you are talking about IT and high tech, probably the
highly qualified experts are 25.
Senator Tillis. Or 19.
[Laughter.]
Dr. Zakheim. Well, that is true. I mean, my grandchildren
are clearly highly qualified experts. Bringing those kinds of
folks in under the program, expanding it, and then perhaps as
we--creating a vehicle for those that want to stay to be able
to stay because they are doing interesting work might be
another way to deal with this issue.
You find somebody who is 25, 30, whatever, who is doing
fantastic work. You bring them in as a highly qualified expert,
and then if they are good, it becomes a kind of, you know,
almost probationary-type effort, and then they stay and we will
benefit.
Senator Ernst. Very good. I know that we have the USAJOBS
hiring process that exists out there, and Dr. Zakheim is
laughing. Yes, we have experienced so many difficulties with
this system, and the length of time it takes to bring those
applicants into the system is horrendous. I have heard story
after story.
So the direct hiring process is one way that we could
mitigate that. Can you explain some of the problems that we are
having with USAJOBS, and then what is a better alternative?
Mr. Levine. So when you are trying to bring in a college--
somebody who is graduating from college, if you have to go
through the USAJOBS process, then you can go to the campus, but
you cannot offer them a job. You can say go ahead and apply.
There is this portal, and in 6 months or a year, it will kick
out or it will not kick out. You have got to apply job by job.
That is not the way anybody else recruits on campus, and we
cannot compete if we do that. We need to be able to go there
and say you are talented, we want you. We will find a place for
you, and here are the kinds of things we can do, and here are
the kinds of places we can put you. Yes, we are going to tell
you yes now, and we are going to figure out a way to make it
work.
Direct hiring enables us to do that. USAJOBS will never
enable us to do that.
Senator Ernst. Thank you.
Dr. Zakheim. It takes about 83 days now to hire somebody,
apparently. So it is about 3 months. But again, the manager is
not the one that actually gets into the hiring process until
very late in that process. That is because of HR getting into
it and the automated stuff that Peter spoke about so that if--
again, if you are looking for a job and you are good and other
people are offering you something, you are not going to have
the patience to wait around and see what happens.
Senator Ernst. They are going to snap you up before----
Dr. Zakheim. Yes.
Senator Ernst. Right. Certainly.
Dr. Junor. Eighty-three days is on the short end. I have
tried to hire and be hired on USAJOBS, and there is a lot of
things wrong with it. But the single most frustrating part to
me is how the work is classified.
If you get stuck in a rigid OPM ``this is how we have to
define the attributes for a job,'' it is lethal. I ended up--I
worked in OSD personnel and readiness, and I wanted to hire
somebody. I gave up. I was frustrated.
It took--we iterated for the better part of a year, and I
could not--I had some attributes that I wanted, and I could not
figure out how to jam them into the rigid boxes that OPM gave
me so that I was sure I was not going to come out with really
odd matchings that I had to contend with. In fact, that is what
happened, and that is why I ended up giving up.
If you are on the--trying to be noticed, if are trying to
get a job, these things are equally lethal. So the direct
hiring authority, being able to actually list, if you are an
employer, what you want in an employee and then allowing
employees to match to that, it is much better on both sides.
Senator Ernst. Very good. Thank you very much.
Thanks, Mr. Chairman.
Senator Tillis. Senator Warren?
Senator Warren. Thank you, Mr. Chairman.
In October, a gunman opened fire on American personnel
visiting an Army munitions supply point outside Kabul. Two
Americans were killed in the attack. One was Army sergeant
Douglas Riney. The other was Michael Sauro, a civilian employee
of the Department of the Army.
They may not wear the uniform, but civilian workers are an
essential part of our national defense effort. They care for
service members in military hospitals, as we were just
discussing. They service our most advanced aircraft. They keep
our military bases running.
Thousands of civilian from DOD, from State, from our
intelligence agencies have been deployed in Iraq and
Afghanistan over the last 15 years, serving right alongside
uniformed personnel. Some have been wounded. Some, as this
shows, have been killed. I mention this because I am not
convinced that we are treating these personnel with the respect
that they deserve.
Our civilian workforce has become accustomed to hiring
freezes, to furloughs, even a Government shutdown, and it is
getting worse. The new administration has issued yet another
hiring freeze that includes much of DOD, and the budget
released last week would require the largest cuts to the
Federal workforce post World War II.
So I just want to ask, Mr. Levine, what impact do actions
like the furloughs and the pay freezes have on the
effectiveness of the Defense Department's civilian workforce?
Mr. Levine. We have to worry about demoralizing the
civilian workforce. I think that the morale is still pretty
high because there is belief in the mission. But the more these
attacks accumulate, the more you have a problem, and you can
undermine the effectiveness of the workforce.
I agree with Dr. Zakheim and Dr. Junor that we have a
three-pillared workforce. It is not only the military, not only
the civilians, but also the contractors. It is important to
recognize that we rely on all of them. You start with you have
a job that gets done. Who is the right person to perform that?
One of the reasons that we have more civilians and fewer
military now, and it is you do these trade-offs. But we had an
effort over the years to say let us get our military more to
the pointy end of the spear. Let us get them out of doing the
back office stuff that they used to do, and as you do that,
somebody still has to do the work.
So you are relying on civilians to do all kinds of things
that the military cannot do their job without, but it is all
one workforce, and we need to--we need to treat them as one
workforce and respect them as one workforce.
Senator Warren. So let me go back to this point in terms
then of professional development that you raised earlier and
that we have talked some about here, and talk about the
disparity. We assume with contractors that they work on
professional development. That is part of their job.
Obviously, with the military, we have been very strong on
professional development. But on civilian employees of the
Government, we have not done the same, even though they have
positions of great responsibility.
So, for example, we will let people pause their military
career so they can go back to school and acquire more skills
that they will bring back to the jobs. We send them to schools.
We send them to professional development. We do not do the same
with civilian managers.
So let me ask you the question. Now I am going to assume
that we would benefit from a robust institutional process that
assures that civilians get more access. Why has it not
happened? Anyone want to weigh in on that?
Dr. Zakheim. I think--yes.
Senator Warren. I want to be careful about my time.
Dr. Zakheim. Sure. I think it has not happened in part
because, in that respect, civilians are taken for granted. In
part because the system is so rigid that you move up the scale
almost no matter what, as long as you have been around. If you
are alive, you are going to move up.
I think it is unfair to the civilians. It is not just
unfair to the Department or the taxpayer. It is unfair to them
because they need to get out there. I mean, look, if you get a
physics degree, say, a master's at the age of 23, and you do
not take another course for 40 years, I mean, how really can
you understand what the latest developments are when Moore's
law tells you every couple of years, you know, the computing
capability doubles?
Senator Warren. I hear----
Dr. Zakheim. We are doing them a disservice. I think this
needs to become, and that is why I have said, it needs to
become a requirement, particularly if you are joining the
Senior Executive Service. You want to be a top manager, you
better spend a year at Harvard or MIT or whatever.
Senator Warren. I hear your point. I just have a little bit
of time left.
Dr. Junor, could you just weigh in on this, please?
Dr. Junor. Yes, I think Dr. Zakheim nailed it. We have a
current system--sorry. We have a current system right now that
is completely focused on longevity. Everything is about
longevity, and so that is not going to breed the best
productivity out of our people when it comes to, you know,
hiring the young, eager, technically savvy workforce. If they
come into this kind of--that is lethal if they come into this
kind of environment.
So, in a sense, we are not even promoting mediocrity. We
are promoting sitting in a seat. People do not want that. Most
people love their job, and they want to be good at it. That is
one of the attributes of feeling good and having self-
confidence.
So if we built a system that rewarded and encouraged that
through things like learning, I think the civilians would be
better off, the Government would be better off. Turns out that
is a little bit hard, although there are tools out there where
we have seen this work.
Senator Warren. Thank you.
I appreciate this because it just seems to me we have got
to have both compensation structures and opportunity structures
that really help our civilian employees that recognize all they
have done, but also help them develop and be all they can be.
Thank you. Thank you, Mr. Chairman.
Senator Tillis. Thank you, Senator Warren.
You know, Senator Warren made some points that I think bear
repeating, and I--because my time was limited, I did not get to
it in the first discussion. But we do need to make it very
clear that they are a very important part of what we do.
I have been to several military installations. I have seen
helicopter maintainers, aircraft maintainers. They are in
there. They believe in the mission as much as anybody else in
the military. So they need to understand we understand the role
that they play, the force multiplier. If there is any doubt, at
least on my part, and I think I speak for the members here,
that they are important to us.
But what this is about is enriching their opportunity,
enriching them professionally, building their knowledge and
skills, and recognizing that in any group of employees, some
are higher performers than others. Do they satisfy minimum
requirements to keep them employed, or is there some point
where you need to counsel them out?
That is very difficult. We called it counseling out.
Divesting is an interesting one. I have used it more in my
financial business than I have with a human being. But I mean,
it is more a matter of creating a high-performing environment.
But you cannot create a high-performing environment--and to
Senator Ernst's point, STEM, I mean, we are all fighting for
STEM resources--public sector, private sector. The difference
is when I would go and recruit at Penn State or Cornell or
somebody, I saw somebody who was extraordinary, they could get
an offer right there. I had the authority to do it.
