[Federal Register Volume 65, Number 250 (Thursday, December 28, 2000)]
[Rules and Regulations]
[Pages 82239-82246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-33114]



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  Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / 
Rules and Regulations  

[[Page 82239]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 731

RIN 3206-AC19


Suitability

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing final 
changes to the rule on personnel suitability which OPM previously 
issued as a proposed rule for comments. OPM received and considered 
public comments. This rule addresses the significant concerns expressed 
and incorporates some of the suggestions received.

DATES: January 29, 2001.

FOR FURTHER INFORMATION CONTACT: Thomas DelPozzo, (724) 794-5612.

SUPPLEMENTARY INFORMATION: OPM promulgated the proposed final 
suitability regulations with a request for comments in Federal 
Register, Vol. 64, No. 18, p. 4336. Comments were received from 13 
sources, including Federal agencies, individuals, and a labor 
organization. The following summarizes the principal comments and 
suggestions received and actions that were taken.

Part 731

Non-Specific General Comments

    An agency commenter suggested that OPM cross-reference 5 CFR 
339.201, which authorizes OPM to disqualify an applicant based on 
mental or physical unfitness. We conclude that a revision to Part 731 
in the manner suggested is unnecessary. We will cross-reference Part 
339 and include some clarification of this issue in our supplemental 
guidance.
    An agency suggested that OPM establish a time limit for 
investigation and/or adjudication of suitability cases to ensure 
completion a minimum of 90-120 days before expiration of the 
probationary period.
    Certain time frames to ensure timely processing are already in the 
regulations (for example, section 731.106 provides that investigations 
should be initiated before appointment or, at most, within 14 calendar 
days of placement in the position). The variances that are a natural 
part of investigation and adjudication make it difficult to require 
specific time limits. Agencies can manage adjudicative time frames in a 
number of ways, such as by dealing with applicant suitability issues 
prior to appointment; by investigating prior to appointment; by 
submitting required case papers for investigation, completed properly, 
within required time frames; by requesting the appropriate 
investigation service timeliness levels to ensure completion of the 
investigation in time to take the adjudicative action before the end of 
the probationary period; and by processing adjudicative actions more 
efficiently.

Section 731.101  Purpose

    A commenter recommended that the definition of ``material, 
intentional false statement'' be altered to define the term 
``material'' rather than the term ``material, intentional false 
statement'' since the proposed definition did not include definitions 
for ``intentional'' and ``false.'' We agreed to the suggested wording 
with a slight modification.
    One commenter suggested that the proposed definition of ``material, 
intentional false statement'' is excessively broad and vague in that 
virtually any statement would meet this definition. The commenter 
suggested that it was objectionable for OPM to state that reliance on a 
false statement is irrelevant to the test of materiality.
    OPM disagrees. Virtually the same definition of materiality has 
been enunciated by the Supreme Court in other contexts. See e.g., 
United States v. Gaudin, 515 U.S. 506 (1995). Clearly, the Supreme 
Court did not create and apply a test for materiality that was 
unlawfully vague. Further, it is entirely appropriate that actions be 
taken against falsifiers whether or not they succeed in their attempts 
to deceive. OPM's suitability program seeks to deter applicants from 
falsifying statements to gain an advantage in the appointment process, 
as well as to detect applicants who falsify.

Section 731.102  Implementation

    Two commenters suggested agencies be afforded up to one year to 
implement an adjudication program to re-assess position designation, 
develop internal operating procedures, and undergo comprehensive 
training. We agreed to give agencies up to one year to modify their 
existing suitability adjudication program to accommodate the increased 
delegation of applicant suitability authority. Thus, although agencies 
must implement the new regulations now, OPM will continue to accept 
applicant suitability referrals, under our current procedures, for up 
to a year from the effective date of the new regulations. Additionally, 
OPM will provide supplemental guidance and suitability training to 
assist agencies.

Section 731.103  Delegation to Agencies

    An agency asked whether agencies to which OPM previously had 
delegated authority will now be required to refer any cases involving 
falsification to OPM for adjudication. If so, the agency commented that 
this would be an additional burden.
    OPM's policy concerning material falsification cases has not 
changed. In supplemental guidance issued in 1991 with our current 
regulations, OPM policy stated, ``OPM is responsible for adjudicating 
all cases (applicants, eligibles, appointees, and employees) involving 
material, intentional false statement, deception, or fraud in 
examination or appointment.'' Additionally, as stated in a 1995 Federal 
Investigations Notice (FIN 95-1), ``All agencies, including those with 
delegated suitability adjudication authority, should refer any 
competitive service applicant situation where there is evidence of 
intentional false statement or deception or fraud in examination or 
appointment process, to the same office (OPM, Federal Investigations 
Processing Center, Suitability Adjudications Branch).''
    In employee cases (a person who has completed the first year of a 
subject to investigation appointment), this policy applies only to 
fraud in the examination or appointment process for a ``subject to 
investigation'' appointment. Our basis for maintaining adjudicative 
control in

