[Federal Register Volume 64, Number 146 (Friday, July 30, 1999)]
[Proposed Rules]
[Pages 41334-41336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19487]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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  Federal Register / Vol. 64, No. 146 / Friday, July 30, 1999 / 
Proposed Rules  

[[Page 41334]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 317

RIN 3206-AI75


Employment in the Senior Executive Service

AGENCY: Office of Personnel Management.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is proposing to amend 
its regulations governing career and limited appointments to the Senior 
Executive Service (SES) and Qualifications Review Board (QRB) 
certification. The proposed regulations emphasize the importance of 
executive leadership qualifications in agency SES selection criteria; 
strengthen merit principles; increase SES staffing flexibilities to 
help agencies recruit the brightest and most diverse executive cadre 
possible; and provide for delegating QRB administration to agencies via 
individual delegation agreements. In addition, there will be procedural 
modifications to streamline the SES application process, reduce 
paperwork requirements, and improve the QRB certification process.

DATES: Comments on the proposed regulations must be received on or 
before September 28, 1999.

ADDRESS: Send or deliver written comments to Ms. Joyce Edwards, 
Director, Office of Executive Resources Management, Room 6484, 1900 E 
Street NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Marcia K. Staten at 202-606-1832, FAX 
202-606-2126, or email to [email protected].

SUPPLEMENTARY INFORMATION: The success of the Senior Executive Service 
(SES) rests in the ability of agencies to employ highly competent, 
motivated, and diverse professionals dedicated to public service with 
the requisite leadership expertise to meet the challenges facing the 
Government and the Nation into the next century.
    In April 1998, OPM widely circulated a ``Draft Framework for 
Improving the Senior Executive Service'' to focus attention on the 
importance of executive leadership and to stimulate discussion about 
the SES. OPM wanted stakeholders to think about whether the way the 
senior executive cadre is selected, developed, and managed today will 
produce the kind of executives equipped to meet the leadership 
challenges of the 21st century. The Framework was an outline of ideas 
in four broad areas: SES structure, staffing flexibility, performance 
management and accountability, and development and continuing learning.
    From April through November, OPM held briefings and discussions 
with nearly 40 different groups of stakeholders, including senior 
executives and candidates, the human resources community, public 
administration organizations, and professional associations. OPM also 
received over 50 written comments from departments and agencies, 
individual executives and other interested persons, and various 
organizations. Although stakeholder views varied widely, there was 
consensus on many ideas, including increasing agency flexibility for 
SES staffing. Specifically, there was general support for improving the 
SES selection process to ensure that leadership and executive 
qualifications are the major selection criteria, reducing the paperwork 
burden on applicants and agencies, considering options for delegating 
QRB administration, and increasing agency authority to make limited 
term appointments.
    OPM formed a work group of agency human resources professionals, 
who administer executive resources programs, to help identify solutions 
to the staffing issues raised by the Framework initiative. OPM also 
sought the views of senior executives who have served as members of 
QRBs. Some solutions will require changes to OPM regulations, while 
others may be accomplished administratively through procedural or 
process changes. These regulatory proposals are the result of the 
comments and suggestions from the senior executives and the work group. 
The proposed regulations require agency selection criteria to address 
executive leadership expertise, provide for delegating QRB 
administration on an agency-by-agency basis via written delegation 
agreements, clarify current restrictions on converting noncareer 
appointees in their current or successor positions, increase agency 
focus on performance during the probationary period, and expand the 
pool of limited appointment authorities currently delegated to 
agencies.
    In addition to the improvements achieved through regulatory change, 
OPM will make modifications to internal procedures and other 
requirements to streamline the SES application process, reduce 
paperwork requirements, and improve the QRB certification process. 
These modifications will include alternative methods for documenting 
executive qualifications for presentation to QRBs, improved guidance 
and instructions to QRBs to ensure that members fully understand their 
role and responsibilities, and more specific and detailed feedback to 
agencies on QRB disapprovals.
    These flexibilities were designed to facilitate agency efforts to 
hire a diverse and talented cadre of senior executives.

Emphasis on Executive Leadership

    The law at 5 U.S.C. 3393 requires agency Executive Resources Boards 
to conduct the merit staffing process for career entry into the SES, 
including reviewing the executive qualifications of each career SES 
candidate. During the discussions of the Framework on improving the 
SES, it was confirmed that, in many agencies, the selection criteria 
focus primarily on candidates' professional or technical 
qualifications, and therefore consideration of executive qualifications 
is not getting the full attention intended by the legislation. The key 
characteristics of an SES position are the executive leadership 
responsibilities, and therefore selection criteria should focus 
primarily on these qualifications. In order to strengthen that focus 
and encourage agencies to fully integrate consideration of executive 
leadership qualifications into their selection processes, the proposed 
regulations incorporate the statutory requirements. Agency latitude to 
design the merit staffing process, including how to consider executive 
qualifications in the merit staffing process, is unchanged.
    In addition to the regulatory change, OPM is modifying procedural

[[Page 41335]]

requirements for documenting executive qualifications for presentation 
to QRBs to provide alternative methods and options for agency use. 
These changes are intended to give agencies additional flexibility, 
reduce the paperwork burden on applicants, and improve the QRB 
certification process.