Bring them into training and get them deployed to an
engagement 6, 8 months, 9 months later after an extensive
training program. It is 120 days. I believe my staff in the
staff memo said the average is 120 days, and it can extend up
to 180 days.
You are not going to get a kid that graduated with a
physics degree or, you know, pick--an economics degree,
something like that from a top school with a high GPA [Grade
Point Average] and say we just need you to wait around 4 to 6
months, and maybe these five different jobs that you apply for,
one of them will pop up. So that is clearly an area that I
think that we need to drill down on.
The other thing I just wanted to ask, and Senator
Gillibrand, just jump in if you have any other questions. But I
know we have an internship program, and I was asking about that
at about the same time that Senator Ernst asked about the
USAJOBS system. But it seems like you could come in and have an
intern do great work, and you want to hire them. But there is
such a lapse between having that promising person who really
wants to go work and actually transition to a job.
That seems to be another area that we need to focus on.
Would you agree with that, Dr. Zakheim?
Dr. Zakheim. Absolutely. I had interns that were what in
those days called ``presidential management interns.'' I think
there is a slightly different name now. But you are hired as a
civil servant. So you come in.
By the way, the only reason I used 83 days is because that
is the lowest number I could find.
[Laughter.]
Dr. Zakheim. I do not disagree with you at all. But getting
an intern in the sense that you did or I did in the private
world just does not happen. So an internship program that then
allows you, as in the private sector, to move into the
Government, as opposed to being hired as a Government official
who is then an intern, I think that would be a tremendous step
forward.
Senator Tillis. Dr. Zakheim, you said something that I do
not think I really take exception to it, but--but as we are
looking at policies that once we pass something, it becomes
this rigid thing that people follow or have to follow. I am
thinking more in the cyber space or the technology space.
I understand at certain levels, there are requisite
requirements, particularly within the Comptroller's office.
Financial, education, those sorts of things are important. But
it also goes back to treating different jobs and different
skill sets differently. I could think about cyber as one
example.
I was actually recruited to Pricewaterhouse without a
college degree. When I started there in 1990 at 30 years old, I
did not have a college degree, and I was continuing my
education, but I happened to work in a technologies field that
was imaging and kind of artificial intelligence field that
there was not a lot of people doing that back then.
So we have got to make sure that when we look at getting
these top skills where clearly credentialed skills are
necessary for certain jobs that you would have performed, that
we have the flexibility to bring in top talent and not take a
Bill Gates, who did not get a college degree and not have him
come work in software development.
Dr. Zakheim. Well, let me----
Senator Tillis. Would you not agree?
Dr. Zakheim. Let me make myself clear. I am not--was not
talking about how we take them in. I think you are absolutely
right. I would have hired Bill Gates, and so you would, I
think, Senator.
But once they are in, you do not want them to just live off
their intellectual capital forever.
Senator Tillis. That is right.
Dr. Zakheim. That is really what I was focusing on.
Senator Tillis. Okay, very good. Mr. Levine?
Mr. Levine. Mr. Chairman, I think you are onto a point
there because as--as somebody who was a senior manager, I
wanted to be able to get the most talented, most capable person
for a position, and I resented where there was an artificial
constraint so I could only look at this subcategory.
So I would be careful. I think that authorizing somebody to
establish requirements, and a few years ago, we authorized the
Comptroller, for example, to require CPAs [Certified Public
Accountants] for certain positions. Authorizing that is a good
thing. Requiring it is another matter. Because if you require
it, then you say you are not allowed to have the choice to get
the person you think is best suited.
Senator Tillis. Thank you.
Senator Gillibrand?
Senator Gillibrand. No, I have no further questions. Thank
you so much for your testimony. It was excellent.
Senator Tillis. Well, I have got one or two others then.
Senator Gillibrand. Go ahead.
Senator Tillis. Then I can crawl off to Judiciary. But,
Senator Gillibrand, I know if you have other commitments,
certainly feel free to leave when you need to.
This needs to be a dialogue. There is a lot of things that
we will follow up, based on your statements.
But you know, I remember working for a Marine. He was an
Annapolis graduate. By the way, I did get my degree after I was
admitted to the partnership. But I did finish it off because I
told everybody I love public education so much I went to it for
17 years after graduating from high school.
But this partner, he was a Marine, and he had this way
about him that was truly what you would expect out of a Marine
coming out of the Naval Academy. He said I am going to treat
you all fairly, but I am not going to treat you equally.
There are certain things that we have to accomplish for our
clients, and there are certain skills that we need to bring,
which means that I necessarily have to differentiate based on
your knowledge, your skills, and the value that you are
producing.
We went to a point in the 1990s where we had what we called
``hot skills bonuses.'' That when there was a specific task
that required a unique skill. May not be something,
particularly in today's world because of the changing of
technology, last year's hot skill may or may not be next year's
hot skill.
What flexibility do we have or do we need to allow that
same sort of capability among our employee base?
Dr. Junor. I think this is the area that we need the most
work, frankly, and it is not a simple thing to fix. The flip
side of being part of a critical workforce like we have is
being accountable for your performance in that critical
workforce, and that is hard for a variety of reasons.
When you hold--and this is--accountability is part of this
issue. But focusing just on accountability, it is very
difficult to hold--and as I said in my testimony, to hold an
employee accountable for poor performance, for example. The
process is long and drawn out. Most supervisors just do not do
it for a variety of reasons.
A low performer is most likely to be given a middle grade
because it is easier. The--being rewarded--so the poor
performers gravitate toward some kind of middle score. We do
not have a lot of flexibility to reward the high performers. In
the Title V system, you cannot--you cannot promote them really
early.
Senator Tillis. Do we have any system of creating--it would
seem to me we have a large enough population to create cohorts
that we can force into a bell curve on performance. I mean, if
you look out at a lot of HR best practices, there is this
theory that any cohort will fit into one of three or four
categories--the top 15 percent performers, the 25 percent
exceeds expectations, 35 percent expectations, 15 percent need
to bump up or get out.
Do we have any examples of where we--where either the
organization has adopted these practices or been allowed to
adopt these sorts of practices among the civilian employees?
Mr. Levine. I would say that the entire culture of the
Department of Defense is contrary to that, and not only-- not
only with regard to civilians, but with regard to contractors.
It used to frustrate me no end that you would see contractors
who were clearly failing in their performance who would get 98
percent ratings on their past performance ratings.
It is the same thing on civilians. It is a--it is a
management culture which generally tries to avoid
confrontation, and avoiding confrontation means you do not
grade somebody at the bottom level.
Senator Tillis. What is the potential--what is the
potential risk of forcing a bell curve? In other words, you do
your individual evaluations, but they have to be--if I have a
supervisor of a group of people they have got to be forced into
a bell curve where you are having to do a comparative
assessment within a cohort, what are the potential challenges
for doing something like that?
Dr. Zakheim. Well, Secretary Rumsfeld actually tried that,
and he ran into, like I said, a buzz saw of union opposition.
Because what he tried to do is take the various GS [General
Schedule] levels and create much wider bans, which would then
allow for exactly what you are talking about. But he just could
not pull it off.
You also have another issue here that OPM is a major player
in this, and OPM's whole approach is kind of different. I
remember I was on one commission or another, I cannot remember
which, where we talked to OPM folks and discovered that I think
it was 90 percent of SESers were above average. Now that is
straight out of Lake Wobegon.
So you have got a fundamental problem with how people are
evaluated.
Senator Tillis. Yes. That is--Dr. Junor?
Dr. Junor. Yes, there is certainly nothing easy about this.
But I go back, if you have a small organization, then the bell
curve is really not going to work. Because if you have three
people, it is entirely possible that they are all superstars
based on the criteria that you used to pull them in.
Let me give you a counter thought. A counter thought would
be what if we could get rid of the incentives or the
restrictions that prevent managers from honestly assessing
their employees? What if we--what if we could find a way to
reduce the friction or compel managers to be held responsible
for the performance of their employees?
In other words, if your employees mess up a project, that
is now on your performance statement, right? You cannot do any
better than your worst employee kind of thinking. On the other
end, I mean, what if we could give GSers more of a bonus, spot
bonuses that reward? From what I have read about improving
employee performance, spot bonuses, rewards, especially
recognition for things well done right when it happens is
probably more impactful than waiting to the end of the year for
a bureaucratic assessment of what they have done.
Senator Tillis. Well, I could go on forever about this, and
actually, I want to. But I think that Senator Gillibrand and I
both intend to work on language that will move forward to the
full committee, and we would like your continued feedback.
Because, again, an environment where we really recognize role
model behavior and we put on performance plans those who need
to add value or counsel them, respectfully, into other careers
are things that we want to talk about.
I would also like to follow up on a comment, Dr. Zakheim,
that you made about somebody that rebadges. One day, they have
got one badge. The next day, they have got another badge.
Because I think that that is another area.
We saw that in the private sector. A lot of times we go in
and we would see problems with an IT shop. It is because they
were not really changing the mix, and they were just broadening
the base of problems, to be honest. Not in every case. Some
cases you want to retain those people, and it may be the only
way you can.
But you all have given us a lot of feedback in this brief
committee, and I hope that we can continue the dialogue with
myself, the ranking member, and our staff as we move forward
marking up language for consideration for the full committee.
Thank you all for being here.
I also want to move, without objection, that we include any
outside statements received in the official record for the
hearing. Without objection, so moved.
