[House Report 108-380]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-380
======================================================================
 
                  GAO HUMAN CAPITAL REFORM ACT OF 2003

                                _______
                                

 November 19, 2003.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Tom Davis of Virginia, from the Committee on Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2751]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform, to whom was referred 
the bill (H.R. 2751) to provide new human capital flexibilities 
with respect to the GAO, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.







                                CONTENTS

Committee Statement and Views....................................     6
Section-by-Section...............................................     8
Explanation of Amendments........................................    13
Committee Consideration..........................................    13
Rollcall Votes...................................................    13
Application of Law to the Legislative Branch.....................    13
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    14
Statement of General Performance Goals and Objectives............    14
Constitutional Authority Statement...............................    14
Unfunded Mandate Statement.......................................    14
Committee Estimate...............................................    14
Budget Authority and Congressional Budget Office Cost Estimate...    14
Changes in Existing Law Made by the Bill, as Reported............    17
Additional Views.................................................    23






    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; AMENDMENT OF TITLE 31.

  (a) Short Title.--This Act may be cited as the ``GAO Human Capital 
Reform Act of 2003''.
  (b) Amendment of Title 31.--Except as otherwise expressly provided, 
whenever in this Act an amendment is expressed in terms of an amendment 
to a section or other provision, the reference shall be considered to 
be made to a section or other provision of title 31, United States 
Code.

SEC. 2. AMENDMENTS TO PUBLIC LAW 106-303.

  (a) Authorities Made Permanent.--Sections 1 and 2 of Public Law 106-
303 (5 U.S.C. 8336 note and 5597 note) are amended by striking ``for 
purposes of the period beginning on the date of the enactment of this 
Act and ending on December 31, 2003'' each place it appears and 
inserting ``October 13, 2000''.
  (b) Sense of Congress.--
          (1) Voluntary early retirement authority.--Section 1 of 
        Public Law 106-303 is amended by adding at the end the 
        following:
  ``(e) Sense of Congress.--It is the sense of Congress that the 
implementation of this section is intended to reshape the General 
Accounting Office workforce and not downsize the General Accounting 
Office workforce.''.
          (2) Voluntary separation incentive payments.--Section 2 of 
        Public Law 106-303 is amended by adding at the end the 
        following:
  ``(g) Sense of Congress.--It is the sense of Congress that the 
implementation of this section is intended to reshape the General 
Accounting Office workforce and not downsize the General Accounting 
Office workforce.''.
  (c) Additional Limitation Relating to VSIPs.--Section 2(b) of Public 
Law 106-303 is amended by striking paragraph (2) and inserting the 
following:
          ``(2) subsection (a)(2)(G) of such section shall be applied--
                  ``(A) by construing the citations therein to be 
                references to the appropriate authorities in connection 
                with employees of the General Accounting Office; and
                  ``(B) by deeming such subsection to be amended by 
                striking `Code.' and inserting `Code, or who, during 
                the thirty-six month period preceding the date of 
                separation, performed service for which a student loan 
                repayment benefit was or is to be paid under section 
                5379 of title 5, United States Code.';''.

SEC. 3. ANNUAL PAY ADJUSTMENTS.

  (a) Officers and Employees Generally.--Paragraph (3) of section 
732(c) is amended to read as follows:
          ``(3) except as provided under section 733(a)(3)(B) of this 
        title, basic rates of officers and employees of the Office 
        shall be adjusted annually to such extent as determined by the 
        Comptroller General, and in making that determination the 
        Comptroller General shall consider--
                  ``(A) the principle that equal pay should be provided 
                for work of equal value within each local pay area;
                  ``(B) the need to protect the purchasing power of 
                officers and employees of the Office, taking into 
                consideration the Consumer Price Index or other 
                appropriate indices;
                  ``(C) any existing pay disparities between officers 
                and employees of the Office and non-Federal employees 
                in each local pay area;
                  ``(D) the pay rates for the same levels of work for 
                officers and employees of the Office and non-Federal 
                employees in each local pay area;
                  ``(E) the appropriate distribution of agency funds 
                between annual adjustments under this section and 
                performance-based compensation; and
                  ``(F) such other criteria as the Comptroller General 
                considers appropriate, including, but not limited to, 
                the funding level for the Office, amounts allocated for 
                performance-based compensation, and the extent to which 
                the Office is succeeding in fulfilling its mission and 
                accomplishing its strategic plan;
        notwithstanding any other provision of this paragraph, an 
        adjustment under this paragraph shall not be applied in the 
        case of any officer or employee whose performance is not at a 
        satisfactory level, as determined by the Comptroller General 
        for purposes of such adjustment;''.
  (b) Officers and Employees in the Office Senior Executive Service.--
Subparagraph (B) of section 733(a)(3) is amended to read as follows:
                  ``(B) adjusted annually by the Comptroller General 
                after taking into consideration the factors listed 
                under section 732(c)(3) of this title, except that an 
                adjustment under this subparagraph shall not be applied 
                in the case of any officer or employee whose 
                performance is not at a satisfactory level, as 
                determined by the Comptroller General for purposes of 
                such adjustment;''.
  (c) Conforming Amendment.--Section 732(b)(6) is amended by striking 
``title 5.'' and inserting ``title 5, except as provided under 
subsection (c)(3) of this section and section 733(a)(3)(B) of this 
title.''.

SEC. 4. PAY RETENTION.

  Paragraph (5) of section 732(c) is amended to read as follows:
          ``(5) the Comptroller General shall prescribe regulations 
        under which an officer or employee of the Office shall be 
        entitled to pay retention if, as a result of any reduction-in-
        force or other workforce adjustment procedure, position 
        reclassification, or other appropriate circumstances as 
        determined by the Comptroller General, such officer or employee 
        is placed in or holds a position in a lower grade or band with 
        a maximum rate of basic pay that is less than the rate of basic 
        pay payable to the officer or employee immediately before the 
        reduction in grade or band; such regulations--
                  ``(A) shall provide that the officer or employee 
                shall be entitled to continue receiving the rate of 
                basic pay that was payable to the officer or employee 
                immediately before the reduction in grade or band until 
                such time as the retained rate becomes less than the 
                maximum rate for the grade or band of the position held 
                by such officer or employee; and
                  ``(B) shall include provisions relating to the 
                minimum period of time for which an officer or employee 
                must have served or for which the position must have 
                been classified at the higher grade or band in order 
                for pay retention to apply, the events that terminate 
                the right to pay retention (apart from the one 
                described in subparagraph (A)), and exclusions based on 
                the nature of an appointment; in prescribing 
                regulations under this subparagraph, the Comptroller 
                General shall be guided by the provisions of sections 
                5362 and 5363 of title 5.''.

SEC. 5. RELOCATION BENEFITS.

  Section 731 is amended by adding after subsection (e) the following:
  ``(f) The Comptroller General shall prescribe regulations under which 
officers and employees of the Office may, in appropriate circumstances, 
be reimbursed for any relocation expenses under subchapter II of 
chapter 57 of title 5 for which they would not otherwise be eligible, 
but only if the Comptroller General determines that the transfer giving 
rise to such relocation is of sufficient benefit or value to the Office 
to justify such reimbursement.''.

SEC. 6. INCREASED ANNUAL LEAVE FOR KEY EMPLOYEES.

  Section 731 is amended by adding after subsection (f) (as added by 
section 5 of this Act) the following:
  ``(g) The Comptroller General shall prescribe regulations under which 
key officers and employees of the Office who have less than 3 years of 
service may accrue leave in accordance with section 6303(a)(2) of title 
5, in those circumstances in which the Comptroller General has 
determined such increased annual leave is appropriate for the 
recruitment or retention of such officers and employees. Such 
regulations shall define key officers and employees and set forth the 
factors in determining which officers and employees should be allowed 
to accrue leave in accordance with this subsection.''.