Delegating QRB Administration

    The law at 5 U.S.C. 3393 requires OPM to establish QRBs to certify 
the executive qualifications of candidates for initial career 
appointment to the SES. In enacting this provision, Congress indicated 
that this would provide an independent peer review, which would ensure 
that appointments to the SES are based primarily on executive 
qualifications, rather than on technical or professional 
qualifications. While OPM's broad statutory authority at 5 U.S.C. 1104 
includes the authority to delegate QRB administration to agencies, OPM 
has traditionally held that OPM-convened QRBs assured that the focus of 
the certification is on the executive qualifications and safeguarded 
Congressional intent. However, as we have moved in recent years toward 
increasing agencies' flexibility to manage their executive resources, 
OPM has agreed to consider delegating QRB administration to agencies, 
on an agency-by-agency basis via individual delegation agreements; 
provided that the focus on leadership and executive expertise is 
maintained and merit system principles are preserved. The proposed 
regulation authorizes delegated agreements, under specific conditions. 
The agreements will be designed to ensure an independent peer review, 
set the scope of the delegation, address agency QRB operations, 
prescribe reporting requirements, and provide for OPM oversight.
    In addition to this regulatory change, OPM is modifying procedures 
and paperwork associated with QRB administration to address concerns 
that the process focuses on paper over substance and to provide more 
specific and detailed feedback to agencies on QRB disapprovals.

Noncareer Conversion Restriction

    The current regulation at 5 CFR 317.502(e) precludes QRB 
certification of a noncareer SES employee for career appointment in the 
employee's current position or a successor to that position, because 
there is no bona-fide vacancy for which to hold competition. This 
regulation was intended to preserve the merit principle of fair and 
open competition in merit selections. Since the regulation was 
promulgated, however, questions have arisen about the definition of 
``noncareer SES employee.'' The proposed regulation strengthens and 
clarifies the intent of the current regulation by expanding coverage to 
noncareer-type employees, including noncareer SES appointees and 
Schedule C appointees, or the equivalent.

SES Probationary Period

Performance Assessment

    The SES statute (Pub. L. 95-454) establishes a 1-year probationary 
period for new career SES appointees. It requires that an individual's 
initial appointment as a career SES appointee could not become final 
until that individual completes one year of service as a career 
appointee (5 U.S.C. 3393(d)). OPM has long held that the probationary 
period is an extension of the examining process to be used to determine 
an individual's ability to actually perform as an executive. The law 
also includes provisions to facilitate removal of appointees during 
probation for unacceptable performance or conduct (5 U.S.C. 3592).
    During the Framework discussions, stakeholders expressed concern 
about the lack of attention that agencies have given to SES probation 
and explored options for making more effective use of the probationary 
period as the vehicle for assessing whether or not the new appointees 
are performing as executives. The proposed regulation requires agencies 
to assess the performance of career appointees before the end of the 
probationary period and make an official determination that the 
appointee is performing at the level of excellence expected of a senior 
executive.

Training and Development.

    By law (5 U.S.C. 3393(c)(2)), OPM prescribes criteria for 
establishing executive qualifications for career appointment, but these 
criteria must provide for consideration of demonstrated executive 
experience, successful participation in an OPM-approved candidate 
development program, and possession of special or unique qualities that 
indicate a likelihood of executive success. In support of candidates 
with special or unique qualities, OPM requires a detailed development 
plan for obtaining the full complement of executive qualifications. 
Stakeholders indicated that stronger oversight is needed in cases where 
the QRB certifies candidates on the basis of special and unique 
qualifications to verify that the executive development activities 
promised by the agency are accomplished. The proposed regulation 
requires agencies to address the executive development activities 
outlined in the development plans during the appointee's probationary 
period.

Pool of Limited Appointment Authorities

    Under 5 CFR 317.601, agencies currently have been provided a pool 
of limited appointment authorities equal to 2 percent of their total 
SES space allocation that they may use without prior OPM approval. Use 
of these pool authorities is restricted to appointments of individuals 
with career or career-type appointments outside the SES. Agencies have 
found this flexibility very helpful. Many have made full use of the 
delegated pool of authorities and have expressed a need for increased 
authorities. The proposed regulation increases the delegated pool of 
limited authorities from 2 percent to 3 percent.
    In exercising these authorities, agencies must continue to comply 
with all other statutory and regulatory provisions affecting limited 
appointments, e.g., that an appointment be made only to a general 
position; that the appointee must meet the qualifications required for 
the position; and that the appointment is to a non-continuing, project-
type position. OPM will continue to monitor use of this appointment to 
ensure compliance with the statutory 5 percent limit on SES limited 
appointments Governmentwide and that appointments are being made in 
accordance with statutory and regulatory provisions.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because the 
regulations pertain only to Federal employees and agencies.

List of Subjects in 5 CFR Part 317

    Government employees.

Office of Personnel Management.
Janice R. Lachance,
Director.