[The information referred to can be found in Appendix A.]
Senator Tillis. Thank you for being here this afternoon.
This meeting is adjourned.
[Whereupon, at 3:38 p.m., the hearing was adjourned.]
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Elizabeth Warren
professional development
1. Senator Warren. Dr. Junor, in the hearing you said ``We have a
current system right now that's completely focused on longevity.
Everything is about longevity. And so that is not going to breed the
best productivity out of our people. . . . Most people love their job,
and they want to be good at it. That's one of the attributes of feeling
good and having self-confidence. So if we build a system that rewarded
and encouraged that through things like learning, I think we--the
civilians would be better off. The government would be better off.
Turns out that's a little bit hard, although there are tools out there
where we've seen this work.'' Please provide additional detail on the
types of tools available and where you believe they have been used
successfully.
Dr. Junor. The most significant tool is the use of Title 10 hiring
authority for a defined term with organizational renewal authority and
specific performance objectives. Here's why that works:
It creates a clear understanding of what the organization
needs out of each employee
It creates an incentive to perform (or risk non-renewal)
It maintains quality peers (low-performers are less
likely to be renewed)
In summary, this type of hiring authority maintains a culture that
motivates individual and organizational improvement. This authority
works even better when an organization uses an annual oversight process
to review renewal decisions. Such a process would ensure that employees
are treated fairly and are given at least one year's notice in the
event they will not be renewed.
I believe professional development offered in this environment is
much more likely to be effective than in an environment that emphasizes
longevity. I have seen this authority work well at National Defense
University (where I am currently employed) and at the Defense Language
Institute.
APPENDIX A
Prepared Statement by J. David Cox, Sr., National President, American
Federation of Government Employees, AFL-CIO
On behalf of the almost 700,000 federal and District of Columbia
employees, including 270,000 in the Department of Defense (DOD), who
are represented by the American Federation of Government Employees,
AFL-CIO (AFGE), thank you for the opportunity to submit this Statement
for the Record on DOD Civilian Personnel Reform. Our members'
experience and dedication ensures reliable and cost-efficient support
for our nation's war-fighters--from maintaining weapons to overseeing
contractors to guarding installations.
AFGE has had numerous occasions to study and testify on proposed
changes to the DOD civilian personnel system. We are all too familiar
with various efforts within the Defense establishment to further the
agenda of placing all DOD civilian personnel within a title 10
framework, and removing the Office of Personnel Management (OPM) from
any meaningful role with respect to DOD civilian personnel. AFGE
opposes these efforts. Neither DOD nor any defense ``studies'' have
made a coherent case for shifting civilian employees from civil service
coverage under the well-developed framework of title 5 to a DOD driven
title 10 system that shortchanges the pay and rights of federal
workers.
the threat to revive the discredited nsps: performance pay and force of
the future
The Federal Government's disastrous experience with the National
Security Personnel System (NSPS) in the Department of Defense during
the George W. Bush administration is a cautionary tale on the dangers
of abandoning an objective ``rank-inposition'' system like the General
Schedule for federal agencies. From 2006 to 2009, 225,000 civilian
workers in DOD were subject to a system that based salaries and annual
salary adjustments on supervisors' assessments of employee performance.
NSPS also granted managers tremendous ``flexibility'' on classification
of jobs, hiring, assignments, promotion, tenure, and ``performance
management.'' The system's only additional funding relative to the
General Schedule payroll base was for outside consultants who had a
large role in designing, implementing, and training DOD managers in
their new system.
It was not surprising that even in its brief three-year reign, NSPS
damaged the Federal Government's excellent record of internal equity on
race and gender. Data on salaries, performance ratings, and bonuses
showed marked advantages to being white and male, and working in close
geographic proximity to the Pentagon. Those in the Office of the
Secretary of Defense, the Defense Finance and Accounting Service and
Tricare were found to be higher performers, on average, than civilian
employees in the Departments of the Army, Navy or Air Force.
NSPS was a system conceived in a highly politicized context. The
Department of Homeland Security (DHS) had been established two years
earlier, in 2002, and its secretary was granted broad personnel
authorities, construed by the agency to include the right to
unilaterally abrogate provisions of collective bargaining agreements
and replace them with agency directives. The rationale for DHS' grant
of authority to create a new pay and personnel system was the war on
terror and the administration's belief that union rights and national
security were mutually exclusive. So in 2003, Defense Secretary
Rumsfeld used the same rationale to seek personnel authorities similar
to those granted to the Secretary of the Department of Homeland
Security.
In early 2016, the Defense Department began exploring NSPS 2.0
under the rubric of ``Force of the Future.'' Early drafts of the Force
of the Future proposals for civilians included the notion of moving
virtually all DOD civilians from title 5 to title 10. This was the
original plan for NSPS. Title 10 governs the Department's uniformed
personnel, but includes a few provisions for civilians in intelligence
and Defense universities. A move from title 5 to title 10 would
eliminate most civil service protections, and give the hiring authority
complete discretion to set and adjust pay. AFGE strongly opposes any
and all efforts to restore NSPS, whether under the guise of Force of
the Future or by any other name, including the just released report of
Bipartisan Policy Center. The flaws of that system were well-documented
and there is certainty that a revival would reproduce all the
discriminatory effects of its earlier incarnation.
DOD has often argued that it needs a more ``flexible'' personnel
system in order to manage its workforce than is contemplated or
permitted under title 5. However, if experience is any guide, DOD
rarely, if ever, simplifies much of anything, even when given broad
latitude by Congress. More recent examples include DOD's implementation
of the broad-banded Senior Executive Service pay system, or
implementation of the Defense Acquisition Workforce Improvement Act. In
each case, the Department developed and grew its own dedicated systems
that blunted any alleged flexibilities that were sought. The net effect
is an even more bureaucratic and internally rule driven process than
the old system that the putative ``flexibilities'' were designed to
replace.
At the Department of Homeland Security, AFGE preventing that
agency's proposed new personnel system, called MaxHR, from ever getting
off the ground, thanks to a lawsuit that successfully argued that its
undermining of collective bargaining rights violated the law. But at
DOD, NSPS did move forward in part because its focus was not on
eliminating the union per se, but rather on creating a pay system that
allowed managers to reward themselves and their cronies, and punish
others. NSPS could only have continued if Congress had been indifferent
to its discriminatory outcomes. Fortunately, when faced with data that
showed NSPS gave systemic advantages to white employees and other
relatively powerful groups at the direct expense of other DOD
civilians, and that the venerated Merit System Principles had been
undermined, Congress voted to repeal the system in 2009.
But the architects of NSPS never gave up on the dream of a
subjective pay system for the Federal Government, one in which managers
can decide each employee's salary and whether and by how much that
salary will be adjusted each year. Prior to the 2016 iteration of Force
of the Future, the contractor Booz Allen Hamilton ($5.41 billion in
revenue in FY 2016, 98 percent of which is from the Federal Government)
endowed the publication of a report under the imprimatur of the
Partnership for Public Service.
The report trod the well-worn path of those seeking lucrative
contracts to revamp the federal personnel system. It employs many of
the hackneyed tropes that have become all too familiar among the
enemies of fair pay for federal employees: the General Schedule is
``stuck in the past,'' ``broken,'' ``rigid,'' and ``fragmented.'' It
conveniently neglects to acknowledge the fact that numerous
flexibilities and modernizations have been enacted over the past few
decades. In the 1990's, the General Schedule went from having one
nationwide annual cost-of-living adjustment to a city-by-city, labor
market-by-labor market cost-of-labor salary adjustment system. Special
rates were authorized as well. In the 2000's, Congress passed
legislation that introduced broad new hiring authorities, managerial
flexibilities in salary-setting, and a program for substantial bonuses
for recruitment, relocation, and retention. Congress enacted
legislation to allow student-loan repayment, new personnel system
demonstration projects, and phased retirement. The list of new
flexibilities is long, and in many cases, these new authorities have
improved the General Schedule. In any case, the list stands as a
refutation of the myth that the General Schedule is a relic, untouched
by modernity or that Congress has failed to address needed changes in
the civil service system for decades on end.
Congress has been careful, however, not to go so far as to
undermine the Merit System. Unlike a private firm, the Federal
Government is spending the public's money in ways that are meant to
promote the public interest. NSPS was an object lesson in what happens
when a Booz Allen Hamilton plan is implemented in a federal agency.
Despite good intentions, the Merit System Principles are undermined,
particularly the principles that promise ``equal pay for work of
substantially equal value,'' and that ``employees be protected against
arbitrary action, personal favoritism, or coercion for partisan
political purposes.'' Veterans Preference in hiring, retention and
promotions is also inevitably undermined. These are the lessons of
NSPS.
Now we see that what is old is new again under the title ``Building
a F.A.S.T. Force: A Flexible Personnel System for a Modern Military''
(hereinafter the ``FAST Report'') issued by the Bipartisan Policy
Center. While most of the FAST Report deals with military personnel
policy on which AFGE does not take a position, the sections addressing
civilian personnel policy look like they were cribbed from previous
reports and proposals, including last year's Force of the Future
proposal.
AFGE does not suggest that either the Partnership, the architects
of Force of the Future, or the FAST Report, advocate discrimination in
pay. They likely have good intentions. But we also know that the road
to hell is paved with good intentions, and federal employees have no
desire to revisit the hell of NSPS. To be clear: Force of the Future
and/or the FAST Report blueprint are not just cut from the same cloth
as NSPS, they are NSPS redux.