SEC. 7. EXECUTIVE EXCHANGE PROGRAM.

  Section 731 is amended by adding after subsection (g) (as added by 
section 6 of this Act) the following:
  ``(h) The Comptroller General may by regulation establish an 
executive exchange program under which officers and employees of the 
Office may be assigned to private sector organizations, and employees 
of private sector organizations may be assigned to the Office, to 
further the institutional interests of the Office or Congress, 
including for the purpose of providing training to officers and 
employees of the Office. Regulations to carry out any such program--
          ``(1) shall include provisions (consistent with sections 3702 
        through 3704 of title 5) as to matters concerning--
                  ``(A) the duration and termination of assignments;
                  ``(B) reimbursements; and
                  ``(C) status, entitlements, benefits, and obligations 
                of program participants;
          ``(2) shall limit--
                  ``(A) the number of officers and employees who are 
                assigned to private sector organizations at any one 
                time to not more than 15; and
                  ``(B) the number of employees from private sector 
                organizations who are assigned to the Office at any one 
                time to not more than 30;
          ``(3) shall require that an employee of a private sector 
        organization assigned to the Office may not have access to any 
        trade secrets or to any other nonpublic information which is of 
        commercial value to the private sector organization from which 
        such employee is assigned;
          ``(4) shall require that, before approving the assignment of 
        an officer or employee to a private sector organization, the 
        Comptroller General shall determine that the assignment is an 
        effective use of the Office's funds, taking into account the 
        best interests of the Office and the costs and benefits of 
        alternative methods of achieving the same results and 
        objectives; and
          ``(5) shall not allow any assignment under this subsection to 
        commence after the end of the 5-year period beginning on the 
        date of the enactment of this subsection.
  ``(i) An employee of a private sector organization assigned to the 
Office under the executive exchange program shall be considered to be 
an employee of the Office for purposes of--
          ``(1) chapter 73 of title 5;
          ``(2) sections 201, 203, 205, 207, 208, 209, 603, 606, 607, 
        643, 654, 1905, and 1913 of title 18;
          ``(3) sections 1343, 1344, and 1349(b) of this title;
          ``(4) chapter 171 of title 28 (commonly referred to as the 
        `Federal Tort Claims Act') and any other Federal tort liability 
        statute;
          ``(5) the Ethics in Government Act of 1978 (5 U.S.C. App.);
          ``(6) section 1043 of the Internal Revenue Code of 1986; and
          ``(7) section 27 of the Office of Federal Procurement Policy 
        Act (41 U.S.C. 423).''.

SEC. 8. REDESIGNATION.

  (a) In General.--The General Accounting Office is hereby redesignated 
the Government Accountability Office.
  (b) References.--Any reference to the General Accounting Office in 
any law, rule, regulation, certificate, directive, instruction, or 
other official paper in force on the date of enactment of this Act 
shall be considered to refer and apply to the Government Accountability 
Office.

SEC. 9. PERFORMANCE MANAGEMENT SYSTEM.

  Paragraph (1) of section 732(d) is amended to read as follows:
          ``(1) for a system to appraise the performance of officers 
        and employees of the General Accounting Office that meets the 
        requirements of section 4302 of title 5 and in addition 
        includes--
                  ``(A) a link between the performance management 
                system and the agency's strategic plan;
                  ``(B) adequate training and retraining for 
                supervisors, managers, and employees in the 
                implementation and operation of the performance 
                management system;
                  ``(C) a process for ensuring ongoing performance 
                feedback and dialogue between supervisors, managers, 
                and employees throughout the appraisal period and 
                setting timetables for review;
                  ``(D) effective transparency and accountability 
                measures to ensure that the management of the system is 
                fair, credible, and equitable, including appropriate 
                independent reasonableness, reviews, internal 
                assessments, and employee surveys; and
                  ``(E) a means to ensure that adequate agency 
                resources are allocated for the design, implementation, 
                and administration of the performance management 
                system;''.

SEC. 10. CONSULTATION.

  Before the implementation of any changes authorized under this Act, 
the Comptroller General shall consult with any interested groups or 
associations representing officers and employees of the General 
Accounting Office.

SEC. 11. REPORTING REQUIREMENTS.

  (a) Annual Reports.--The Comptroller General shall include--
          (1) in each report submitted to Congress under section 719(a) 
        of title 31, United States Code, during the 5-year period 
        beginning on the date of enactment of this Act, a summary 
        review of all actions taken under sections 2, 3, 4, 6, 7, 9, 
        and 10 of this Act during the period covered by such report, 
        including--
                  (A) the respective numbers of officers and 
                employees--
                          (i) separating from the service under section 
                        2 of this Act;
                          (ii) receiving pay retention under section 4 
                        of this Act;
                          (iii) receiving increased annual leave under 
                        section 6 of this Act; and
                          (iv) engaging in the executive exchange 
                        program under section 7 of this Act, as well as 
                        the number of private sector employees 
                        participating in such program and a review of 
                        the general nature of the work performed by the 
                        individuals participating in such program;
                  (B) a review of all actions taken to formulate the 
                appropriate methodologies to implement the pay 
                adjustments provided for under section 3 of this Act, 
                except that nothing under this subparagraph shall be 
                required if no changes are made in any such methodology 
                during the period covered by such report; and
                  (C) an assessment of the role of sections 2, 3, 4, 6, 
                7, 9, and 10 of this Act in contributing to the General 
                Accounting Office's ability to carry out its mission, 
                meet its performance goals, and fulfill its strategic 
                plan; and
          (2) in each report submitted to Congress under such section 
        719(a) after the effective date of section 3 of this Act and 
        before the close of the 5-year period referred to in paragraph 
        (1)--
                  (A) a detailed description of the methodologies 
                applied under section 3 of this Act and the manner in 
                which such methodologies were applied to determine the 
                appropriate annual pay adjustments for officers and 
                employees of the Office;
                  (B) the amount of the annual pay adjustments afforded 
                to officers and employees of the Office under section 3 
                of this Act; and
                  (C) a description of any extraordinary economic 
                conditions or serious budget constraints which had a 
                significant impact on the determination of the annual 
                pay adjustments for officers and employees of the 
                Office.
  (b) Final Report.--Not later than 6 years after the date of enactment 
of this Act, the Comptroller General shall submit to Congress a report 
concerning the implementation of this Act. Such report shall include--
          (1) a summary of the information included in the annual 
        reports required under subsection (a);
          (2) recommendations for any legislative changes to section 2, 
        3, 4, 6, 7, 9, or 10 of this Act; and
          (3) any assessment furnished by the General Accounting Office 
        Personnel Appeals Board or any interested groups or 
        associations representing officers and employees of the Office 
        for inclusion in such report.
  (c) Additional Reporting.--Notwithstanding any other provision of 
this section, the reporting requirement under subsection (a)(2)(C) 
shall apply in the case any report submitted under section 719(a) of 
title 31, United States Code, whether during the 5-year period 
beginning on the date of enactment of this Act (as required by 
subsection (a)) or at any time thereafter.

SEC. 12. TECHNICAL AMENDMENT.

  Section 732(h)(3)(A) is amended by striking ``reduction force'' and 
inserting ``reduction in force''.

SEC. 13. EFFECTIVE DATES.