[[Page 82240]]

these cases is basically two-fold: (1) A violation of the merit system 
has occurred that affects the integrity of the competitive appointment 
process; and (2) OPM's action can include debarment for up to three 
years.
    A commenter objected to any use of confidential sources. The 
comment suggests that the proposed regulation would permit the 
unlimited use of corroborated confidential sources. The comment 
suggests that reliance on information provided by confidential sources 
would be contrary to due process principles.
    The comment mischaracterized the intent and effect of the proposed 
regulations. Section 731.203(e) [now in 731.302(a) and 731.402] 
specifically provided that before a final suitability action is taken, 
an agency or OPM must provide for review, upon request, all materials 
relied upon in taking the action. Under the regulations, the deciding 
official, in taking his or her action, must consider all information 
made available to him or her except information furnished by 
confidential sources themselves. This satisfies all due process 
concerns. Any improperly-considered information will be subject to the 
statutory harmful error rule in any appeal challenging the action.
    Of course, the deciding official may rely on any information, 
including similar or identical information, from any other source. This 
includes (a) non-confidential sources that are located through 
information provided by confidential sources or (b) information from a 
non-confidential source that corroborates information initially 
provided by a confidential source, as long as the material relied upon 
is made available under section available.
    Upon reflection, we recognize that the reference in the last 
sentence of the regulation, which uses the phrase ``such information,'' 
is ambiguous and confusing. Inasmuch as this sentence was intended to 
summarize the entire regulation, we believe it to be redundant, and we 
are deleting it to eliminate any ambiguity.
    A commenter believes delegation will have a workload impact on 
agencies, and supplemental guidance and training from OPM will be 
required. Although there will be an impact on agencies, we do not 
believe the impact will be that significant, since OPM will continue to 
adjudicate material, intentional falsification cases, and cases where a 
general extended debarment is warranted. The major agency impact occurs 
in the suitability examining process, i.e., reviewing application 
material and deciding the appropriate action to take. The actions most 
commonly taken would be to favorably adjudicate the applicant's 
suitability, or refer to OPM for adjudication if warranted. OPM will 
also issue supplemental guidance, offer adjudicative products, provide 
assistance through training, and allow agencies up to a year to train 
personnel and develop processes to handle their new applicant 
suitability responsibilities.
    An agency asked what skill level would be required for agency 
personnel assigned to adjudication responsibilities and whether the GS-
1800 series was appropriate, as the agency was concerned about limited 
resources. OPM is not requiring a particular job series to handle this 
work; however, agencies will need to assess the inherent 
responsibilities associated with adjudication when determining who will 
do the work. They will have to ensure employees are properly trained 
and qualified to do the work.

731.104  Appointments Subject to Investigation and 731.105 Jurisdiction

    One commenter suggested that OPM confused rather than clarified the 
length of time that employees, applicants, and appointees would be 
subject to investigation by deleting section 731.301(b). The commenter 
believes that the substitute language in sections 731.104 and 105 may 
accomplish the same purpose in a more complicated fashion--barring the 
removal of an employee as unsuitable after a year in the position based 
on information truthfully set forth in the application.
    In the supplementary material accompanying the proposed 
regulations, we explained that the one-year period applies only to the 
time period during which OPM or an agency may take a suitability action 
against an applicant or appointee. It is not a time limitation on an 
OPM or an agency suitability investigation of an individual. However, 
our efforts to clarify and simplify the regulatory language have not 
succeeded. The text of the regulation, as opposed to the explanation in 
the supplementary material, remains somewhat unclear.
    Therefore, we have again modified the language of section 731.104 
to conform more clearly to the purpose we have articulated as follows:
     The right of OPM or an agency with delegated authority to 
conduct a suitability investigation has no time limit even though in 
some cases, enumerated in section 104, OPM or an agency with delegated 
authority is not required to conduct a suitability investigation.
     OPM's authority to take a suitability action for fraud in 
examination or appointment also has no time limit.
     An agency with delegated suitability authority may not 
take a suitability action of any kind against an ``employee'' as 
defined in 5 CFR 731.101 of the regulations.
    For suitability action purposes, an agency that has discerned 
evidence of material, intentional false statement or deception or fraud 
in examination or appointment may refer evidence to OPM for possible 
action.
    We have also modified the title of section 731.105 to read 
``Authority to take suitability actions'' instead of ``Jurisdiction'' 
to clarify that this regulation concerns only authority to take 
suitability actions and has nothing to do with an agency or OPM's 
authority to conduct investigations.
    Commenters felt this section needed clarification to eliminate the 
perception that if the investigation is not conducted within the first 
year, it can never be conducted. To address this concern we added 
language to 731.104(b) and also modified 731.106(c).
    An agency requested further clarification of this section to avoid 
the interpretation that agencies are restricted from conducting 
investigations on transfers for individuals serving continuously for 
less than one year.
    The agency misreads the regulation. A transfer is not subject to 
investigation unless investigation is required by a change in risk 
level or because an investigation required by law did not occur. 
Therefore, we have not changed the proposed regulation.
    A commenter requested that we clarify whether investigation and 
negative suitability action are permitted when an individual moves from 
a position that is not subject to investigation to one with a higher 
risk designation. We revised 731.106(e) to require an investigation at 
the appropriate level when an individual moves to a position with a 
higher risk designation. We also added a new section, 731.106(f), to 
explain that how these investigations are adjudicated depends on the 
person's employment status.

Section 731.105  Jurisdiction

    One commenter found the language in 731.105(d) regarding the 
authority for agency actions on employees unclear. Another suggested 
adding specific clarifying language, and that reference to ``efficiency 
of the service'' be deleted since all 752 actions, by definition, must 
promote the efficiency of the service.

[[Page 82241]]

    We agreed to clarify the language, which could be interpreted as 
intermingling adverse actions and suitability actions. The minor 
changes in the language ensure that readers understand that suitability 
actions and adverse actions arise under different authorities and that 
adverse actions are to be taken under the substantive standards of part 
752, as well as its procedures. Although an agency may take an adverse 
action based upon conduct that would also form the basis for a 
suitability action, part 752 standards and jurisprudence govern an 
adverse action rather than the substantive standards set forth in part 
731.