While NSPS and its would-be successors fail the internal equity
test, there is no question that when it comes to external equity,
Congress and the Clinton, Bush, and Obama administrations all failed to
perform their role. It is preposterous to blame the current system for
failing to produce external equity. External equity is a funding issue,
and the General Schedule cannot fund itself. It relies on budget
authority and appropriations. To pretend that Congress would magically
provide billions more each year to fund a new civil service system
identical to one it repealed in 2009 on the grounds that it was
discriminatory is folly.
The cost of living has risen 10 percent from 2010 to the present.
So even before the salary reductions for new employees of 2.3 percent
and 3.6 percent (i.e., the increase in employee contributions to FERS),
the purchasing power of federal salaries had declined by 4.6 percent.
The degree to which they lag the market varies by city, but the
nationwide average is 34.92 percent according to the most recent
estimates from OPM, using data from BLS. That number includes current
locality payments which were frozen for five long years. https://
www.opm.qov/policy-data-oversiqht/payleave/pay-systems/qeneral-
schedule/pay-aqent-reports/2015report. pdf
inequality, the decline of the american middle class, and wages and
salaries of federal employees
The decline in living standards for America's middle class and the
ongoing misery of the poor have been much in the news recently. Even as
the rate of unemployment has dropped, wages continue to stagnate as do
household incomes. On one side are those who deny the numbers,
attribute changes in the distribution of income and wealth to changes
in educational attainment or willingness to exert effort. On another
side are those who recognize that the decline of unions, the rise of
outsourcing and global free trade agreements, and the deregulation of
the 1990s and other factors are better explanations. Median incomes for
middle class American families, adjusted for inflation, are lower than
they were in the 1970s and the very rich have benefited so
disproportionately from economic growth over the decades that America
is now more unequal than it was in the 1920s. Both middle incomes and
the incomes of the poor are now higher in several European countries
and Canada than they are in the U.S. After adjusting for inflation,
median per capita income in the U.S. has not improved at all since
2000.
Federal employees are typical middle class Americans. They work
hard and have historically received modest, but fair pay from their
employer. It has been recognized that the nation benefited from having
an apolitical civil service governed by the merit system principles.
The pay and benefits that derived from those principles were supposed
to be adequate to recruit and retain a high-quality workforce, capable
of carrying out important public sector functions, from law enforcement
to guaranteeing care for wounded warriors to protecting public health.
The government would not be a bottom-of-the-barrel employer, paying
the lowest possible wages and forgoing health care and retirement
benefits, like so many of today's most profitable corporations.
Likewise, the government would not be a place where anybody went to get
rich at taxpayer's expense (that role is assumed by government
contractors like Booz Allen Hamilton). The government as an employer
would be a model when it came to ideals of internal equity and non-
discrimination, promoting both fairness and seeking employees devoted
to the public interest. On pay and benefits, it would aim at
``comparability,'' defined in the pay law as no less than 95 percent of
what private and state and local government pays on a locality basis.
While some brave politicians have held fast to these principles
over the past several years when there has been immense political
pressure to reduce government spending no matter what, many more have
succumbed to the notion that America should reconcile itself to
declining living standards for all but the very rich. As such, they
supported the pay freeze, the 1 percent pay adjustments, the federal
retirement benefit cuts, which have cut purchasing power of some
federal paychecks by an additional 2.3 or 3.6 percent; and they have
supported the Budget Control Act's discretionary spending caps, which
have meant temporary layoffs and could mean permanent job loss for
thousands.
We recognize the politics behind the pressure to constantly reduce
federal spending. We understand the vast power of those who would
protect the low tax rates of the wealthy at any cost. Regardless of
one's position on austerity and sequestration, both Force of the Future
and FAST Report proposals deserve strong opposition because they
introduce subjectivity and politicization into federal pay, undermine
veterans' preference and violate the merit system principles. These
plans are also objectionable because they would reallocate salary
dollars away from the lower grades toward the top, increasing
inequality and decreasing opportunity for advancement. Even if the
direct attacks on federal employees' pensions were to stop and funding
for salaries were enhanced, it would be important to reject Force of
the Future and the FAST Report approach, because they quite explicitly
advocate greater inequality between the top and the bottom of the
federal pay scale.
The elitism of Force of the Future and the FAST Report is striking.
They ignore the Federal Government's hourly workforce altogether.
Apparently blue collar workers are so bereft of the qualities DOD and
its contractors want to reward in their pay schemes that they are not
worth notice. The implied segmentation of the General Schedule or
salaried workforce is also highly elitist. Employees in the lower
grades, like hourly workers, are excluded entirely, again because,
presumably, trying to measure their contribution to excellence would be
a pointless exercise. But excluding the lowest paid federal workers is
only one part of the inequality enhancement exercise that Force of the
Future and the FAST Report propose for DOD. Like their NSPS forbearer,
the plans would divide the workforce by occupational category,
reserving the highest raises for the highest earners. Those in the
midlevel occupations would stagnate or decline, while their betters
would be provided with both higher salary increases and a larger pool
of funds from which to draw performance-based adjustments.
Force of the Future and its government-wide twin from the
Bipartisan Center should also be opposed because they both would undo
the tremendous achievement of the current system with respect to
eliminating discrimination in pay. AFGE urges Congress to treat the
findings of the OPM study on pay equity as important accomplishments
worth protecting. We should be celebrating this success, not
considering replacing the system that produced it. That celebration
must include full funding, so that federal employees can restore their
status in the middle class.
maintaining a merit-based civil service and due process rights
A ``merit-based'' civil service system forms the cornerstone of all
modern Western democracies. It ensures that technical expertise is
brought to bear on performing agency missions, without the threat of
overt partisan agendas driving day-to-day operations.
When the FAST Report at recommendation A-5 states: ``Create a
separate and unique personnel system for all Defense Department
civilian employees,'' we at AFGE ask, will due process rights be
maintained? The FAST Report further comments on page 27: ``Another
issue with the civilian personnel system is the lack of flexibility to
hire and fire employees in a timely manner. Since the system's primary
rationale is fairness and impartiality, it is exceedingly difficult to
remove low performers.''
These code words and the outright contempt for civil service due
process rights they express should be opposed by all those who care
about maintaining a nonpartisan career civil service. The notion that
poor performers and those who commit acts of misconduct cannot be
disciplined or removed are myths that have been perpetuated by
advocates for an ``at will'' civil service.
The FAST Report ignores that the Civil Service Reform Act (CSRA)
provides that all title 5 employees, including DOD employees, may be
removed for either misconduct or poor performance. The employee merely
needs to be informed of his or her alleged deficiency and the reason
that management proposes to take an action against him or her (removal,
demotion, suspension, etc.).
An employee is subject to a final adverse action by an agency 30
days after receiving an adverse proposal. An employee may file an
appeal to an adverse action to the Merit System Protection Board
(MSPB), a third-party agency that hears and adjudicates civil service
appeals. MSPB administrative judges (AJs) hear the matter in an
adversarial setting and decide the case in accordance with established
legal precedents. If dissatisfied with the AJ's decision, either the
agency or the employee may appeal the decision to the full three Member
MSPB.
The MSPB appeal process is highly efficient and expeditious. Most
AJ decisions are rendered within 70 days of the filing of an appeal. On
appeal to the full MSPB from an AJ decision, agencies win 80-90 percent
of the time. Meanwhile, the agency's decision, e.g., removal of the
employee from the payroll, remains in effect during the entire appeals
process.
The importance of maintaining a nonpartisan, apolitical civil
service in an increasingly partisan environment cannot be overstated.
First, most federal jobs require technical skills that agencies simply
would not obtain through non-merit based appointment. Second, career
employees must be free to perform their work in accordance with
objective professional standards. Those standards must remain the only
basis for evaluating employee performance or misconduct.
Calls to make it easier to fire a federal employee by decreasing
due process rights or speeding up the removal process are ``dog
whistles'' for making the career service subject to the partisan or
personal whims of a few supervisors or political appointees.
The drafters of the FAST Report may find it politically unpopular
to admit this, but federal managers are already fully empowered under
existing law to take appropriate action when employees are
underperforming or engaged in misconduct. There is no group of people
who object more to the continuing presence in the workplace of those
who are not performing well or who may engage in misconduct than fellow
federal employees. When someone doesn't perform up to speed, it simply
means more work for the rest of the people who do perform well.
Similarly, an individual's misconduct hurts all employees in the
workplace, and it is usually fellow employees who are the first to
shine light on misconduct.
A premise of both DOD's ``Force of the Future'' proposal and the
FAST Report seems to be that federal managers lack adequate authority
and tools to discipline those who engage in misconduct or who are poor
performers. Thus, they argue, shifting employees from existing title 5
processes and protections to a new title 10 system for all DOD civilian
employees is warranted. Despite the various protestations of some
managers, management-associated think tanks, and so-called bipartisan
groups, the Government Accountability Office (GAO), the Merit Systems
Protection Board (MSPB) and the Office of Personnel Management (OPM)
have all issued reports and analyses that have come to pretty much the
same conclusion: When poor performers are not dealt with it is never
because the civil service laws or procedures are too difficult to
navigate, but rather because some managers (or their managers) either
do not want to take the time and effort to properly document poor
performance and remove or demote poor performers, or because they lack
the knowledge, skills, and ability to do this.