  (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act shall take effect on the date of 
enactment of this Act.
  (b) Pay Adjustments.--
          (1) In general.--Section 3 of this Act and the amendments 
        made by that section shall take effect on October 1, 2005, and 
        shall apply in the case of any annual pay adjustment taking 
        effect on or after that date.
          (2) Interim authorities.--In connection with any pay 
        adjustment taking effect under section 732(c)(3) or 
        733(a)(3)(B) of title 31, United States Code, before October 1, 
        2005, the Comptroller General may by regulation--
                  (A) provide that such adjustment not be applied in 
                the case of any officer or employee whose performance 
                is not at a satisfactory level, as determined by the 
                Comptroller General for purposes of such adjustment; 
                and
                  (B) provide that such adjustment be reduced if and to 
                the extent necessary because of extraordinary economic 
                conditions or serious budget constraints.
          (3) Additional authority.--
                  (A) In general.--The Comptroller General may by 
                regulation delay the effective date of section 3 of 
                this Act and the amendments made by that section for 
                groups of officers and employees that the Comptroller 
                General considers appropriate.
                  (B) Interim authorities.--If the Comptroller General 
                provides for a delayed effective date under 
                subparagraph (A) with respect to any group of officers 
                or employees, paragraph (2) shall, for purposes of such 
                group, be applied by substituting such date for 
                ``October 1, 2005''.

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 2751, as amended, would provide the U.S. General 
Accounting Office (GAO) with additional human capital 
flexibilities, make permanent the voluntary early retirement 
and buyout authorities granted to the GAO in Public Law 106-
303, the GAO Personnel Flexibilities Act, and change the name 
of the agency to the U.S. Government Accountability Office.

                BACKGROUND AND NEED FOR THE LEGISLATION

    One of the top priorities for the Government Reform 
Committee in the 108th Congress is to advance comprehensive 
civil service reform for the federal government. The current 
system, put in place more than fifty years ago, does not 
adequately address the priorities of a 21st century workforce. 
This legislation builds on the management and human capital 
tools and flexibilities already granted to the GAO. The 
Congress relies on the GAO to support it in meeting its 
constitutional responsibilities and to help improve the 
performance and ensure the accountability of the federal 
government for the American people. Unlike many executive 
branch agencies, which have either recently received or are 
just requesting broad-based human capital tools and 
flexibilities, GAO has had certain human capital tools and 
flexibilities for over two decades. This legislation will 
further GAO's ability to accomplish its mission and meet its 
strategic plan, assure its accountability, and help ensure that 
it can attract, retain, motivate, and reward a top-quality and 
high-performing workforce currently and in future years.
    Until 1980, GAO's personnel system was indistinguishable 
from those of executive branch agencies--that is, GAO was 
subject to the same laws, regulations, and policies governing 
executive branch agencies. With the expansion of GAO's role in 
congressional oversight of federal agencies and programs, 
concerns grew about the potential for conflicts of interest. 
Congress passed the GAO Personnel Act of 1980 (Public Law 96-
191, February 15, 1980) to avoid potential conflicts by making 
GAO's personnel system independent of the executive branch. 
Along with this independence, the Act gave GAO greater 
flexibility in hiring and managing its workforce. Among other 
things, it granted the Comptroller General authority to 
appoint, pay, promote, and assign employees on the basis of 
fitness and merit but without regard to title 5 requirements in 
the areas of pay and classification. Most significantly, the 
Act no longer made GAO subject to the General Schedule pay 
system and authorized the Comptroller General to establish a 
merit pay system for appropriate officers and employees. By 
excepting GAO from the above requirements, the GAO Personnel 
Act of 1980 allowed GAO to pursue some significant innovations 
in managing its people, including the establishment of a 
``broad banding'' or ``pay banding,'' approach for classifying 
and paying its Analyst and Attorney workforce in 1989.
    Given GAO's role as a key provider of information and 
analyses to the Congress, maintaining the right mix of 
technical knowledge and subject matter expertise as well as 
general analytical skills is vital to achieving the agency's 
mission. GAO spends about 80 percent of its resources on its 
people. And yet, like other federal agencies, GAO has faced 
significant human capital challenges--challenges that if not 
effectively addressed, could impair the timeliness and quality 
of its work for its congressional clients and the American 
people they represent. Therefore, in early 2000, GAO sought 
legislation establishing narrowly tailored flexibilities that 
would help to reshape the agency's workforce and recruit and 
retain staff with needed technical skills. With the support of 
the House Committee on Government Reform, Congress passed H.R. 
4642 which became Public Law 106-303 on October 13, 2000. This 
Act provided GAO with new personnel flexibilities and 
authorized the Comptroller General to:
    1. Offer voluntary early retirement to realign the 
workforce to meet budgetary constraints or mission needs; 
correct skill imbalances; or reduce high-grade, managerial, or 
supervisory positions.
    2. Offer separation incentive payments to realign the 
workforce to meet budgetary constraints or mission needs; 
correct skill imbalances; or reduce high-grade, supervisory, or 
managerial positions.
    3. Establish modified regulations for the separation of 
employees during a reduction or other adjustment in force.
    4. Establish senior-level scientific, technical, and 
professional positions and provide those positions with the 
same pay and benefits applicable to the Senior Executive 
Service while remaining within GAO's current allocation of 
super-grade positions.
    5. Renew the appointments of experts and consultants for 
additional terms beyond an initial 3-year term and pay them at 
a rate up to level IV of the Executive Schedule.
    Lastly, the 2000 Act required the Comptroller General to 
report annually on the agency's use of the first three 
authorities and a 3-year assessment of the effectiveness of the 
Act and any suggestions for change.
    GAO issued an assessment of Public Law 106-303 entitled 
``The Role of Personnel Flexibilities in Strengthening GAO's 
Human Capital'' in June 2003 (GAO-03-954SP). It concluded that 
the additional flexibilities authorized in Public Law 106-303 
have helped to ensure that GAO has the right staff, with the 
right skills, in the right locations to better meet the needs 
of the Congress and the American people. We believe that GAO 
has used the narrowly tailored flexibilities granted by the 
Congress in Public Law 106-303 responsibly, prudently, and 
strategically. For this and other reasons, including GAO's 
extensive experience with broad bands and pay for performance 
systems, its human capital infrastructure, and its unique role 
in leading by example in major management areas, we believe 
that additional management flexibilities should be granted to 
GAO.
    This legislation would change existing law by: (1) making 
permanent GAO's 3-year authority to offer voluntary early 
retirement and voluntary separation incentive payments, (2) 
allowing GAO to adjust annually the rates of basic pay on a 
separate basis than the annual adjustment authorized for 
employees of the executive branch, (3) permitting GAO to set 
the pay of an employee demoted as a result of workforce 
restructuring or reclassification at his or her current rate 
with no automatic annual increase to basic pay until his or her 
salary is less than the maximum rate of their new position, (4) 
providing authority in appropriate circumstances to reimburse 
employees for some relocation expenses when that transfer has 
some benefit to GAO, but does not meet the legal requirements 
for reimbursement, (5) providing authority to place key 
officers and employees, as defined by regulations, with fewer 
than 3 years of federal experience in the 6-hour leave 
category, (6) authorizing an executive exchange program with 
the private sector that will sunset after 5 years, (7) changing 
GAO's legal name from the ``General Accounting Office'' to the 
``Government Accountability Office,'' (8) codifying several 
ongoing practices for GAO's Performance Management System 
including, among other things, that there be a link between the 
performance management system and the agency's strategic plan, 
adequate training for all employees in the performance 
management system, and a means to ensure that adequate 
resources are allocated for the performance management system, 
(9) requiring the Comptroller General to consult with 
interested groups or associations that represent GAO employees 
before implementing any of the new flexibilities under the Act; 
and (10) requiring GAO to include in its annual reports to the 
Congress for a 5-year period a summary of all actions taken in 
regard to the new flexibilities provided under sections 2, 3, 
4, 6, 7, 9, and 10 of the legislation as well as a final report 
summarizing the annual reporting data and recommending any 
changes to the legislation.