Section 731.106  Designation of Public Trust Positions and 
Investigative Requirements

    One commenter stated that OPM has significantly broadened the 
definition of a public trust position. The commenter conceded that the 
differences between the proposed regulation and existing regulations 
are subtle. The commenter asserts that this subtle modification will 
encourage agencies to indulge in what is deemed their natural 
tendencies to exaggerate the sensitivity of positions.
    There is no indication that this change will create a significant 
increase in the number of investigations conducted. Further, we reject 
the unsupported assertion that agencies are naturally impelled to 
exaggerate the sensitivity of positions. Rather, agencies are entitled 
to a presumption of good faith, and OPM expects that they will not 
abuse any authority arising from these regulations. Of course, agency 
implementation of any OPM regulation is subject to periodic OPM 
oversight.
    A suggestion to simplify designation to coincide with the three 
investigative forms (SF85, SF85P, and SF86), eliminate the levels of 
public trust and the requirement that agencies evaluate all their 
positions to determine risk levels and decide which of the positions 
meet public trust definitions, was not adopted. In the comments we 
previously received to the proposed regulations published in the 
Federal Register on January 5, 1996, a number of agencies expressed 
concern that OPM had eliminated risk level designations and left too 
much agency discretion in determining what constituted ``Public Trust'' 
positions.
    We agreed and made appropriate revisions. We also believe agencies 
should look closely at all their positions to determine the level of 
risk involved, and since public trust responsibilities vary in their 
impact on the integrity or on the efficiency of the service, 
investigative requirements should also vary commensurate with the risk 
level. Furthermore, public trust and national security need to be 
appropriately considered in tandem when evaluating position 
responsibilities and investigative levels. A national security case 
(SF-86) where an individual only needs a secret clearance (relatively 
low level of investigation) might also be a high risk public trust 
position (higher level of investigation). A person in a low risk public 
trust position (low level investigation) might require access to top 
secret information (high level investigation).
    One commenter stated that the proposed regulations imply that where 
there is no existing authority for agencies to conduct periodic 
investigations of public trust employees, agencies may grant themselves 
this authority by promulgating their own regulations. The comment 
describes this as inconsistent with the position that OPM took in its 
1996 proposed regulations, namely, that there was no statutory 
authority for agencies to conduct reinvestigations.
    There is no inconsistency. Read in its entirety, the supplementary 
material accompanying the 1996 proposed regulations makes clear that 
OPM does not possess statutory authority to require that 
reinvestigations be conducted unless employees occupy positions 
affecting national security. The 1999 proposed regulations clarify that 
agencies may possess their own authority to require periodic 
reinvestigations for employees occupying certain public trust 
positions. These final regulations do not purport to create any 
additional authority for agencies to conduct this type of 
reinvestigation.
    Two commenters found ``731.106(e) Risk level changes'' language 
confusing. We agreed and changed the wording.

Sections 731.201  Standard and 731.202 Criteria

    One commenter suggested that the revised language in section 
731.201 represents a significant change in the suitability standard and 
that the ``integrity and efficiency'' language was too vague and gave 
deciding officials too much discretion. The commenter suggested that 
deletion of language in section 731.202 would mean there is no 
limitation on criminal misconduct deemed to be unsuitable. The 
commenter suggested not revising the existing regulation.
    The comment is not accepted. The revised regulation is designed 
primarily to be a rewording and reordering of the regulation in order 
to place affected applicants and employees on even clearer notice of 
the suitability standards.
    The current efficiency of the service language might inadvertently 
lead some to believe that efficiency and effectiveness are limited to 
their dictionary definitions, namely, the capacity to produce desired 
results with a minimum expenditure of energy, time or money, or the 
ability to produce results. In fact, the efficiency of the service 
standard as used by OPM in a suitability context always has been a 
broader concept that involves, among other things, the integrity of the 
competitive examination system. To give one example, decisional law 
correctly recognizes when an applicant obtains an appointment through 
falsifying an application, he or she is unsuitable and may be removed 
from his or her position even if he or she efficiently carries out 
tasks in the job he or she has obtained. McCreary v. OPM, 27 M.S.P.R. 
459 (1985); DeAngelis v. OPM, 28 M.S.P.R. 456 (1985). Adding the word 
integrity makes it even clearer that integrity and honest conduct 
always have been an important part of the existing efficiency of the 
service standard.
    The revised standard is not vague. Indeed, it is somewhat more 
specific than the existing efficiency of the service standard. The 
courts have upheld similar language against legal challenges of 
constitutional vagueness, for example, in Arnett v. Kennedy, 416 U.S. 
134 (1974); see also Meehan v. Macy, 392 F.2d 822 (D.C. Cir. 1968).
    The suggestion that the revised regulations recognize no limit on 
the type of misconduct or criminal misconduct that will justify a 
suitability action is incorrect. The additional considerations set 
forth in section 731.202(c) make clear that a suitability determination 
may be made after considering the nature of the position, the nature 
and seriousness of the conduct and the circumstances surrounding the 
conduct, among other things.
    An agency asked whether the specific factor at 731.201(b)(4) 
``Refusal to furnish testimony as required by Sec. 5.4 of this 
chapter'' referred to section 5.4 of 731. It does not. The proposed 
regulation as written was confusing. Federal regulations are organized 
by Title in the Code of Federal Regulation rather than by ``chapters.''
    Therefore, we have modified the proposed regulation by substituting 
the word ``title'' for ``chapter'' to clarify that this provision 
refers to section 5.4 of title 5, Code of Federal Regulations, one of 
the Civil Service Rules.

[[Page 82242]]

    The same agency suggested that we add, in accordance with section 
5.4, that this suitability factor also pertains to the requirement to 
provide forms, releases, answers to questions of investigators, and 
security adjudicators, among others. We have not adopted this 
suggestion. Although section 5.4 does list other requirements, the 
suitability factor is limited to the requirement in section 5.4 to 
provide testimony when required by OPM. We decline to expand the scope 
of the disqualifying factor.