A recent GAO report, ``Improved Supervision and Better Use of
Probationary Periods Are Needed to Address Substandard Employee
Performance,'' (GAO-151-191), February 6, 2015, found four principal
reasons why agencies do not use the already substantial tools they have
available to them to remove the relatively few poor performers. All
four reasons related to management failures and/or unwillingness to
properly identify and document poor performance. AFGE would urge this
Subcommittee to review GAO's well thought-out recommendations and its
careful analysis of relevant statutes and regulations.
The premise that the procedural hurdles for removing poorly
performing employees are too high is simply not borne out by the facts.
When an employee invokes his/her rights to a formal adjudicatory
hearing before the MSPB, the agency almost always prevails. For
example, in 2013, only 3 percent of employees appealing their dismissal
to the MSPB prevailed on the merits. In contrast, agencies were favored
at a rate five times that of employees when formal appeals were
pursued. The notion that the MSPB makes it impossible to fire a federal
employee is simply not true. Perhaps we should call it an ``alternative
fact.''
There are well-established and fully adequate processes and
procedures for removing problem federal employees. This is true for
performance or conduct reasons. In fact, the standards for removing
underperformers were specifically developed so that poorly performing
employees may be more easily dismissed than employees committing
conduct-related offenses. Even more important, the burden of proof is
lower for removing a poor performer--it is only the ``substantial
evidence'' test, so that reasonable supervisors are given leeway to
determine what constitutes unacceptable or poor performance.
a better way forward
Already federal workers, including DOD civilian employees, have
contributed over $182 billion to deficit reduction during the past 8
years. Employee pay adjustments during this period have been very small
(and in quite a few years there were no adjustments at all), and
inflation-adjusted federal employee compensation has actually
decreased. Rather than continuing to punish and vilify DOD civilian
workers, Congress should consider giving DOD supervisors appropriate
tools to reward high performers. Freezes in pay, promotions and awards,
and decreases in benefits whether directly or through more employee
cost-sharing, do nothing to improve quality.
History is replete with examples of public service corrupted by
unfettered, politically-based employment decisions. That's why we
continue to support a meritbased civil service system with appropriate
due process, and checks and balances to ensure that both hiring and
firing decisions be merit-based, and subject to meaningful review.
AFGE strongly supports improvements in agency performance
management systems, such as the Defense Department's New Beginnings
approach. We look forward to working with lawmakers and others to see
this carried-out. AFGE also supports better training of both
supervisors and employees so that clear expectations are established,
performance is measurable, and appropriate steps are taken to either
remedy performance problems, or to remove the small number of poor
performers from the workplace. AFGE also recommends that Congress focus
more on empowering and improving the quality of the workplace for the
99 percent of DOD employees who perform well. While we understand the
need to deal with the 1 percent who may be problem performers, we must
not allow the other 99 percent to be tarred and feathered with the same
brush. Improving the lot of the 99 percent will further reduce the
influence and tolerance for the 1 percent to remain employees. This
starts with more proactive management.
AFGE opposes virtually all of the proposals set forth in the FAST
Report as they may affect civilian DOD workers. They are simply a
replay of NSPS, and its destructive tone. AFGE does support the call in
the FAST Report for improving educational opportunities for civilian
DOD employees. However, these authorities already exist. It is a lack
of funding that is responsible for the dearth of career development of
civilians at DOD.
impact of hiring freeze on military readiness
As many of you are aware, the current freeze on hiring and
promotion of federal employees has had and is continuing to have a
negative impact on operations at DOD. While wide swaths of employees
have received permission for exemptions on an individual basis, such as
depot maintenance employees, others, who have a direct impact on the
ability of the ``unfrozen'' employees to conduct their jobs, are still
caught in the freeze even though their jobs have a direct impact on
national security. For example, many of the engineers and systems
integrators that plan and direct workload at depots across the country
remain firmly caught in the freeze. Additionally, other key and equally
important areas of the organic industrial base, such as arsenals,
supply depots, and DLA are still caught in the freeze even though their
workload and workforce have a direct impact on military readiness.
Further, working capital fund employees, who work on funded orders from
customers, are still caught in the freeze, which is simply unreasonable
and makes no sense when current statute clearly states that their work
and manning should be tied to workload. AFGE believes that the Armed
Services Committee, the Senate and all of Congress should act to ensure
that the freeze on civilian employees at DOD--and across government--
are removed from the freeze on hiring and promotions. The current
freeze is the most inefficient method of managing employees and has a
tremendously negative impact on morale.
As you will recall, a recent GAO study identified that the military
services are failing to meet core requirements under 10 U.S.C. 2464 at
several locations across the organic industrial base. These gaps in
core requirements were identified at the lower tier levels and create
skill gaps that are critical to maintaining weapons systems that are
necessary for war fighting. Increased funding is needed in some cases
to ensure that backlogs are covered. In other cases, there is a need to
transfer workload to the organic depots. Regardless, these core skills
must be preserved to ensure military readiness. Failure to enforce the
law is not a good option. This is an area that must be addressed by
this Committee. GAO made recommendations that we hope the Committee
will enact.
AFGE would like to bring to the attention of this Committee an
issue that has an impact on retention and hiring at some facilities,
particularly DOD organic industrial facilities. Ata limited number of
facilities across the country, there is a great unfair disparity
between the wages of the GS employees and wage grade employees based on
illogical decisions that were made in the past or failure to make
logical decisions. For example, the salaried employees at Tobyhanna
Army Depot in Pennsylvania are in the New York locality pay area, while
the hourly employees are in the Scranton, Pennsylvania area for
purposes of locality-based pay. This differential treatment of salaried
and hourly employees results in enormous disparities in pay. Both
hourly and salaried workers at the Tobyhanna Army Depot should be in
the New York locality pay area, as commuting patterns for both
workforces show that the relevant labor market for all occupations
employed at the Depot is most closely aligned with New York. The
Federal Prevailing Rate Advisory Committee has recommended this
unification, but OPM has not implemented the change. We urge the
Committee to enact legislation to correct this unjustifiable inequity.
At some of our depots, AFGE Locals and management have worked
together on innovative ideas and programs to improve workload leveling
and to implement skills enhancement programs that will also increase
pay for employees. One such example is the Multi-Trades Demonstration
Pilot Program that Congress has authorized and reauthorized to allow
all of the military services to enter into agreements where certain
skilled journeymen level artisans could be trained in another skill and
work in both skills for a higher grade and higher pay. The Air Force
Materiel Command (AFMC) has worked diligently on a program at Ogden Air
Logistics Complex to implement a pilot program. This pilot
demonstration project has been years in planning. It has been approved
and promoted through the 4-Star Commanding General at AFMC multiple
times and forwarded to the Air Force, DOD and OPM. Yet, in spite of the
coordination and agreement between labor and management and despite the
solid business case analysis, the plan is caught in a bureaucratic
nightmare at DOD and OPM. AFGE needs your help to get this pilot
program moving and approved so we can implement the demonstration
program to determine whether it is a good model for the future.
conclusion
We would urge this Subcommittee to reject any movement of DOD's
civilian workforce from coverage under title 5 to a system run by the
Department under the authorities of title 10. This was tried under NSPS
only a few years ago, and was rightly abandoned when the gross
inequities of the system became apparent.
Although it is easy to focus on the small number of employees in
any organization who create problems, it is important to remember that
the vast majority of federal employees perform very well, and that
agency systems and the laws and regulations governing employee
performance serve the public interest in an apolitical, transparent,
and accountable civil service. We do not need new laws or authorities
regarding public administration. We need to make sure that agency
managers and supervisors (and the supervisors of supervisors) have the
training and will to implement current rules effectively. In this, we
share the concern of this Subcommittee, and we will work with you as we
strive to ensure that our civil service system motivates and maintains
high quality employee performance at DOD. Due process rights, including
union rights, for civil servants at DOD or other agencies provides
accountability to the public for both managers and political appointees
and is a cornerstone of our system of democracy and should not be
treated as expendable.
Prepared Statement by Max Stier, President and CEO Partnership for
Public Service
Chairman Tillis, Ranking Member Gillibrand, Members of the
Subcommittee on Personnel, thank you for the opportunity to submit a
statement for the record regarding the state of the Department of
Defense's civilian workforce and the need for meaningful personnel
reform.
I am Max Stier, President and CEO of the Partnership for Public
Service, a nonpartisan, nonprofit organization committed to inspiring a
new generation to enter public service and transforming the way
government works.
This Committee deserves credit for its leadership in taking steps
to reform the decades-old federal civil service system. The Committee
recognizes the stark reality that, as it exists today, the federal
personnel system is no longer a good fit for the dedicated civilian
employees of the Department of Defense and, more importantly,
undermines our government's ability to keep us safe. The personnel
system governing the Department, and our Federal Government more
generally, is a relic of a departed era and reflects a time when many
federal jobs were clerical in nature and did not require the
specialized knowledge and skills that they do today. America's
warfighters deserve and depend on a civilian workforce comprised of top
talent, which will not happen unless the personnel system promotes
effective recruitment, hiring, and compensation processes. Achieving
the best possible mission outcomes requires that the Department recruit
and hire the best and brightest civilian talent, compensate that talent
fairly, engage and develop employees' skills, and, when necessary,
discipline employees to achieve the best possible mission outcomes. The
Senate Armed Services Committee has led the way on reform, and the
Partnership believes that the time is right for Congress to do more to
overhaul the civil service system so that the Department can better
utilize its most important resource--its people.
the federal civil service system is in crisis and needs reform
The current civilian personnel system dates back to 1949 and serves
only to disconnect the federal workforce from the larger talent market
for knowledge-based professional jobs. To help agencies meet their
talent needs and accomplish their missions, Congress and OPM have, over
the years, authorized numerous agency-specific systems and
flexibilities. The result has been balkanization and fracturing of the
civil service. Agencies compete not only with the private sector for
talent but with other federal agencies as well.