                          LEGISLATIVE HISTORY

    On July 16, 2003, H.R. 2751 was introduced by subcommittee 
Chairwoman Jo Ann Davis, for herself and full committee 
Chairman Tom Davis. That same day, H.R. 2751 was referred to 
the Government Reform Subcommittee on Civil Service and Agency 
Organization, which Jo Ann Davis chairs. A hearing titled, GAO 
Human Capital Reform: Leading the Way, was held on that same 
day before the Government Reform Subcommittee on Civil Service 
and Agency Organization. The witnesses included the Comptroller 
General of the United States, David M. Walker, Chris Keisling, 
GAO's Employee Advisory Council's representative, Paul Light of 
the Brookings Institution, and Pete Smith of the Private Sector 
Council. At a July 23, 2003, Subcommittee business meeting, 
H.R. 2751 was marked-up, with the adoption of an en bloc 
amendment offered by Congressman Danny Davis by voice vote, and 
reported out of the Subcommittee. On November 6, 2003, the full 
committee held a business meeting, to consider H.R. 2751. The 
committee adopted an amendment in the nature of a substitute 
offered by Jo Ann Davis. The amendment reflected changes 
suggested by Ranking Minority Member Henry Waxman. By voice 
vote, the committee ordered the bill favorably reported to the 
House of Representatives.

                           Section-by-Section


Section 1. Short title; amendment of title 31

    Section 1 of the bill entitles the Act the ``GAO Human 
Capital Reform Act of 2003''.

Section 2. Amendments to Public Law 106-303

    Section 2 of the bill makes permanent the authority of the 
General Accounting Office (GAO) under Public Law 106-303, 
sections 1 and 2, to offer voluntary early retirements and 
voluntary separation payments to certain employees of GAO when 
necessary to realign GAO's workforce in order to meet budgetary 
or mission needs, correct skill imbalances, or reduce high-
grade positions. Originally, these authorities were to lapse on 
December 31, 2003.
    Additionally both sections 1 and 2 are amended by the 
addition of a new provision expressing the ``sense of the 
Congress'' that the implementation of these sections is 
intended to reshape the Office's workforce and not downsize the 
Office. The aforementioned ``sense of the Congress'' language 
is not intended to contradict Section 1 and Section 2 of Public 
Law 106-303. Lastly, in regard to voluntary separation 
payments, a provision has been added to make ineligible for 
this benefit an employee who during the 36-month period 
preceding separation performed services for which a student 
loan repayment benefit was or is to be paid.

Section 3. Annual pay adjustments

    Section 3 enables the Comptroller General to annually 
adjust the pay rates for officers and employees of GAO without 
having to adjust the GAO pay rates at the same time and to the 
same extent as the annual statutory adjustments are made to the 
General Schedule. Subsection (a) accomplishes this for all GAO 
employees other than members of the Senior Executive Service 
(SES) and Senior Level (SL) staff. Subsection (b) accomplishes 
this for members of the SES and SL staff.
    Section 3 enables the Comptroller General to annually 
adjust the pay rates for GAO officers and employees whose 
performance is at a satisfactory level, as defined in advance 
by regulations, after reviewing various factors such as the 
need to protect the purchasing power of employees of the Office 
and pay disparities between GAO employees and private sector 
employees in the local pay areas. In considering certain of 
these factors related to economic data, the data will be 
specifically related to positions at GAO. This section also 
enables the Comptroller General to determine what other 
factors, such as the overall agency performance and funding 
levels, would be relevant to adjusting pay rates for GAO 
officers and employees. Methodologies to support the 
compensation of employees would be developed only after 
consultation with the Employee Advisory Council and Managing 
Directors, and employees would be given the opportunity for 
notice and comment to any regulations promulgated to implement 
this provision.
    Section 3 is designed, among other reasons, to afford 
additional flexibility to the Comptroller General to increase 
the amount of merit or performance-based compensation that 
could be provided to reward employees at different rates, based 
on their knowledge, skills, position, and performance rather 
than on the passage of time, the rate of inflation and 
geographic location. The funds made available from the annual 
adjustments that would not be paid to GAO staff who are rated 
as performing at a below satisfactory level would be applied 
towards performance-based compensation. Additionally, this 
would be accomplished in certain years by increasing the 
funding for performance-based compensation, the amounts of 
which can vary by performance category. At the same time, 
employees could receive less annual across the board base pay 
increases than they would receive under the existing law. 
However, for some employees increases in performance-based 
compensation would make up for this loss.

Section 4. Pay retention

    Section 4 deletes the requirement that GAO provide grade 
and pay retention consistent with the statutory provisions in 
subchapter VI of chapter 53 of title 5, United States Code. The 
passage of this provision will enable employees who are demoted 
due to a reduction-in-force, other adjustment-in-force, 
reclassification or other specified reasons as determined by 
the Comptroller General to be placed immediately in a lower 
grade or band but their pay would not be reduced if it exceeds 
the maximum rate of the new band or grade. However, these 
employees would not be eligible for increases to their basic 
pay as long as their basic pay is at or exceeds the maximum 
rate of the band or grade into which they are placed. Under the 
chapter 53 provisions, employees who suffer a loss of grade or 
band due to, among other things, reduction-in-force procedures 
or reclassification receive full statutory increases for 2 
years and then receive 50 percent of the statutory pay 
increases until the pay of their new position falls within the 
range of pay for that position. Essentially, this antiquated 
system allows employees for extended periods of time to 
fundamentally be paid at a rate that exceeds the value of the 
duties that they are performing. Such provisions are 
inconsistent with the merit principle that there should be 
equal pay for equal work. This section allows the Comptroller 
General to immediately place employees in the band or grade 
that is commensurate with the roles and responsibilities of 
their positions. At the same time, the Comptroller General 
could not reduce the basic pay of employees whose basic pay 
exceeds the maximum rate of the grade or band in which the 
employees are placed. The employees would retain this rate, 
without receiving any increases to basic permanent pay, until 
their basic pay was less than the maximum for their grade or 
band. These employees, however, could be eligible for 
performance awards. As with section 3, this provision would be 
implemented only after consultation with the Employee Advisory 
Council and Managing Directors and opportunity for notice and 
comment by employees to any pay retention regulations.

Section 5. Relocation benefits

    Section 5 gives the Comptroller General the ability to 
provide employees who relocate but do not qualify for the 
relocation benefits set forth in subchapter II of chapter 57 of 
title 5, United States Code, some relief from the high costs of 
relocating if the Comptroller General determines that the 
transfer giving rise to such relocation is of sufficient 
benefit or value to GAO to justify relief. Presently, employees 
whose transfer is deemed to be in the interest of the 
Government are reimbursed for most of their costs (i.e. travel 
expenses, real estate expenses, moving expenses, and other 
related expenses) while employees who are not eligible receive 
no reimbursements even though their transfer may be of some 
benefit or value to the agency. This provision allows the 
Comptroller General to promulgate regulations permitting 
employees who would otherwise not receive any reimbursement for 
their relocation costs to receive a portion of such costs in 
appropriate circumstances.