Section 731.203  Actions by OPM and Other Agencies

    One commenter suggested that there appeared to be a conflict 
between the procedures set forth in section 731.203(e) and those at 
subpart C of the regulations.
    OPM did not intend a conflict between the two provisions. Section 
203(e) was intended to provide general procedures for both agencies and 
OPM to follow when taking a suitability action. Subpart C was designed 
to provide the specific procedures OPM was to follow when taking an 
action.
    We acknowledge this could cause some confusion. Therefore, we have 
eliminated the subsection on general procedures and have substituted a 
subpart D that applies when agencies take an action.
    Because we have expanded agencies' authority in the areas of 
debarment and applicant adjudication, we decided to set forth several 
of the procedures applicable to them with greater specificity. We have 
modified both the regulatory provisions applying to OPM and agencies to 
make clear that whenever OPM or an agency takes an action, a written 
notice must be provided of the specific reasons for the action, a 
written response must be permitted, and notice must be provided of the 
time limit for the response and appeal rights.
    Still, to give agencies a bit more flexibility, we have retained 
some differences in the provisions. We have not set forth a specific 
time limit for agency notice. Rather, we clarified that reasonable 
notice must be afforded. For OPM actions, we have retained a 30-day 
notice period. Of course, if an action is appealed, the harmful error 
rule at 5 U.S.C. Sec. 7701(c)(2)(A) applies both to agency and OPM 
actions.
    For clarity, we have added subsection 731.203(a) defining the term 
``action'' for suitability purposes.
    Two commenters questioned whether 731.203(f) [now 731.203(e)] 
represents an additional reporting requirement since agencies are 
already required to report actions on OPM investigations via INV form 
79A, Report of Adjudicative Action on OPM Personnel Investigations. 
This section does contain a new reporting requirement. All negative 
adjudications based on delegated 5 CFR 731 authority must now be 
reported to OPM, even when those actions are not based on an OPM 
conducted investigation. This is necessary to permit OPM to adequately 
oversee the suitability adjudication responsibilities we have delegated 
to agencies. A new form is being created for this purpose, but agencies 
will not need to provide a duplicate report if the action is based on 
an OPM investigation and they are already reporting the action on the 
INV form 79A.

Section 731.204  Debarment by OPM

    An agency requested that agencies be given the ability to appeal an 
OPM-imposed debarment when the position is critical and difficult to 
fill and there are no other suitable applicants. We made no change 
since agencies already have the right to respond to an OPM proposed 
action under section 731.303(b), and may provide evidence upon request 
in any MSPB appeal.

Section 731.205  Debarment by Agencies

    An agency welcomed the opportunity to bar unsuitable employees. 
Another found the agency debarment language unclear. We believe the 
language satisfactory, and made no change. The language in this section 
states that agencies may impose a period of debarment of ``no more 
than'' one year, and that the agency has sole discretion to determine 
length of debarment ``under this section.'' It is within their 
discretion to determine the duration of the bar, up to the maximum 
period of one year.

Section 731.302  Notice of Proposed Action

    A commenter objected to the provision ``shall be entitled to be 
retained in a pay status during the notice period'' because the 
individual may be involved in misconduct apart from the reasons for the 
suitability action which would warrant an agency action.
    We have retained the proposed language. But, we emphasize that this 
provision does not preclude an agency from taking any other appropriate 
action during the suitability action notice period. Appropriate actions 
may include an adverse action under chapter 75 U.S. Code or a 
termination under part 315, title 5, Code of Federal Regulations.

Section 731.303  Answer

    One commenter suggested the agency be permitted to determine the 
time and place of an oral response. Another suggested that reference to 
agency actions should be added to paragraph (a). No change was made 
since this section now only applies to OPM. Furthermore, only OPM, not 
agencies, may take action against ``employees'' under 731. The 
reference to the oral response here applies only to employees.

Section 731.304  Decision

    A commenter felt the agency should have discretion to allow the 
employee to remain in an active duty status pending results of an 
appeal. We made no change for several reasons. OPM directs removal 
primarily in cases involving fraud in the application or appointment 
process, and an individual generally should not retain a position 
obtained fraudulently. Further, OPM gives agencies an opportunity to 
comment and express their views before OPM takes the action.

Section 731.401  Appeal to the Merit Systems Protection Board

    One commenter stated that section 731.401 (now 731.501) should make 
clear that the Board lacks the authority to reverse a removal action, 
as well as lacking the authority to modify a debarment period, when it 
affirms a determination of unsuitability. It noted correctly that under 
OPM regulation, an agency could remove the employee and not impose a 
debarment. OPM has adopted this suggestion, which is entirely in 
keeping with OPM's intent to clarify that once the Board has found that 
any of the charges of unsuitability is supported by preponderance of 
the evidence, it lacks authority to modify the action taken.
    Another commenter took issue with OPM's section 731.401 (now 
731.501), asserting that, in the past, the courts have rejected OPM's 
attempts to limit the Board's authority to hear appeals.
    The comment does not acknowledge the difference between an appeal 
right to the Board granted by Congress, such as an adverse action 
appeal under Chapter 75, title 5, United States Code, which OPM may not 
limit, and one granted solely by OPM through regulation. The comment 
also does not recognize that when Congress or OPM authorizes the Board 
to hear a particular kind of appeal, the Board's grant of authority is 
limited by the terms of the statute or OPM regulation and its 
underlying intent.
    The Board's authority to decide matters is strictly limited to 
those