Americans who want to serve our country and enter public service
confront a disjointed, unresponsive hiring process that is difficult to
understand, frustrating to navigate, and fails to meet the needs of
agencies or applicants alike. Individuals hired confront a job
classification and pay system which treats all occupations the same and
sets pay and grade level based on an arcane and arbitrary formula,
bearing little relationship to private sector compensation. Former
Secretary of Defense Robert Gates noted in his memoir, A Passion for
Leadership, that, ``Most of the sclerosis that impedes change in terms
of hiring, firing, work rules, pay, and personnel is generally
hardwired into law or regulations'' which, when combined with attacks
on public service more broadly, ``discourage young citizens with
desirable and needed talents from entering public service.'' \1\
---------------------------------------------------------------------------
\1\ ABC News. `` `Book excerpt: Robert Gates' `A Passion for
Leadership' '' ABC News. ABC News Network, 29 Jan. 2017. Web. 20 Mar.
2017.
---------------------------------------------------------------------------
The need for a modern, streamlined personnel system is particularly
acute at the Department of Defense, which employees nearly 700,000
civilian employees and currently operates under 66 unique civilian
personnel systems. \2\ According to the Partnership's analysis of the
most recent Office of Personnel Management (OPM) Federal Employee
Viewpoint Survey (FEVS), percent positive responses to the statement,
``My work unit is able to recruit people with the right skills'' ranged
between 39 percent at the Department of the Army to 42 percent at the
Department of the Air Force. \3\ These responses indicate that
employees see clearly an inability to hire and retain needed talent in
DOD. To its credit, Pentagon leaders recognize the need for meaningful
reform. Secretary Mattis, in his confirmation hearing, stated that he
would ``pursue reforms to the civilian personnel system.'' \4\ There
have been many attempts to modernize the Department over the years,
from the China Lake Demonstration Projects to AcqDemo and more recent
reforms that have sought to implement new approaches to compensation,
classification and performance management. However, these reforms have
not had a fundamentally transformative impact on the Department's
talent management approach, and it continues to struggle to recruit,
hire, retain, and engage the talent it needs. According to the
Partnership for Public Service's Best Places to Work in the Federal
Government Rankings, the most comprehensive measure of employee
engagement available, neither the DOD's Fourth Estate nor any of the
services ranked higher than 12th of 18 large agencies in overall
employee engagement. \5\
---------------------------------------------------------------------------
\2\ United States of America. Department of Defense. Under
Secretary of Defense for Personnel and Readiness. Force of the Future:
Final Report: Reform Proposals. Washington, DC: Department of Defense,
2015. 64.
\3\ ``2016 Federal Employee Viewpoint Survey EMPLOYEES INFLUENCING
CHANGE.'' U.S. Office of Personnel Management. N.p., n.d. Web. 20 Mar.
2017.
\4\ Katz, Eric. ``Trump's Defense Secretary Pick Promises
Efficiencies Among Civilian Workforce.'' GovernmentExecutive. N.p., 12
Jan. 2017. Web. 20 Mar. 2017.
\5\ 5 The Department of the Navy ranked 12 of 18, the DOD Fourth
Estate ranked 13 of 18, the Department of the AirForce ranked 14 of 18,
and the Department of the Army ranked 16 of 18.
---------------------------------------------------------------------------
True reform will require a thoughtful framework, strong leadership,
and employee buy-in. The Partnership offered just such a blueprint in
our 2014 report, Building the Enterprise: A New Civil Service
Framework. \6\ In that report, we proposed a comprehensive, fundamental
overhaul which offered ideas on how to speed hiring, modernize
compensation, simplify job classification, strengthen employee
accountability, and develop effective leaders. Our overarching goal was
to create a unified federal enterprise that balances merit principles
and common policies across government with agency flexibility to tailor
personnel systems to their unique missions. Agencies like DOD
ultimately know best how to hire, support and engage the people they
need, and the civil service system should help them do so rather than
stand in their way.
---------------------------------------------------------------------------
\6\ Building the Enterprise: A New Civil Service Framework. Rep.
Washington, DC: Partnership for Public Service, 2014.
---------------------------------------------------------------------------
congress should view dod as a test-bed for comprehensive civil service
reform
The current political moment represents a valuable opportunity for
major reform. Leaders in the public and private sector, in academia and
the good government stakeholder community all agree that the Federal
Government's personnel system is in desperate need of reform. The
Senate Armed Services Committee has led the way. Reforms enacted over
the last few years--creation of a public-private talent exchange to
facilitate sharing of best practices with the private sector, expanding
merit promotion privileges to employees on time-limited appointments
new authority to hire students and recent graduates quickly, among many
others--represent an important starting point for the Department and
the government as a whole. While the full impact of these recent
reforms is not yet known, there is no doubt that the Committee's
efforts have set the tone and direction for the rest of government. As
the Boston Consulting Group points out, ``Given that almost one-third
of all federal employees work in the DOD, its views are extraordinarily
influential, and there is a growing realization that the civil service
system is inadequate for effective government. It is opaque,
inefficient, and inflexible.'' \7\ The Committee should use its
influence to reimagine the Defense Department's personnel system as a
modern, agile, unified system that attracts and retains the best and
brightest and serves as a model for the rest of government. Below, I
outline several recommendations for doing so, focusing on both long-
term ideas for broader civil service reform beginning at DOD and
spreading throughout government, and actionable, short-term legislative
ideas that can have an immediate impact on the Department's ability to
manage its talent.
---------------------------------------------------------------------------
\7\ Brad Carson, Greg Mallory, and Mel Wolfgang. ``The Pentagon's
`Force of the Future' Reinvents Hiring'' www.bcgperspectives.com.
Boston Consulting Group, 15 Sept. 2016. Web. 20 Mar. 2017.
---------------------------------------------------------------------------
long-term recommendations
Pursue comprehensive civil service system reform at the Department of
Defense
The size and influence of the Department of Defense over the rest
of government mean that it can, should, and likely will serve as the
leader in personnel reform. With this in mind, the Committee should
pursue broad reform at the Department that can serve as a model for
other agencies. This reform should create a Defense Department that has
the flexibility to hire, pay, and hold accountable its workforce in an
equitable manner consistent with merit principles, veterans'
preference, and the foundational ideas of a professional civil service.
The Secretary should have broad authorities to recruit, hire and
compensate mission-critical talent in a way that best meets the needs
of the organization and should be able to manage performance and deal
with poor performers through a fair but reasonable process that serves
both managers and employees. The Armed Services Committee has already
laid the groundwork, and we strongly urge you to continue down the path
of reform.
Benchmark the Department's Hiring Process and Other Aspects of Talent
Management
For the Department of Defense to become an employer of choice for
the best and brightest, it must first be able to make meaningful
comparisons to the organizations with which it competes in critical
hiring and other talent management metrics. A human capital
benchmarking initiative would allow the Department to understand its
talent challenges better and lay out a path towards resolving them. Key
metrics might include time-to-hire; quality of hire; manager,
applicant, and new hire satisfaction with the hiring process; ability
to reach and recruit talent from diverse talent pools; and the use and
impact of special hiring authorities and flexibilities. This last
metric is particularly important in light of recent GAO findings that
government as a whole does a poor job of understanding and utilizing
the dozens of hiring authorities and flexibilities currently in law.
\8\ Congress could require the Department to collect this information
and use it to improve its internal talent management practices
continuously.
---------------------------------------------------------------------------
\8\ United States of America. Government Accountability Office.
Federal Hiring: OPM Needs to Improve Management and Oversight of Hiring
Authorities. Washington, DC: GAO, 2016.
---------------------------------------------------------------------------
Provide Regular, Meaningful Oversight of the Department's Performance
Management Processes
As DOD finally begins rolling out the ``New Beginnings''
performance management process, this Subcommittee should commit to
performing regular oversight to ensure that the initiative is meeting
its goals. The data shows that, as of now, performance management is a
problem. Across the Department, just a third of employees respond
positively to the statement that ``Promotions in my work unit are based
on merit,'' while even fewer agree that ``steps are taken to deal with
a poor performer who cannot or will not improve.'' \9\ Ensuring that
wider civil service reforms, including the new requirement that
reductionsin-force (RIFs) be based primarily on performance, truly take
hold will depend on an effective performance management process which
employees believe is both fair and equitable. Ultimately, holding
employees accountable for their performance is core to mission
accomplishment. This Subcommittee will be essential to holding DOD
itself accountable and making sure that the Department is adjusting
course as necessary.
---------------------------------------------------------------------------
\9\ 9 ``2016 Federal Employee Viewpoint Survey EMPLOYEES
INFLUENCING CHANGE.'' U.S. Office of Personnel Management. N.p., n.d.