Section 6. Increased annual leave for key employees

    Section 6 allows the Comptroller General to provide 160 
hours of annual leave to key officers and employees, as defined 
by regulations, who have less than 3 years of Federal service. 
Under the annual leave provision in section 6303 of title 5, 
United States Code, employees earn annual leave based on 
Federal years of service. Until an employee has 3 years of 
service, the employee earns 104 hours (13 days) of annual leave 
in a year. Between 3 and 15 years, the employee earns 160 hours 
(20 days) of annual leave in a year. By increasing the annual 
leave that certain newly hired officers and employees may earn, 
this provision is designed to attract and retain highly skilled 
employees needed to best serve the Congress and the country.

Section 7. Executive exchange program

    Section 7 establishes an executive exchange program for 
GAO. Under this program employees from GAO may work in the 
private sector, and private sector employees may work at GAO. 
This section is based on the existing Information Technology 
Exchange Program in chapter 37 of title 5, United States Code. 
Section 7 makes all private sector participants subject to the 
same laws that are applicable to the participants in the 
Information Technology Exchange Program, relating to such 
matter as conflict of interest and financial disclosure. For 
the other aspects of the program, the Comptroller General will 
promulgate regulations that are consistent with most of the 
provisions in chapter 37. However, some of the provisions of 
the Information Technology Exchange Program (ITEP) would not be 
relevant to GAO's program because ITEP involves technology 
exchanges, whereas GAO's exchange program will cover not only 
those who work in the field of information technology but also 
accountants, economists, lawyers, actuaries, and other highly 
skilled professionals.
    In this regard, GAO's regulations are required to be 
consistent with the general provisions in section 3702 
concerning agreements, termination and duration of assignments. 
Nevertheless, the definitional provision at section 3701 does 
not apply to GAO and GAO's regulations need not be consistent 
with subsections (a), (e) and (f) of section 3702, as they 
specifically concern matters that relate to a technology 
exchange program. Section 3703 sets out the rules relative to 
the assignment of employees to private sector organizations. 
This subsection would apply to GAO's program, except for 
subsection (e), which covers matters related to small business 
concerns and is not relevant to the GAO program. Section 3704 
sets out the rules relative to assignment of employees from 
private sector organizations and would be applicable to the GAO 
program, except for the provision regarding regulations 
prescribed by the President. Under this section, private sector 
participants would receive their salary and benefits from their 
employers and GAO need not contribute to these costs. Section 
3705, which concerns the Office of the Chief Technology Officer 
of the District of Columbia, is not applicable to the GAO 
program. In addition, the reporting requirements of the Office 
of Personnel Management in section 3706 will not cover GAO.
    The number of GAO employees participating in the program is 
limited to no more than 15 at any one time. Prior to approving 
the assignment of an employee to a private sector organization, 
the Comptroller General must determine that the assignment is 
an effective use of the Office's funds, taking into account the 
best interests of the Office and the costs and benefits of 
alternate methods to accomplish the same results and objects. 
For private sector employees, there is a limit of 30 
individuals who may participate at any one time. Lastly, the 
program has a sunset provision that disallows the commencement 
of assignments under the program 5 years after the enactment of 
this provision.

Section 8. Redesignation

    Section 8 of the bill changes the name of the General 
Accounting Office to the Government Accountability Office to 
more accurately reflect the current mission of GAO and assist 
the agency in its recruiting and public communication efforts. 
While the U.S. General Accounting Office may be reflective of 
the agency's role in its initial decades of existence, it is 
not reflective of the modern agency. The modern agency is 
focused on improving the performance and assuring the 
accountability of the federal government for the benefit of the 
American people. Importantly, although the name has been 
changed, the well-known acronym for the agency, ``GAO'', 
remains the same.

Section 9. Performance management system

    Section 9 amends section 732(d)(1) of title 31 by retaining 
the provision that the GAO performance management system must 
meet the requirements of section 4302 of title 5 and including 
several additional practices, as defined in advance by 
regulations, to assure an effective system. These practices 
include, among other things, that there be a link between the 
performance management system and agency's strategic plan, 
adequate training for all employees in the performance 
management system, and a means to ensure that adequate 
resources are allocated for the performance management system.

Section 10. Consultation

    Section 10 requires that before the implementation of any 
changes authorized under the Act, the Comptroller General will 
consult with interested groups or associations that represent 
GAO employees.

Section 11. Reporting requirements

    Section 11 adds reporting requirements. Annually, the 
Comptroller General reports to the Congress under section 
719(a) of title 31. For a 5-year period beginning on the date 
of enactment of the Act, the annual report will summarize all 
actions taken under section 2, 3, 4, 6, 7, 9, and 10 of the 
Act. Additionally, this section requires specific information 
to be included in the report for certain provisions, such as 
the number of employees separating under section 2, receiving 
pay retention under section 4, and engaging in the Executive 
Exchange Program under section 7. Furthermore, the report must 
describe certain actions with regard to the pay adjustments 
under the Act including the methodology applied, the amount of 
the annual pay adjustments, and any extraordinary economic 
conditions or significant budget constraints that significantly 
impacted on the determination of the adjustments. Even after 
the 5-year period has expired, the Comptroller General must 
include in the annual report a description of extraordinary 
economic conditions or serious budget constraints if these 
significantly impacted on the annual adjustments.
    This section also requires a final report not later than 6 
years after the enactment of the Act, which summarizes the 
information included for the prior 5 years in the annual report 
regarding this Act, makes recommendations for any changes to 
sections 2, 3, 4, 6, 7, 9, and 10, and includes any assessment 
of the GAO Personnel Appeals Board or interested groups 
representing employees.

Section 12. Technical amendment

    Section 12 is a technical amendment correcting a reference 
in subsection 732(h)(3)(A) of title 31, so that the existing 
term ``reduction force'' is changed to ``reduction in force''.

Section 13. Effective dates

    Section 13 provides that the effective date of the Act will 
be the date of passage except for sections 3 and 4 that concern 
annual adjustments to the pay rates for GAO employees. These 
provisions are effective for any pay adjustments on or after 
October 1, 2005, and until then, with two exceptions, the 
existing statutory provisions will be in effect. The first 
exception gives the Comptroller General the authority to 
prescribe regulations that would immediately preclude employees 
who are not performing at a satisfactory level from receiving 
the annual adjustment to the pay rates, instead of having to 
wait until section 4 is effective. The second exception 
authorizes the Comptroller General to prescribe regulations 
that would enable him to give less than the full amount of the 
adjustments under existing law, if the agency encounters 
serious budget constraints or extraordinary economic 
conditions. However, the Comptroller General may delay the 
implementation of sections 3 and 4 for groups of employees if 
he deems this appropriate.

                       Explanation of Amendments

    The provisions of the substitute are explained in this 
report.

                        Committee Consideration

    On November 6, 2003, the Committee met in open session and 
ordered reported favorably the bill, H.R. 2751, as amended, by 
voice vote.