[[Page 82243]]

agency decisions placed within its jurisdiction by law or regulation. 
See, for example, King v. Jerome, 42 F.3d 1371 (Fed. Cir. 1994). An OPM 
suitability action is not taken under the same authority as an adverse 
action. Unlike adverse action appeals, suitability appeals to MSPB are 
not created by an act of Congress but by OPM regulations under 
substantive standards promulgated by OPM in Part 731. These standards 
need not be the same as those in Chapter 75, just as those contained in 
Chapter 43, title 5, United States Code pertaining to performance-based 
actions are not the same as those in Chapter 75. Lisiecki v. Merit 
Systems Protection Board, 769 F.2d 1558 (Fed. Cir. 1985).
    The new regulation seeks to demarcate the differences between 
suitability actions and adverse actions so that no one will confuse 
them in the future. Specifically, the regulation is designed to clarify 
that the Board's role in reviewing OPM or agency unsuitability 
decisions always has been a limited one. The Board may determine only 
whether a charge of unsuitability is sustained by a preponderance of 
the evidence in accordance with the substantive standard set forth in 
section 731.202.
    In addition, the proposed regulation provides OPM or the agency 
with an additional opportunity to amend the action taken if the Board 
sustains fewer than all of the suitability charges, something that the 
existing regulations do not provide for. Therefore, rather than 
limiting the Board's authority, as the comment suggests, the new 
regulation allows the agency or OPM to review the action taken after 
taking into account only the charges that the Board sustained.

Regulatory Flexibility Act

    I certify that this rule will not have significant economic impact 
on a substantial number of small entities because it affects only 
Federal applicants, employees and agencies.

List of Subjects in 5 CFR Part 731

    Administrative practice and procedure, Government employees.

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

    Accordingly, the Office of Personnel Management revises 5 CFR part 
731 as follows:

PART 731--SUITABILITY

Subpart A--Scope
Sec.
731.101   Purpose.
731.102   Implementation.
731.103   Delegation to agencies.
731.104   Appointments subject to investigation.
731.105   Authority to take suitability actions.
731.106   Designation of public trust positions and investigative 
requirements.
Subpart B--Suitability Determinations
731.201   Standard.
731.202   Criteria.
731.203   Actions by OPM and other agencies.
731.204   Debarment by OPM.
731.205   Debarment by agencies.
Subpart C--OPM Suitability Action Procedures
731.301   Scope.
731.302   Notice of proposed action.
731.303   Answer.
731.304   Decision.
Subpart D--Agency Suitability Action Procedures
731.401   Scope.
731.402   Notice of proposed action.
731.403   Answer.
731.404   Decision.
Subpart E--Appeal to the Merit Systems Protection Board
731.501   Appeal to the Merit Systems Protection Board.
Subpart F--Savings Provision
731.601   Savings provision.

    Authority: 5 U.S.C. 1302, 3301, 7301, 7701; E.O. 10577, 3 CFR 
1954-1958 Comp., p. 218; E.O. 12731, 3 CFR, 1990 Comp., p. 306., 5 
CFR, part 5.

Subpart A--Scope


Sec. 731.101  Purpose.

    (a) The purpose of this part is to establish criteria and 
procedures for making determinations of suitability for employment in 
positions in the competitive service and for career appointment in the 
Senior Executive Service (hereinafter in this part, ``competitive 
service'') pursuant to 5 U.S.C. 3301 and Executive Order 10577 (3 CFR, 
1954-1958 Comp., p. 218). Section 3301 of title 5, United States Code, 
directs consideration of ``age, health, character, knowledge, and 
ability for the employment sought.'' Executive Order 10577 directs OPM 
to examine ``suitability'' for competitive Federal employment. This 
part concerns only determinations of ``suitability'' based on an 
individual's character or conduct that may have an impact on the 
integrity or efficiency of the service. Determinations made under this 
part are distinct from determinations of eligibility for assignment to, 
or retention in, sensitive national security positions made under 
Executive Order 10450 (3 CFR, 1949-1953 Comp., p. 936), Executive Order 
12968, or similar authorities.
    (b) Definitions. In this part:
    Applicant. A person being considered for employment.
    Appointee. A person who has entered on duty and is in the first 
year of a subject to investigation appointment (as defined in 
Sec. 731.104).
    Employee. A person who has completed the first year of a subject to 
investigation appointment.
    Material. A ``material'' statement is one that is capable of 
influencing, or has a natural tendency to affect, an official decision.


Sec. 731.102  Implementation.

    (a) An investigation conducted for the purpose of determining 
suitability under this part may not be used for any other purpose 
except as provided in a Privacy Act system of records notice published 
by the agency conducting the investigation.
    (b) Under OMB Circular No. A-130 Revised, issued February 8, 1996, 
the Director of OPM is to establish policies for Federal personnel 
associated with the design, operation, or use of Federal automated 
information systems. Agencies are to implement and maintain a program 
to ensure that adequate protection is provided for all automated 
information systems. Agency programs should be consistent with 
government-wide policies and procedures issued by OPM. The Computer 
Security Act of 1987 (Public Law 100-235) provides additional 
requirements for Federal automated information systems.
    (c) Policies, procedures, criteria, and guidance for the 
implementation of this part shall be set forth in OPM issuances. OPM 
may revoke an agency's delegation to adjudicate suitability under this 
part if an agency fails to conform to OPM issuances.


Sec. 731.103  Delegation to agencies.