    Accordingly, OPM proposes to amend 5 CFR part 317 as follows:

PART 317--EMPLOYMENT IN THE SENIOR EXECUTIVE SERVICE

    1. The authority citation for part 317 continues to read as 
follows:

    Authority: 5 U.S.C. 3392, 3393, 3393a, 3395, 3397, 3593 and 
3596.

[[Page 41336]]

Subpart E--Career Appointments

    2. Amend Sec. 317.501 by revising the first sentence of paragraph 
(c)(2) and paragraph (c)(6), to read as follows:


Sec. 317.501  Recruitment and selection for initial SES career 
appointment.

* * * * *
    (c) * * *
    (2) Provide that the ERB consider the executive and technical 
qualifications of each candidate, other than those found ineligible 
because they do not meet the requirements of the vacancy announcement. 
* * *
* * * * *
    (6) Provide that the appointing authority select from among the 
candidates identified as best qualified by the ERB and certify the 
candidate's executive and technical qualifications.
* * * * *
    3. Section 317.502 is revised to read as follows:


Sec. 317.502  Qualifications Review Board certification.

    (a) This section covers Qualifications Review Boards convened by:
    (1) The Office of Personnel Management (OPM); or
    (2) An agency, under a written delegation agreement with OPM.
    (b) General Provisions:
    (1) A Qualifications Review Board (QRB) must certify the executive/
managerial qualifications of a candidate before initial career 
appointment may be made to an SES position. More than one-half of the 
members of a QRB must be SES career appointees.
    (2) Requests for certification of a candidate by a QRB must contain 
such information as prescribed by OPM, including evidence that merit 
staffing procedures were followed and that the appointing authority 
certified the candidate's executive and technical qualifications for 
the position.
    (3) Qualifications Review Board certification of executive 
qualifications must be based on demonstrated executive experience; 
successful completion of an OPM-approved candidate development program; 
or possession of special or unique qualities that indicate a likelihood 
of executive success. Any existing time limit on a previously approved 
certification is removed.
    (4) OPM may determine the disposition of requests for QRB 
certification if the QRB has not yet acted when:
    (i) The agency head leaves office or announces an intention to 
leave office;
    (ii) The President has nominated a new agency head; or
    (iii) There is a Presidential transition.
    (5) An action to convert a ``noncareer-type'' employee to a career 
SES appointment in the employee's current position or a successor to 
that position will not be forwarded to a QRB. A ``noncareer-type'' 
employee includes a noncareer SES appointee, a Schedule C appointee, or 
equivalent.
    (6) A new QRB certification is required for an individual to be 
reappointed as an SES career appointee following separation of the 
individual from an SES career appointment if:
    (i) The individaul was removed during the SES probationary period 
for performance or disciplinary reasons; or
    (ii) The individual completed an SES probationary period, or did 
not have to serve one, and was removed for a reason that made the 
individual ineligible for reinstatement to the SES under subpart G of 
this part.
    (c) Agencies may request the authority to convene Qualifications 
Review Boards. OPM may delegate such authority via written delegation 
agreement on an individual agency-by-agency basis. The delegation 
agreement will:
    (1) Delegate the authority to the head of the agency;
    (2) Provide for QRB operations that result in certification of 
candidates on the basis of executive qualifications and in the 
preservation of merit principles.
    (3) Address the composition of the Boards to ensure an independent 
peer review.
    (4) Prescribe documentation, reporting, and record retention 
requirements.
    (5) Provide for OPM oversight.
    4. Amend Sec. 317.503 by revising paragraph (a); redesignating 
paragraphs (b) through (f) as paragraphs (c) through (g), respectively; 
adding a new paragraph (b); and revising the last sentence in newly 
redesignated paragraph (f) to read as follows:


Sec. 317.503  Probationary period.

    (a) An individual's initial appointment as an SES career appointee 
becomes final only after the individual has served a 1-year 
probationary period as a career appointee; there has been an assessment 
of the appointee's performance during the probationary period; and the 
appointing authority has certified that the appointee performed at the 
level of excellence expected of a senior executive during the 
probationary period.
    (b) When a career appointee's executive qualifications have been 
certified by a Qualifications Review Board on the basis of special or 
unique qualities, as described in Sec. 317.502(b)(3), the probationary 
assessment must address any executive development activities the agency 
identified in support of the request for QRB certification.
* * * * *
    (f) * * * The individual, however, need not be recertified by a QRB 
unless the individual was removed for performance or disciplinary 
reasons.
* * * * *
    5. In subpart F, the heading for the subpart is revised to read as 
follows:

Subpart F--Noncareer and Limited Appointments

    6. Amend Sec. 317.601, paragraph (c)(1), by revising the first 
sentence to read as follows:


Sec. 317.601  Authorization.

* * * * *
    (c) * * *
    (1) Agencies are provided a pool of limited appointment authorities 
equal to 3 percent of their Senior Executive Service (SES) position 
allocation, or one authority, whichever is greater. * * *

[FR Doc. 99-19487 Filed 7-29-99; 8:45 am]
BILLING CODE 6325-01-P