                             Rollcall Votes

    No rollcall votes were held.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill provides the U.S. General Accounting Office 
with additional human capital flexibilities, make permanent the 
voluntary early retirement and buyout authorities granted to 
the GAO in Public Law 106-303, the GAO Personnel Flexibilities 
Act, and change the name of the agency to the U.S. Government 
Accountability Office. Because the GAO is a legislative branch 
agency, the employment provisions of this bill apply to 
legislative branch employees who are employed by GAO. This bill 
does not apply to other legislative branch employees.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(2) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    Because this bill does not authorize funding, a statement 
of general performance goals pursuant to clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives is not 
required.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 2751. The constitutional authority to set the 
terms and conditions of legislative branch employees and to 
rename a legislative branch agency is part of the general 
legislative authority granted to Congress under Article I.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4) requires a statement whether 
the provisions of the reported include unfunded mandates. In 
compliance with this requirement the Committee has received a 
letter from the Congressional Budget Office included herein.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2751. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 2751 from the Director of 
Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 12, 2003.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2751, the GAO 
Human Capital Reform Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 2751--GAO Human Capital Reform Act of 2003

    Summary: H.R. 2751 would authorize the General Accounting 
Office (GAO) to modify its personnel and workforce practices to 
allow greater flexibility in determining pay increases, pay 
retention rules, and other compensation matters. The bill also 
would permanently extend GAO's authority to offer separation 
(buyout) payments and early retirement to employees who 
voluntarily leave GAO. Finally, H.R. 2751 would rename GAO as 
the Government Accountability Office.
    GAO estimates that enacting H.R. 2751 would increase direct 
spending for retirement annuities and related health benefits 
by about $1 million in fiscal year 2004, by $19 million over 
the 2004-2008 period, and by $40 million over the 2004-2013 
period. Several provisions of the bill could affect GAO 
employee compensation costs, but the net budgetary effect of 
such provisions would depend on how GAO exercises its new 
authorities and on whether future agency appropriations are 
adjusted to reflect any savings or costs. Finally, we expect 
that any additional discretionary costs associated with 
changing the agency's name would not be significant.
    H.R. 2751 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
impact of H.R. 2751 on direct spending is shown in the 
following table. The costs of this legislation fall within 
budget function 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2004    2005    2006    2007    2008    2009    2010    2011    2012    2013
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING
 Estimated budget authority......       1       3       5       5       5       5       4       4       4       4
Estimated outlays...............       1       3       5       5       5       5       4       4       4       4
----------------------------------------------------------------------------------------------------------------

Basis of estimate

            Direct spending
    H.R. 2751 would give GAO permanent authority to offer 
retirement to employees who voluntarily leave the agency early. 
GAO's existing buyout authority, which will expire on December 
31, 2003, allows the agency to offer certain employees a lump 
sum payment of up to $25,000 to voluntarily leave the agency. 
In addition, certain qualified employees who leave (whether 
they collect a separation payment or not) are entitled to 
receive immediate retirement annuities earlier than they would 
have otherwise. CBO estimates that extending this authority 
would increase direct spending by $1 million in 2004, by $19 
million over the 2004-2008 period, and by $40 million over the 
2004-2013 period.
    Based on information provided by GAO about use of its early 
retirement authority over the past several years, CBO estimates 
that each year about 35 agency employees would begin receiving 
retirement benefits three years earlier than they would have 
under current law. Inducing some employees to retire early 
results in higher-than-expected benefits from the Civil Service 
Retirement and Disability Fund (CSRDF). CBO estimates that the 
additional retirement benefits would increase direct spending 
by $1 million in 2004, by $16 million over the 2004-2008 
period, and by $32 million over the 2004-2013 period.
    Extending GAO's buyout and early retirement authority also 
would increase direct spending for federal retiree health 
benefits. Many employees who retire early would continue to be 
eligible for coverage under the Federal Employees' Health 
Benefits (FEHB) program. The government's share of the premium 
for retirees is classified as mandatory spending. Because many 
of those accepting the buyouts under the bill would have 
retired later under current law, mandatory spending on FEHB 
premiums would increase. CBO estimates these additional 
benefits would increase direct spending by less than $500,000 
in 2004, by $3 million over the 2004-2008 period, and by $8 
million over the 2004-2013 period.
            Spending subject to appropriation
    The authorities provided by H.R. 2751 would allow GAO to 
create a performance-based employee compensation system to 
govern basic pay adjustments, pay retention for employees 
affected by reductions in force, relocation reimbursements, and 
annual leave accruals beginning in fiscal year 2006. (Under 
existing law, GAO is required to follow personnel management 
policies determined by the Office of Personnel Management.) 
Implementing the new authorities that would be provided by the 
bill could affect GAO's total costs of providing employee 
compensation, but CBO cannot predict any cost or saving 
associated with these new authorities, or the net effect of all 
such changes on the federal budget. Ultimately, the net 
budgetary effect of the proposed authorities would depend on 
the features of the compensation system adopted by GAO and on 
how the agency applies that new system to individual employees. 
Moreover, any savings or costs would only be realized if the 
agency's annual appropriations are adjusted accordingly.
    Providing GAO with the option of providing voluntary 
separation payments could also increase GAO's costs, but CBO 
estimates that any new costs would average less than $500,000 
annually over the 2004-2013 period. Section 2 of the bill would 
allow GAO to offer certain employees payments of up to $25,000 
to voluntarily leave the agency. The buyout program also 
requires that GAO make a deposit amounting to 45 percent of 
each buyout recipient's basic salary toward the CSRDF. Unlike 
an increase in retirement benefits, these two payments would be 
from the agency's discretionary budget and are thus subject to 
appropriation. Since GAO's current buyout authority was first 
authorized in October 2000, no one at the agency has received a 
buyout payment. CBO therefore expects that relatively few 
employees would receive a buyout payment over the next 10 years 
and that the cost of any buyout payments and required deposits 
toward the CSRDF would be negligible in any given year.
    Intergovernmental and private-sector impact: H.R. 2751 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO cost estimate: On November 4, 2003, CBO 
transmitted a cost estimate for S. 1522, the GAO Human Capital 
Reform Act of 2003, as ordered reported on October 22, 2003, by 
the Senate Committee on Governmental Affairs. S. 1522 and H.R. 
2751 are very similar, and their estimated costs are the same.
    Estimate prepared by: Federal Costs: Ellen Hays, Geoffrey 
Gerhardt, and Deborah Reis. Impact on State, Local, and Tribal 
Governments: Sarah Puro. Impact on the Private Sector: Selena 
Caldera.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                        ACT OF OCTOBER 13, 2000

                          (Public Law 106-303)

 AN ACT To make certain personnel flexibilities available with respect 
       to the General Accounting Office, and for other purposes.

SECTION 1. VOLUNTARY EARLY RETIREMENT AUTHORITY.

  (a) Civil Service Retirement System.--Effective [for purposes 
of the period beginning on the date of the enactment of this 
Act and ending on December 31, 2003] October 13, 2000, 
paragraph (2) of section 8336(d) of title 5, United States 
Code, shall, with respect to officers and employees of the 
General Accounting Office, be applied as if it had been amended 
to read as follows:
          ``(2)(A) * * *

           *       *       *       *       *       *       *

  (b) Federal Employees' Retirement System.--Effective [for 
purposes of the period beginning on the date of the enactment 
of this Act and ending on December 31, 2003] October 13, 2000, 
subparagraph (B) of section 8414(b)(1) of title 5, United 
States Code, shall, with respect to officers and employees of 
the General Accounting Office, be applied as if it had been 
amended to read as follows:
          ``(B)(i) * * *

           *       *       *       *       *       *       *

  (e) Sense of Congress.--It is the sense of Congress that the 
implementation of this section is intended to reshape the 
General Accounting Office workforce and not downsize the 
General Accounting Office workforce.

           *       *       *       *       *       *       *


SEC. 2. VOLUNTARY SEPARATION INCENTIVE PAYMENTS.