    (a) OPM delegates to the heads of agencies limited authority for 
adjudicating suitability in cases involving applicants for and 
appointees to competitive service positions in the agency (including 
limited, agency-specific debarment authority under Sec. 731.205). OPM 
retains jurisdiction in all competitive service cases involving 
evidence of material, intentional false statement or deception or fraud 
in examination or appointment. Agencies must refer these cases to OPM 
for adjudication, or contact OPM for prior approval if the agency wants 
to take action under its own authority (5 CFR

[[Page 82244]]

part 315 or 5 CFR part 752). Also, this delegation does not include 
cases involving refusal to furnish testimony as required by Sec. 5.4 of 
this chapter, title, or passover requests involving preference 
eligibles who are 30 percent or more compensably disabled which must be 
referred to OPM for adjudication, as provided under Civil Service 
Reform Act of 1978, Public Law 95-454, 92 Stat. 1111 et seq. (Codified 
as amended in scattered sections of 5 U.S.C.)
    (b) Any adjudication by an agency acting under delegated authority 
from OPM which indicates that an extended general, across agency lines, 
debarment by OPM under Sec. 731.204(a) may be an appropriate action 
should be referred to OPM for debarment consideration if not favorably 
adjudicated by the agency. Referral should be made prior to any 
proposed action, but after sufficient resolution of the suitability 
issue(s) through subject contact or investigation to determine if an 
extended general debarment period appears warranted.
    (c) Agencies exercising authority under this part by delegation 
from OPM must show by policies and records that reasonable methods are 
used to ensure adherence to regulations, standards, and quality control 
procedures established by OPM.
    (d) Before making any applicant suitability determination, the 
agency should first ensure the applicant is eligible for the position, 
among the best qualified, and/or within reach of selection. Because 
suitability issues may not be disclosed until late in the application/ 
appointment process, only the best qualified should require a 
suitability determination, with appropriate procedures followed and 
appeal rights provided, if suitability issues would form the only basis 
for elimination from further consideration.
    (e) When an agency, exercising authority under this part by 
delegation from OPM, makes an adjudicative decision under this part, or 
changes a tentative favorable placement decision to an unfavorable 
decision, based on an OPM report of investigation or upon an 
investigation conducted pursuant to OPM-delegated authority, the agency 
should:
    (1) Ensure that the records used in making the decision are 
accurate, relevant, timely, and complete to the extent reasonably 
necessary to ensure fairness to the individual in any determination;
    (2) Ensure that all applicable administrative procedural 
requirements provided by law, the regulations in this part, and OPM 
policy guidance have been observed;
    (3) Consider all available information in reaching its final 
decision, except information furnished by a non-corroborated 
confidential source. Information furnished by a non-corroborated 
confidential source can only be used for limited purposes, such as lead 
information or in interrogatories to a subject if the identity of the 
source is not compromised in any way; and
    (4) Keep any record of the agency action as required by OPM in its 
supplemental guidance.
    (f) Paragraph (a) of this section notwithstanding, OPM may exercise 
its jurisdiction under this part in any case when it, in its 
discretion, deems necessary.
    (g) Any applicant or appointee who is found unsuitable by any 
agency acting under delegated authority from OPM under this part may 
appeal the adverse suitability decision to the Merit Systems Protection 
Board under the Board's regulations.


Sec. 731.104  Appointments subject to investigation.

    (a) To establish a person's suitability for employment, 
appointments to positions in the competitive service require the person 
to undergo an investigation by OPM or by an agency with delegated 
authority from OPM to conduct investigations. Certain appointments do 
not require investigation. Except when required because of risk level 
changes, a person in the competitive service who has undergone a 
suitability investigation need not undergo another one simply because 
the person has been:
    (1) Promoted;
    (2) Demoted;
    (3) Reassigned;
    (4) Converted from career-conditional to career tenure;
    (5) Appointed or converted to an appointment if the person has been 
serving continuously with the agency for at least 1 year in one or more 
positions under an appointment subject to investigation; and
    (6) Transferred, provided the individual has served continuously 
for at least 1 year in a position subject to investigation.
    (b)(1) OPM or an agency with delegated suitability authority may 
investigate and take a suitability action against an applicant, 
appointee, or employee in accordance with Sec. 731.105. There is no 
time limit on the authority of OPM or an agency with delegated 
suitability authority to conduct an investigation of an applicant who 
has been appointed to a position.
    (2) An employee does not have to serve a new probationary or trial 
period merely because his or her appointment is subject to 
investigation under this section. An employee's probationary or trial 
period is not extended because his or her appointment is subject to 
investigation under this section.
    (3) The subject to investigation condition also does not eliminate 
the need to conduct investigations required under Sec. 731.106 for 
public trust positions.


Sec. 731.105  Authority to take suitability actions.

    (a) OPM may take a suitability action under this part against an 
applicant or appointee based on any of the criteria of Sec. 731.202;
    (b) An agency, exercising delegated authority, may take a 
suitability action under this part against an applicant or appointee 
based on the criteria of Sec. 731.202 subject to the agency limitations 
prescribed in Sec. 731.103;
    (c) OPM may take a suitability action under this part against an 
employee only in cases involving material, intentional false statement 
or deception or fraud in examination or appointment, or refusal to 
furnish testimony as required by Sec. 5.4 of this title, or statutory 
or regulatory bar. A statement may be a material statement even if an 
agency does not rely upon it.
    (d) An agency may not take a suitability action against an employee 
under this part. Nothing in this part precludes, or is intended to 
preclude, an agency from taking an adverse action against an employee 
under the procedures and standards of part 752 of this title or 
terminating a probationary employee under the procedures of part 315 of 
this title.


Sec. 731.106  Designation of public trust positions and investigative 
requirements.