Web. 20 Mar. 2017.
---------------------------------------------------------------------------
The topic of RIFs deserves special focus. Congress took a step in
the right direction by weighting performance more heavily in executing
reductions-in-force. However, given that there has not been a large-
scale RIF in over 20 years, there is reason to believe that the process
may have unanticipated and unintended negative consequences on the
Department's overall talent posture--e.g., upending succession planning
by pushing out or discouraging younger talent and making it harder to
bring in new talent because of the re-employment rights of employees
released as part of a RIF. It will be essential for the Committee to
understand how the Department would execute a RIF and how a RIF would
affect the ability of the Department to recruit, deploy, develop and
discipline its civilian talent.
short-term recommendations
Change the Standard for Using Direct Hire Authority from a Shortage of
``Minimally-Qualified'' Candidates to a Shortage of ``Highly-
Qualified'' Candidates and Grant DOD the Authority to Make
Direct Hire Determinations
In filling the ranks of the civilian workforce, government as a
whole and DOD, in particular, should only hire people who are highly
qualified for their jobs--settling for candidates who are minimally
qualified is simply the wrong bar. Currently, however, agencies must
demonstrate to OPM that they face a shortage of candidates who are
minimally qualified before requesting direct hire authority for that
position or group of positions. Further, to show a lack of minimally
qualified candidates, an agency must go through the full hiring process
before applying to OPM for such authority, adding a minimum of six
months to the process. Therefore, we propose that Congress change the
standard that the Department of Defense must meet to use direct hire
authority for any position to a demonstration of a shortage of highly-
qualified talent. Also, the Secretary of Defense should have the
authority to grant direct hire authority to components or for positions
where it is needed, with proper OPM oversight. The Department knows
best what its talent needs are and where the roadblocks to reaching
that talent lie, and it should have the power to act to address them.
Allow the Secretary to Offer Market-Based Pay for Mission-Critical
Positions
The General Schedule is more than six decades old and no longer
serves to effectively and rationally compensate the talent that the
Department needs. While there are certainly some employees who may be
overcompensated by the current system, relative to the labor market,
there are other vital positions for which federal pay is simply not
competitive. The Partnership's report, Building the Enterprise: A New
Civil Service Framework, laid out a new pay-setting process for the
federal workforce. The modernized pay system would establish broad pay
bands for employees rather than rigid grades, better align salaries and
benefits on an occupation-by-occupation basis, set salaries based on
those comparisons and give agencies the flexibility to bring talent in
at the appropriate salary level. While the Committee need not pursue
this detailed of an approach in the short term, the Department would
greatly benefit from having the authority to set market-based pay
levels for specific mission-critical occupations as a way to better
attract and retain badly-needed talent.
Authorize DOD to Noncompetitively Rehire Former Department Employees to
Any Position for Which They Qualify
Currently, former federal employees who have held a career or
career-conditional position can be reinstated non-competitively within
the Federal Government, but only to a job that is at or below the grade
level they last held in the Federal Government. The individual applying
may be qualified for a more senior position due to several years of
valuable higher-level experience outside the government, but that
experience does not matter for the purpose of their non-competitive
eligibility. The result is that government unnecessarily
disincentivizes talented former federal employees from returning to
public service. This proposal would create better flow between DOD and
the private sector and encourage talented individuals to return to
government service.
Require DOD to Accept Resumes for SES Positions in the Initial Stage of
the Hiring Process
In many cases, applicants for SES positions must apply for these
jobs by writing lengthy essays addressing their qualifications for the
position. This process is time-consuming and greatly deters external
candidates from applying. A report by the Partnership, A Pivotal Moment
for the Senior Executive Service: Measures, Aspirational Practices and
Stories of Success, pointed out that the application process
``discourages many potential candidates from applying, particularly if
they come from the private sector.'' \10\ By allowing all applicants
for SES positions to apply with a simple resume at the initial stages
of the hiring process, agencies can ensure they are receiving a diverse
pool of candidates from both within and outside government. As part of
this recommendation, it may also be useful to require agencies to
survey candidates, new hires and hiring managers to ensure the hiring
and selection process brings the best possible talent to the
Department.
---------------------------------------------------------------------------
\10\ A Pivotal Moment for the Senior Executive Service: Measures,
Aspirational Practices and Stories of Success. Rep. Washington, DC:
Partnership for Public Service, 2016. 15.
---------------------------------------------------------------------------
Authorize DOD, rather than OPM, to certify that their selected SES
candidates possess the Executive Core Qualifications
Rather than relying on the current OPM Qualifications Review Board
(QRB) that is required to approve applicants for executive positions,
DOD should be able to certify its executive talent on the basis that
the Department itself knows best what type of executive it needs. The
QRB serves as the last step in the SES selection process, and its
purpose is to certify that an SES candidate possesses broad leadership
skills. \11\ However, the QRB process extends the length of the hiring
process even while it approves nearly all candidates. Delegating this
authority to DOD has the potential to speed up the hiring and
certification process for new executives and allow the Department to
manage its executive talent better. To protect against abuse and ensure
quality candidates, OPM could review and certify a sample of hiring
decisions annually to ensure the Department is acting appropriately.
---------------------------------------------------------------------------
\11\ ``Selection Process.'' U.S. Office of Personnel Management.
OPM, n.d. Web. 20 Mar. 2017.
---------------------------------------------------------------------------
Establish a Dual-Track Promotional System to Enable Both Managers and
Technical Experts to Advance Their Careers
The rigid structure of the General Schedule typically requires
employees to move into supervisory and management roles to advance
their careers, even in cases where the employee may not be an effective
manager. For employees who possess valuable technical expertise but are
not suited for supervisory duties, this is especially challenging. A
dual promotional track that allows employees to become either managers
or technical experts would give both agencies and employees more
choices. Individuals with superior technical qualifications could
advance in their careers without being forced to become a manager,
while those who have demonstrated an aptitude for leadership would be
allowed to take on those responsibilities. The outcome is not just more
satisfied employees, but more effective managers throughout the
organization.
Require Performance Plans for Political Appointees Which Recognize
Critical Management and Leadership Goals
As the highest level of leadership in the Department of Defense,
political appointees play a crucial role in providing leadership and
setting priorities for the organization. Appointees should be held
accountable for their performance and contributions like every other
employee. Unfortunately, DOD does not perform particularly well
regarding the effectiveness of its leadership--with rankings among its
major components in the Partnership's measure of ``Effective
Leadership'' ranging from seventh to 15th out of 18 large agencies.
\12\ Scores in the subcategory specifically measuring satisfaction with
senior leaders are only marginally better, with the major DOD
components ranging from between sixth and 12th among 18 large agencies.
\13\ Across the Department, between 39 percent and 45 percent of
employees respond positively to the statement, ``In my organization,
leaders generate high levels of motivation and commitment in the
workforce.'' \14\ Performance plans should address the accountability
of leaders for managing well, supporting efforts to recruit, hire and
retain highly-qualified talent, training and developing future leaders,
engaging employees, and holding subordinate managers accountable for
addressing employee performance issues. Each of these criteria plays a
role in building a high-performing workforce and will drive leadership
attention to the pressing workforce and management issues within the
Department.
---------------------------------------------------------------------------
\12\ Partnership for Public Service. ``Best Places to Work in the
Federal Government.'' Best Places to Work in the Federal Government.
Partnership for Public Service, n.d. Web. 20 Mar. 2017.
\13\ In the Best Places to Work subcategory of ``Effective
Leadership--Senior Leaders'', the rankings were as follows: Department
of the Air Force (6 of 18), DOD Fourth Estate (9 of 18), Department of
the Navy (11 of 18), Department of the Army (12 of 18)
\14\ ``2016 Federal Employee Viewpoint Survey EMPLOYEES INFLUENCING
CHANGE.'' U.S. Office of Personnel Management. N.p., n.d. Web. 20 Mar.
2017.
---------------------------------------------------------------------------
Expand the Pathways Programs to Allow for the Conversion of Third-Party
Interns and Volunteers
Student interns and recent graduates provide a critical pipeline of
entry-level talent into any organization. Increasing the number of
young people in an organization provides new ideas, reinvigorates the
workforce, and creates a pool of future leaders. At the Department of
Defense, where just seven percent of the workforce is under the age of
30--a number well below the comparable level in the private sector--
this is especially true. \15\ Further, internships give agencies the
opportunity to evaluate potential employees on the job, where they can
most effectively assess their work product and their fit within the
organization. The Pathways Programs serve as the best means of bringing
younger talent into government; codifying conversion authority while
simultaneously expanding it to allow for excepted service appointments
of student interns, volunteers who perform substantive work functions,
and interns hired through third-party organizations would increase the
pool of proven, high-quality entry-level talent available to DOD.
---------------------------------------------------------------------------
\15\ ``U.S. Office of Personnel Management.'' FedScope. N.p., n.d.
Web. 20 Mar. 2017.