  (a) In General.--Effective [for purposes of the period 
beginning on the date of the enactment of this Act and ending 
on December 31, 2003] October 13, 2000, the authority to 
provide voluntary separation incentive payments shall be 
available to the Comptroller General with respect to employees 
of the General Accounting Office.
  (b) Terms and Conditions.--The authority to provide voluntary 
separation incentive payments under this section shall be 
available in accordance with the provisions of subsections 
(a)(2)-(e) of section 663 of the Treasury, Postal Service, and 
General Government Appropriations Act, 1997, as contained in 
Public Law 104-208 (5 U.S.C. 5597 note), except that--
          (1) * * *
          [(2) subsection (a)(2)(G) of such section shall be 
        applied by construing the citations therein to be 
        references to the appropriate authorities in connection 
        with employees of the General Accounting Office;]
          (2) subsection (a)(2)(G) of such section shall be 
        applied--
                  (A) by construing the citations therein to be 
                references to the appropriate authorities in 
                connection with employees of the General 
                Accounting Office; and
                  (B) by deeming such subsection to be amended 
                by striking ``Code.'' and inserting ``Code, or 
                who, during the thirty-six month period 
                preceding the date of separation, performed 
                service for which a student loan repayment 
                benefit was or is to be paid under section 5379 
                of title 5, United States Code.'';

           *       *       *       *       *       *       *

  (g) Sense of Congress.--It is the sense of Congress that the 
implementation of this section is intended to reshape the 
General Accounting Office workforce and not downsize the 
General Accounting Office workforce.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *


SUBTITLE I--GENERAL

           *       *       *       *       *       *       *


                  CHAPTER 7--GENERAL ACCOUNTING OFFICE

SUBCHAPTER III--PERSONNEL

           *       *       *       *       *       *       *


Sec. 731. General

  (a)  * * *

           *       *       *       *       *       *       *

  (f) The Comptroller General shall prescribe regulations under 
which officers and employees of the Office may, in appropriate 
circumstances, be reimbursed for any relocation expenses under 
subchapter II of chapter 57 of title 5 for which they would not 
otherwise be eligible, but only if the Comptroller General 
determines that the transfer giving rise to such relocation is 
of sufficient benefit or value to the Office to justify such 
reimbursement.
  (g) The Comptroller General shall prescribe regulations under 
which key officers and employees of the Office who have less 
than 3 years of service may accrue leave in accordance with 
section 6303(a)(2) of title 5, in those circumstances in which 
the Comptroller General has determined such increased annual 
leave is appropriate for the recruitment or retention of such 
officers and employees. Such regulations shall define key 
officers and employees and set forth the factors in determining 
which officers and employees should be allowed to accrue leave 
in accordance with this subsection.
  (h) The Comptroller General may by regulation establish an 
executive exchange program under which officers and employees 
of the Office may be assigned to private sector organizations, 
and employees of private sector organizations may be assigned 
to the Office, to further the institutional interests of the 
Office or Congress, including for the purpose of providing 
training to officers and employees of the Office. Regulations 
to carry out any such program--
          (1) shall include provisions (consistent with 
        sections 3702 through 3704 of title 5) as to matters 
        concerning--
                  (A) the duration and termination of 
                assignments;
                  (B) reimbursements; and
                  (C) status, entitlements, benefits, and 
                obligations of program participants;
          (2) shall limit--
                  (A) the number of officers and employees who 
                are assigned to private sector organizations at 
                any one time to not more than 15; and
                  (B) the number of employees from private 
                sector organizations who are assigned to the 
                Office at any one time to not more than 30;
          (3) shall require that an employee of a private 
        sector organization assigned to the Office may not have 
        access to any trade secrets or to any other nonpublic 
        information which is of commercial value to the private 
        sector organization from which such employee is 
        assigned;
          (4) shall require that, before approving the 
        assignment of an officer or employee to a private 
        sector organization, the Comptroller General shall 
        determine that the assignment is an effective use of 
        the Office's funds, taking into account the best 
        interests of the Office and the costs and benefits of 
        alternative methods of achieving the same results and 
        objectives; and
          (5) shall not allow any assignment under this 
        subsection to commence after the end of the 5-year 
        period beginning on the date of the enactment of this 
        subsection.
  (i) An employee of a private sector organization assigned to 
the Office under the executive exchange program shall be 
considered to be an employee of the Office for purposes of--
          (1) chapter 73 of title 5;
          (2) sections 201, 203, 205, 207, 208, 209, 603, 606, 
        607, 643, 654, 1905, and 1913 of title 18;
          (3) sections 1343, 1344, and 1349(b) of this title;
          (4) chapter 171 of title 28 (commonly referred to as 
        the Federal ``Tort Claims Act'') and any other Federal 
        tort liability statute;
          (5) the Ethics in Government Act of 1978 (5 U.S.C. 
        App.);
          (6) section 1043 of the Internal Revenue Code of 
        1986; and
          (7) section 27 of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 423).

Sec. 732. Personnel management system

  (a)  * * *
  (b) The personnel management system shall--
          (1)  * * *

           *       *       *       *       *       *       *

          (6) provide that the Comptroller General shall fix 
        the basic pay of officers and employees of the Office 
        not fixed by law, consistent with section 5301 of 
        [title 5.] title 5, except as provided under subsection 
        (c)(3) of this section and section 733(a)(3)(B) of this 
        title.
  (c) Under the personnel management system--
          (1)  * * *

           *       *       *       *       *       *       *

          [(3) except as provided under section 733(a)(3)(B) of 
        this title or section 5349(a) of title 5, basic pay 
        rates of officers and employees of the Office shall be 
        adjusted at the same time and to the same extent as 
        basic pay rates of the General Schedule are adjusted;]
          (3) except as provided under section 733(a)(3)(B) of 
        this title, basic rates of officers and employees of 
        the Office shall be adjusted annually to such extent as 
        determined by the Comptroller General, and in making 
        that determination the Comptroller General shall 
        consider--
                  (A) the principle that equal pay should be 
                provided for work of equal value within each 
                local pay area;
                  (B) the need to protect the purchasing power 
                of officers and employees of the Office, taking 
                into consideration the Consumer Price Index or 
                other appropriate indices;
                  (C) any existing pay disparities between 
                officers and employees of the Office and non-
                Federal employees in each local pay area;
                  (D) the pay rates for the same levels of work 
                for officers and employees of the Office and 
                non-Federal employees in each local pay area;
                  (E) the appropriate distribution of agency 
                funds between annual adjustments under this 
                section and performance-based compensation; and
                  (F) such other criteria as the Comptroller 
                General considers appropriate, including, but 
                not limited to, the funding level for the 
                Office, amounts allocated for performance-based 
                compensation, and the extent to which the 
                Office is succeeding in fulfilling its mission 
                and accomplishing its strategic plan;
        notwithstanding any other provision of this paragraph, 
        an adjustment under this paragraph shall not be applied 
        in the case of any officer or employee whose 
        performance is not at a satisfactory level, as 
        determined by the Comptroller General for purposes of 
        such adjustment;