    (a) Risk designation. Agency heads shall designate every 
competitive service position within the agency at a high, moderate, or 
low risk level as determined by the position's potential for adverse 
impact to the efficiency and integrity of the service. OPM will provide 
an example of a risk designation system for agency use in supplemental 
guidance.
    (b) Public Trust positions. Positions at the high or moderate risk 
levels would normally be designated as ``Public Trust'' positions. Such 
positions may involve policy making, major program responsibility, 
public safety and health, law enforcement duties, fiduciary 
responsibilities, or other duties demanding a significant degree of 
public trust; and positions involving access to or operation or control 
of financial records, with a significant risk

[[Page 82245]]

for causing damage or realizing personal gain.
    (c) Investigative requirements. Persons receiving an appointment 
made subject to investigation under this part must undergo a background 
investigation. Minimum investigative requirements correlating to risk 
levels will be established in supplemental guidance provided by OPM. 
Investigations should be initiated before appointment or, at most, 
within 14 calendar days of placement in the position.
    (d) Suitability reinvestigations. Agencies, relying on authorities 
such as the Computer Security Act of 1987 and OMB Circular No. A-130 
Revised (issued February 8, 1996), may require incumbents of certain 
public trust positions to undergo periodic reinvestigations. The 
appropriate level of any reinvestigation will be determined by the 
agency, but may be based on supplemental guidance provided by OPM.
    (e) Risk level changes. If an individual experiences a change in 
position risk level (moves to a higher risk level position, or the risk 
level of the position itself is changed) the individual may encumber or 
remain in the position. Any upgrade investigation required for the new 
risk level should be initiated within 14 calendar days after the move 
or the new designation is final.
    (f) Any suitability investigation completed by an agency under 
provisions of paragraphs (d) or (e) of this section must be adjudicated 
by the employing agency. The subject's employment status will determine 
the applicable agency authority and procedures to be followed in any 
action taken.

Subpart B--Suitability Determinations


Sec. 731.201  Standard.

    Subject to subpart A of this part, an applicant, appointee, or 
employee may be denied Federal employment or removed from a position 
only when the action will protect the integrity or promote the 
efficiency of the service.


Sec. 731.202  Criteria.

    (a) General. In determining whether its action will protect the 
integrity or promote the efficiency of the service, OPM, or an agency 
to which OPM has delegated authority, shall make its determination on 
the basis of the specific factors in paragraph (b) of this section, 
with appropriate consideration given to the additional considerations 
outlined in paragraph (c) of this section.
    (b) Specific factors. When making a determination under paragraph 
(a) of this section, the following may be considered a basis for 
finding an individual unsuitable:
    (1) Misconduct or negligence in employment;
    (2) Criminal or dishonest conduct;
    (3) Material, intentional false statement or deception or fraud in 
examination or appointment;
    (4) Refusal to furnish testimony as required by Sec. 5.4 of this 
title;
    (5) Alcohol abuse of a nature and duration which suggests that the 
applicant or appointee would be prevented from performing the duties of 
the position in question, or would constitute a direct threat to the 
property or safety of others;
    (6) Illegal use of narcotics, drugs, or other controlled 
substances, without evidence of substantial rehabilitation;
    (7) Knowing and willful engagement in acts or activities designed 
to overthrow the U.S. Government by force;
    (8) Any statutory or regulatory bar which prevents the lawful 
employment of the person involved in the position in question.
    (c) Additional considerations. In making a determination under 
paragraphs (a) and (b) of this section, OPM and agencies shall consider 
the following additional considerations to the extent they deem them 
pertinent to the individual case:
    (1) The nature of the position for which the person is applying or 
in which the person is employed;
    (2) The nature and seriousness of the conduct;
    (3) The circumstances surrounding the conduct;
    (4) The recency of the conduct;
    (5) The age of the person involved at the time of the conduct;
    (6) Contributing societal conditions; and
    (7) The absence or presence of rehabilitation or efforts toward 
rehabilitation.


Sec. 731.203  Actions by OPM and other agencies.

    (a) List of actions. For purposes of this part, an action is one or 
more of the following:
    (1) Cancellation of eligibility;
    (2) Denial of appointment;
    (3) Removal;
    (4) Cancellation of reinstatement eligibility;
    (5) Debarment.
    (b) An applicant's eligibility may be cancelled, an applicant may 
be denied employment, or an appointee may be removed when OPM or an 
agency exercising delegated authority under this part finds that the 
applicant or appointee is unsuitable for the reasons cited in 
Sec. 731.202 subject to the agency limitations of Sec. 731.103(a).
    (c) OPM may require that an employee be removed on the basis of a 
material, intentional false statement, or deception or fraud in 
examination or appointment; or refusal to furnish testimony; or a 
statutory or regulatory bar. OPM may also cancel any reinstatement 
eligibility obtained as a result of false statement, deception or fraud 
in the examination or appointment process.
    (d) An action to remove an appointee or employee for suitability 
reasons under this part is not an action under parts 752 or 315 of this 
title. Where behavior covered by this part may also form the basis for 
a part 752 or 315 action, agencies may use part 315 or 752, as 
appropriate, instead of this part.
    (e) Agencies are required to report to OPM all unfavorable 
adjudicative actions taken under this part, and all actions based on an 
OPM investigation.


Sec. 731.204  Debarment by OPM.

    (a) When OPM finds a person unsuitable for any reason listed in 
Sec. 731.202, OPM, in its discretion, may deny that person examination 
for, and appointment to, a competitive service position for a period of 
not more than 3 years from the date of determination of unsuitability.
    (b) On expiration of a period of debarment, OPM or an agency may 
redetermine a person's suitability for appointment in accordance with 
the procedures of this part.
    (c) OPM, in its sole discretion, determines the duration of any 
period of debarment imposed under this section.


Sec. 731.205  Debarment by agencies.