---------------------------------------------------------------------------
Require Aspiring DOD Executives to Demonstrate Experience in Another
Sector, Level of Government, or Agency Before Being Selected
for the SES
The Senior Executive Service, established by the Civil Service
Reform Act of 1978, was originally conceived as a mobile corps of
federal leaders. This Committee recognized the importance of mobility
and diversity of experience for the civilian workforce last year when
it included a provision authorizing a DOD public-private talent
exchange in the National Defense Authorization Act for Fiscal Year 2017
(P.L. 114-328). The Armed Services Committee could build upon this new
authority by requiring DOD to give added weight during the SES
selection process to candidates who would bring a diversity of
experience to the role. Rotations offer a rich professional development
opportunity in management and policy for current and aspiring leaders
and allow agencies to build managerial skills, strategically fill
vacancies, and infuse new thinking into their organizations. However,
barriers to greater mobility among executives and aspiring executives
have built up over time. These include agencies' hoarding of talent and
reluctance to accept short-term transition costs of losing a top
performer, and organizations doing a poor job of onboarding new
executives. Overcoming these roadblocks, at least initially, will
require a push from Congress, and the Partnership firmly believes that
the benefits far outweigh the costs.
Move to a Shared Services Model for DOD Human Resources
In a constrained fiscal environment, the Department of Defense must
look for new ways to seek efficiencies and reduce spending. Shared
services offer the ability to use resources more efficiently while
enabling more effective delivery of mission through efficient
administrative services. For an organization the size of DOD, the
savings potential of a move to an HR shared services model is well into
the billions of dollars; the Federal CIO Council has estimated that the
savings generated by shared services can be estimated somewhere between
$21 billion and $47 billion per year. \16\ The need for such
efficiencies at DOD is great: the Department operates hundreds of
separate HR IT systems and employs 22,000 civilian employees in HR.
\17\ Further, DOD has found that ``due to the lack of modern automated
workflows, gaps in functionality are bridged by human intervention.''
\18\ Shared services can bring about this system modernization at a
lower cost to the Department than if it were to develop such systems
in-house. Whether the move to a shared service model results in a
centralized DOD HR function or one where a single component acts as an
executive agent for all DOD is a tactical decision--the demands on the
Department's resources are too pressing not to move down this path.
Creating the right environment for shared services entails committing
to the goal, altering spending expectations and incentives, and
rethinking how government makes investments in its administrative
services and infrastructure. The Committee can and should play a
leading role in driving that commitment and investment forward. \19\
---------------------------------------------------------------------------
\16\ United States of America. U.S. Chief Information Officers
Council. Office of Management and Budget. Federal Shared Services.
Washington, DC: U.S. CIO Council, n.d.
\17\ United States of America. Department of Defense. Under
Secretary of Defense for Personnel and Readiness. Force of the Future:
Final Report: Reform Proposals. Washington, DC: Department of Defense,
2015. 105.
\18\ 18 Ibid. 105.
\19\ 19 ``Human Resources Shared Services: Progress, Lessons and
Opportunities .'' Ourpublicservice.org. Partnership for Public
Services, Dec. 2015. Web. 20 Mar. 2017. 8.
---------------------------------------------------------------------------
The Committee Should Pay Close Attention to the Management
Qualifications of Nominees to Critical Positions Within the
Department
As the single largest federal Department, with hundreds of
thousands of employees in offices and installations across the country,
the Pentagon represents a challenging management environment for even
the most effective leaders. Each service, even taken individually, is
comparable in size, budget, and complexity to a Fortune 100 company.
The Armed Services Committee plays a crucial role in ensuring that
nominees for key executive positions in the Department bring management
skills to their new jobs along with subject matter expertise--a role
that is especially important because successfully managing in the
Federal Government is much different than managing in other sectors. As
this Subcommittee, as well as the full Committee, begin to consider the
President's nominees for important DOD posts, the Partnership urges you
to review, and question, each nominee's management qualifications to
ensure that potential Defense Department leaders understand the
challenges they are taking on and are capable of successfully leading
their organizations.
Conclusion
Chairman Tillis and Ranking Member Gillibrand, thank you for the
opportunity to share my views on the need for civilian personnel reform
at the Department of Defense. I am pleased to see this Subcommittee
maintain its commitment to modernizing and strengthening the civil
service system so that it can meet the needs of the Department's
hundreds of thousands of civilian employees, as well as our men and
women in uniform. I look forward to working with the Subcommittee on
these important issues moving forward.
Prepared Statement by Sarah Maples, Director National Security and
Foreign Affairs Veterans of Foreign Wars of the United States
Chairman Tillis, Ranking Member Gillibrand, and distinguished
members of the Personnel Subcommittee, on behalf of the men and women
of the Veterans of Foreign Wars of the United States (VFW) and its
Auxiliary, I thank you for the opportunity to provide the VFW's views
on the Department of Defense (DOD) civilian personnel reforms. We
appreciate the work this subcommittee has done in the past to improve
programs and policies for our service members and their families.
Section 1101 of the National Defense Authorization Act (NDAA) for
Fiscal Year 2016 required DOD to develop a new Reduction in Force (RIF)
policy wherein, should civilian employees be required to be let go from
service, determination of who will be released from employment ``shall
be made primarily on the basis of performance.'' In January 2017, DOD
released its new policy, which it claims meets this requirement. Upon
review, however, the VFW believes the new policy not only fails to meet
the NDAA requirement, but it also disadvantages veterans by reducing
the value of veterans preference, particularly for transitioning
service members who gave years of honorable service to our country but
lack enough tenure in post-military federal service to have received a
performance rating.
Under DOD's previous RIF policy which continues to apply to the
rest of the Federal Government, the order of retention was: 1) tenure
of employment; 2) veterans preference; 3) length of service; and 4)
performance. DOD's new policy claims to adhere to the following order
of precedence: 1) performance; 2) tenure; 3) average score; 4) veterans
preference; and 5) service computation date. However, this is
inaccurate, as the new policy requires DOD to divide employees by
tenure group and number of months of assessed performance before
performance is even considered.
Therefore, the true order of precedence is as follows: 1) tenure
group; 2) months of assessed performance; 3) performance rating of
record; 4) tenure group; 5) average score; 6) veterans preference; and
7) service computation date. This means civilian employees are
protected by two rounds of tenure before their performance is even
considered which is counter to the intent of the NDAA mandate and more
tenure-centered than the previous policy. Not only does this new order
unfairly weight the system towards tenure, as opposed to the stated
performance, it also undervalues the service veterans performed for
their country.
Under the previous system, if two individuals were hired on the
same day--one a civilian who had worked six months for another federal
agency before transferring to DOD, and the other a veteran with ten
years of honorable military service--and a RIF was then implemented,
the veteran would be retained above the civilian. The previous policy
recognized that veterans, while absent from the civilian workforce,
have valuable experience worth considering. Therefore, in situations
where individuals were in the same tenure group, the veteran's service
was the deciding factor in who was retained.
According to the new policy, if DOD has not yet rated either
employee, the transferred civilian will be retained before the veteran,
simply because that individual would have a rating of record, whereas
the veteran would not, despite the veteran's ten years of honorable
military service. This is true even if the civilian's rating of record
reflected below average performance.
This is because DOD's performance management system does not
provide appraisals until after an employee has served more than 90
days. In instances where DOD has not yet evaluated an individual's
performance, they will accept a rating from another federal agency.
They will not, however, accept a military performance rating in a
similar circumstance. Therefore, a recently transitioned veteran with
ten years of honorable military service will be given no performance
value and, instead, will be cut based on lack of tenure. Meanwhile, a
non-veteran with a poor performance rating from another federal agency
and as little as three months of service to DOD is retained.
Additionally, when asked why it cannot include a performance factor
for veterans that recognizes their honorable service, DOD responded in
a letter to the VFW that it has ``remained consistent with the
government-wide regulations, which do not allow consideration of
performance assessed using military . . . ratings of record.'' The VFW
finds this statement to be disingenuous, as the rest of the government
is providing a value for military performance by using veterans
preference as the second highest factor in RIF proceedings. However,
DOD has reduced veterans preference while providing no comparable
evaluation of military performance.
DOD has repeatedly stated that they believe their new system will
better benefit ``high performing veterans.'' However, it is clear that
many veterans may never make it to the ``high performing'' category, as
they will be eliminated before their performance can ever be evaluated.
Meanwhile, underperforming civil servants will be retained at the
expense of veterans who honorably served the very department that now
casts them out. This is particularly concerning for veterans who
received high performance marks during military service and are now on
a RIF short list simply because they have less than 90 days of civilian
work experience.
Congress has continually tried to ensure that time spent serving
our Nation in the Armed Services is valued when veterans move into the
civilian workforce. When passing the Jobs for Veterans Act (Public Law
107-288) in 2002, which revised and improved employment, training and
placement services furnished to veterans, Senator Rockefeller said,
``As we ask the young men and women of this Nation to prepare
themselves to take up arms in its defense, we must ensure that we will
be able to help them find productive careers upon their return as we
did for the previous generations that defended our freedoms.''
This protection for those who have returned from the battlefield is
no less needed now, after fifteen years of war and its associated
demands, than it was at the beginning of the war. As such, the VFW
calls on Congress and the Department of Defense to recognize the
service and sacrifice of this Nation's veterans by correcting the
injustice done by DOD's new RIF policy. Specifically, we call on the
Department of Defense to meet the true intent of the 2016 NDAA by
limiting tenure consideration to a single instance, as opposed to the
multiple considerations it is currently being given, and restoring
veterans preference to its proper place in the RIF factors in order
that the performance of veterans be properly reflected.
[all]