           *       *       *       *       *       *       *

          [(5) officers and employees of the Office are 
        entitled to grade and basic pay retention consistent 
        with subchapter VI of chapter 53 of title 5.]
          (5) the Comptroller General shall prescribe 
        regulations under which an officer or employee of the 
        Office shall be entitled to pay retention if, as a 
        result of any reduction-in-force or other workforce 
        adjustment procedure, position reclassification, or 
        other appropriate circumstances as determined by the 
        Comptroller General, such officer or employee is placed 
        in or holds a position in a lower grade or band with a 
        maximum rate of basic pay that is less than the rate of 
        basic pay payable to the officer or employee 
        immediately before the reduction in grade or band; such 
        regulations--
                  (A) shall provide that the officer or 
                employee shall be entitled to continue 
                receiving the rate of basic pay that was 
                payable to the officer or employee immediately 
                before the reduction in grade or band until 
                such time as the retained rate becomes less 
                than the maximum rate for the grade or band of 
                the position held by such officer or employee; 
                and
                  (B) shall include provisions relating to the 
                minimum period of time for which an officer or 
                employee must have served or for which the 
                position must have been classified at the 
                higher grade or band in order for pay retention 
                to apply, the events that terminate the right 
                to pay retention (apart from the one described 
                in subparagraph (A)), and exclusions based on 
                the nature of an appointment; in prescribing 
                regulations under this subparagraph, the 
                Comptroller General shall be guided by the 
                provisions of sections 5362 and 5363 of title 
                5.
  (d) The personnel management system shall provide--
          [(1) for a system to appraise the performance of 
        officers and employees of the General Accounting Office 
        that meets the requirements of section 4302 of title 
        5;]
          (1) for a system to appraise the performance of 
        officers and employees of the General Accounting Office 
        that meets the requirements of section 4302 of title 5 
        and in addition includes--
                  (A) a link between the performance management 
                system and the agency's strategic plan;
                  (B) adequate training and retraining for 
                supervisors, managers, and employees in the 
                implementation and operation of the performance 
                management system;
                  (C) a process for ensuring ongoing 
                performance feedback and dialogue between 
                supervisors, managers, and employees throughout 
                the appraisal period and setting timetables for 
                review;
                  (D) effective transparency and accountability 
                measures to ensure that the management of the 
                system is fair, credible, and equitable, 
                including appropriate independent 
                reasonableness, reviews, internal assessments, 
                and employee surveys; and
                  (E) a means to ensure that adequate agency 
                resources are allocated for the design, 
                implementation, and administration of the 
                performance management system;

           *       *       *       *       *       *       *

  (h)(1)  * * *

           *       *       *       *       *       *       *

  (3)(A) Except as provided in subparagraph (B), an employee 
may not be released, due to a [reduction force] reduction in 
force, unless such employee is given written notice at least 60 
days before such employee is so released. Such notice shall 
include--

           *       *       *       *       *       *       *


Sec. 733. Senior Executive Service

  (a) The Comptroller General may establish a General 
Accounting Officer Senior Executive Service--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) providing rates of basic pay--
                  (A)  * * *
                  [(B) adjusted as the same time and to the 
                same extent as rates in the Senior Executive 
                Service under section 5382 of title 5 are 
                adjusted;]
                  (B) adjusted annually by the Comptroller 
                General after taking into consideration the 
                factors listed under section 732(c)(3) of this 
                title, except that an adjustment under this 
                subparagraph shall not be applied in the case 
                of any officer or employee whose performance is 
                not at a satisfactory level, as determined by 
                the Comptroller General for purposes of such 
                adjustment;

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    In general, we believe that civil service reform is best 
pursued on a government-wide basis, not an agency-by-agency 
basis. A piecemeal approach has the effect of creating a hodge-
podge of personnel systems, which limits the mobility of 
employees and increases the potential for unfair treatment. 
Nevertheless, Comptroller General David M. Walker made a strong 
case for why GAO should be granted the personnel flexibilities 
in H.R. 2751. On that basis, we support the bill. We are 
writing to highlight several provisions in the bill.
    Section 3 gives the Comptroller General discretion over 
annual pay raises for GAO employees. Mr. Walker has assured GAO 
employees that anyone performing satisfactory work will receive 
at least a cost of living adjustment. Mr. Walker also has 
assured this Committee that he will provide annual reporting on 
the size of pay raises given to minorities, women, and 
veterans. (A copy of Mr. Walker's letter is attached.) In the 
past, these groups have received lower appraisal ratings than 
the employee population as a whole. Although we support the 
flexibility that Mr. Walker has requested, we want all GAO 
employees to know that we will be vigilant in monitoring the 
use of this pay flexibility.
    As originally drafted, Section 6 gave GAO the authority to 
provide increased annual leave, based on other relevant work 
experience, only to upper-level employees. At the subcommittee 
markup, Representative Danny Davis offered an amendment, which 
was adopted, to ensure that increased annual leave could be 
offered to all GAO employees, thus ensuring that supervisors 
and managers were not the sole beneficiaries of these 
flexibilities.
    Section 7 relates to employee exchanges with private sector 
companies. In general, we are skeptical about the 
appropriateness of using taxpayer dollars to pay for federal 
employees to work for private sector companies. However, Mr. 
Walker and his staff worked to modify this provision to address 
our concerns. The number of GAO employees who could participate 
in such exchanges was decreased from 30 to 15. The provision 
was clarified to ensure that private sector employees will be 
subject to federal ethics laws and will not have access to 
trade secrets. Language was added to ensure that any exchanges 
must be an effective use of GAO's resources. Finally, GAO's 
authority to engage in such programs sunsets after five years.
    At the subcommittee markup, Representative Danny Davis 
offered an amendment, which was approved, to add a reporting 
requirement to the bill. This provision (section 11) requires 
GAO to submit annual reports to Congress, detailing its use of 
the flexibilities in the bill. This reporting requirement is 
necessary for Congress to fulfill its oversight 
responsibilities.
    In sum, the inclusion of the minority during the 
consideration of this bill has made this a better bill and 
demonstrates the benefits of a collaborative approach to 
legislation.

                                   Henry A. Waxman.
                                   Edolphus Towns.
                                   Paul E. Kanjorski.
                                   Carolyn B. Maloney.
                                   Elijah E. Cummings.
                                   Dennis J. Kucinich.
                                   Danny K. Davis.
                                   Wm. Lacy Clay.
                                   Diane E. Watson.
                                   Stephen F. Lynch.
                                ------                                

                                 General Accounting Office,
                                     Washington, DC, July 28, 2003.
Subject: GAO Human Capital Reform Act of 2003.

Hon. Jo Ann Davis,
Chairwoman,
Hon. Danny Davis,
Ranking Minority Member,
Subcommittee on Civil Service and Agency Reorganization, Committee on 
        Government Reform, House of Representatives.
    At the July 23, 2003, markup of H.R. 2751, the ``GAO Human 
Capital Reform Act of 2003'', by the Subcommittee on Civil 
Service and Agency Organization, Ranking Minority Member Danny 
Davis offered an amendment which would require GAO to submit 
annual reports to the Congress, detailing its use of numerous 
flexibilities provided in the bill. Although Representative 
Davis had originally planned to require GAO to report 
information on its annual pay adjustments with respect to sex, 
race and veteran's status, he did not do so. Instead he 
indicated that, based on assurances from me that I would be 
willing to provide this information in a non-public document 
annually to the Subcommittee, he would not offer the amendment.
    This letter is to confirm that I will provide the data 
privately to the Subcommittee for the period covered by the 
amendment for reporting on the annual pay adjustments, i.e., 
during the five-year period beginning on the date of enactment 
of the Act but after the close of fiscal year 2006. This 
arrangement will assist in providing reasonable transparency 
and appropriate accountability to the members of the 
Subcommittee on the decisions I make with respect to the annual 
pay adjustment provision of the bill but will not require that 
this information be made a part of the public record.
    As you know, we already provide this type information to 
our democratically elected Employee Advisory Council (EAC). In 
addition, we provide certain summary data to all GAO employees. 
As a result, I have no problem providing this information to 
the Subcommittee. At the same time, I am opposed to providing 
such information in a public document since, in my view, it 
would be excessive, potentially counter-productive and far 
beyond any requirement imposed on other federal agencies. If 
you or your staff have any questions about this issue, please 
contact me at (202) 512-5500 or Managing Associate General 
Counsel, Legal Services & Ethics, Joan M. Hollenbach at (202) 
512-8404.
    Thank you for your interest and efforts in connection with 
the GAO Human Capital Reform Act of 2003. I look forward to 
continuing to work together on issues of mutual interest and 
concern in the future.
            Sincerely, yours,
                                           David M. Walker,
                          Comptroller General of the United States.

                                
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