    (a) Subject to the provisions of Sec. 731.103, when an agency finds 
an applicant or appointee unsuitable for reasons listed in 
Sec. 731.202, the agency may deny that person examination for, and 
appointment to, all, or specific,, positions within the agency for a 
period of not more than 1 year from the date of determination of 
unsuitability.
    (b) On expiration of a period of agency debarment, the agency may 
redetermine a person's suitability for appointment by the agency, in 
accordance with the procedures of this part.
    (c) The agency is responsible for enforcing the period of debarment 
and taking appropriate action should the individual apply or be 
inappropriately appointed during the debarment period. This does not 
limit OPM's ability to exercise jurisdiction and take an action if it 
deems appropriate.

[[Page 82246]]

    (d) The agency, in its sole discretion, determines the duration of 
any period of debarment imposed under this section.

Subpart C--OPM Suitability Action Procedures


Sec. 731.301  Scope.

    (a) Coverage. This subpart sets forth the procedures to be followed 
when OPM proposes to take, or instructs an agency to take, a final 
suitability action against an applicant, appointee or employee.
    (b) Definition. In this subpart, days means calendar days.


Sec. 731.302  Notice of proposed action.

    (a) OPM shall notify the applicant, appointee, or employee 
(hereinafter, the ``respondent'') in writing of the proposed action and 
of the charges against the respondent (including the availability for 
review, upon request, of the materials relied upon). The notice shall 
state the specific reasons for the proposed action and that the 
respondent has the right to answer the notice in writing. If the 
respondent is an employee, the notice shall further state that the 
employee may also make an oral answer, as specified in Sec. 731.303(a). 
The notice shall further inform the respondent of the time limits for 
response as well as the address to which such response should be made.
    (b) The notice of proposed action shall be served upon the 
respondent by being mailed or hand delivered to the respondent's last 
known residence, and/or duty station, no less than 30 days prior to the 
effective date of the proposed action. If the respondent is employed in 
the competitive service on the date the notice is served, the 
respondent shall be entitled to be retained in a pay status during the 
notice period.
    (c) OPM shall send a copy of this notice to any employing agency 
that is involved.


Sec. 731.303  Answer.

    (a) Respondent's answer. A respondent may answer the charges in 
writing and furnish documentation and/or affidavits in support of the 
response. A respondent who is an employee may also answer orally. The 
respondent may be represented by a representative of the respondent's 
choice, and such representative shall be designated in writing. To be 
timely, a written answer shall be made no more than 30 days after the 
date of the notice of proposed action. In the event an employee 
requests to make an oral answer, the request must be made within this 
30 day time frame, and OPM shall determine the time and place thereof, 
and shall consider any answer the respondent makes in reaching a 
decision.
    (b) Agency's answer. An employing agency may also answer the notice 
of proposed action. The time limit for filing an answer is 30 days from 
the date of the notice. OPM shall consider any answer the agency makes 
in reaching a decision.


Sec. 731.304  Decision.

    The decision shall be in writing, dated, and inform the respondent 
of the reasons for the decision. The employing agency shall remove the 
appointee or employee from the rolls within 5 work days of receipt of 
OPM's final decision. The respondent shall also be informed that an 
adverse decision can be appealed in accordance with subpart DE of this 
part. OPM shall also notify the respondent's employing agency of its 
decision.

Subpart D--Agency Suitability Action Procedures


Sec. 731.401  Scope.

    (a) Coverage. This subpart sets forth the procedures to be followed 
when an agency proposes to take a final suitability action against an 
applicant or appointee.
    (b) Definition. In this subpart, days mean calendar days.


Sec. 731.402  Notice of proposed action.

    The agency shall provide the applicant or appointee (hereinafter, 
the ``respondent'') reasonable notice in writing of the proposed action 
and of the charges against the respondent (including the availability 
for review, upon request, of the materials relied upon). The notice 
shall state the specific reasons for the proposed action, and that the 
respondent has the right to answer the notice in writing. The notice 
shall inform the respondent of the time limits for response as well as 
the address to which such response should be made. If the respondent is 
employed in the competitive service on the date the notice is served, 
the respondent shall be entitled to be retained in a pay status during 
the notice period.


Sec. 731.403  Answer.

    A respondent may answer the charges in writing and furnish 
documentation and/or affidavits in support of the response.


Sec. 731.404  Decision.

    The decision shall be in writing, dated, and inform the respondent 
of the reasons for the decision. The respondent shall also be informed 
that an adverse decision can be appealed in accordance with subpart E 
of this part. The employing agency shall remove an appointee from the 
rolls within 5 work days of their final decision.

Subpart E--Appeal to the Merit Systems Protection Board


Sec. 731.501  Appeal to the Merit Systems Protection Board.

    (a) Appeal to the Merit Systems Protection Board. An individual who 
has been found unsuitable for employment may appeal the determination 
to the Merit Systems Protection Board. If the Board finds that one or 
more charges are supported by a preponderance of the evidence, it shall 
affirm the determination. If the Board sustains fewer than all the 
charges, the Board shall remand the case to OPM or the agency to 
determine whether the action taken is still appropriate based on the 
sustained charge(s). This determination of whether the action taken is 
appropriate shall be final without any further appeal to the Board.
    (b) Appeal procedures. The procedures for filing an appeal with the 
Board are found at part 1201 of this chapter.

Subpart F--Savings Provision


Sec. 731.601  Savings provision.

    No provision of the regulations in this part shall be applied in 
such a way as to affect any administrative proceeding pending on 
January 29, 2001. An administrative proceeding is deemed to be pending 
from the date of the agency or OPM ``notice of proposed action'' 
described in Sec. 731.402.

[FR Doc. 00-33114 Filed 12-27-00; 8:45 am]
BILLING CODE 6325-01-P