[Federal Register Volume 84, Number 64 (Wednesday, April 3, 2019)]
[Rules and Regulations]
[Pages 12873-12876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06396]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 84, No. 64 / Wednesday, April 3, 2019 / Rules
and Regulations
[[Page 12873]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 337
RIN 3206-AN65
Examining System
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing a final
regulation to implement changes to part 337 of OPM's regulations, which
govern direct hire authority. Executive Order (E.O.) 13833, ``Enhancing
the Effectiveness of Agency Chief Information Officers'' requires OPM
to issue proposed regulations delegating to the head of a covered
agency authority necessary to determine whether there is a severe
shortage of candidates or a critical hiring need for information
technology (IT) positions, under criteria established by OPM. OPM
published the proposed regulations, has considered proposed comments,
and has now determined to adopt a final rule making this change. The
intended effect of this change is to enable Chief Information Officers
to hire urgently needed IT professionals more quickly.
DATES: This rule is effective May 3, 2019.
FOR FURTHER INFORMATION CONTACT: Darlene Phelps by telephone on (202)
606-0960, by fax (202) 606-4430, by TTY at (202) 418-3134, or by email
at [email protected].
SUPPLEMENTARY INFORMATION: On October 29, 2018, OPM issued proposed
regulations at 83 FR 209, as contemplated by E.O. 13833, ``Enhancing
the Effectiveness of Agency Chief Information Officers.'' Section 9 of
the E.O. directed OPM to propose regulations pursuant to which OPM
could delegate to the heads of certain agencies (other than the
Secretary of Defense) authority to determine, under regulations
prescribed by OPM, whether a severe shortage of candidates (or, for the
U.S. Department of Veterans Affairs (VA) a severe shortage of highly-
qualified candidates) or a critical hiring need exists for positions in
the Information Technology Management series, general schedule (GS)-
2210, for purposes of demonstrating a need for a Direct Hire Authority.
The agencies covered by the E.O. are those listed in 31 U.S.C. 901(b),
or independent regulatory agencies defined in 44 U.S.C. 3502(5). OPM
received seven sets of comments in response to the proposed rule. A
discussion of these comments follows.
Discussion of Comments
One individual expressed general support for the proposed rule, and
opined that the risk and cost of potential cronyism is an acceptable
opportunity cost of a direct hire authority. As a general matter,
Congress has determined that in cases where a severe shortage or
critical hiring need exists, direct hire authority is justified as a
legitimate exception from the normal rules of competitive hiring. The
use of the authority is subject to Merit System Principles, which
include requirements that selection and advancement be determined
solely on the basis of relative ability, knowledge and skills,
regardless of the hiring authority used to fill a position. Further,
OPM contends that the opportunity cost for cronyism, favoritism, and
nepotism is not only the highest cost that a Government can pay, but is
fundamentally at odds with Civil Service law. In accordance with
statute, OPM's regulations prescribe the criteria that must be met in
order to authorize direct hire authority, consistent with Congressional
intent. In addition, OPM will take the following steps to help ensure
this DHA is used appropriately by Federal agencies: (1) OPM will update
its guidance on DHA at https://www.opm.gov/policy-data-oversight/hiring-information/direct-hire-authority/ with an emphasis to hiring
managers and human resources personnel that when using DHA agencies are
required to employ an objective selection process, such as selecting
qualified candidates (including individuals entitled to veterans'
preference) as they are found; (2) OPM will provide agencies with
interactive sessions on how to use DHA, aimed at hiring managers and
human resources personnel, through a variety of media: (3) OPM will
review and monitor agencies' use of this authority, including hiring
patterns, etc. Furthermore, the proposed regulation requires agencies
to notify OPM when an agency head authorizes DHA and to provide to us
the justification on which the approval was based. OPM is retaining
this requirement in the final rule so that OPM will know which agencies
are using this DHA, and can provide oversight to ensure that it is
being used appropriately.
Another individual commented on the severity of the wildfire season
in 2018. OPM is not addressing this comment as it not within the scope
of the proposed regulation.
A representative from an internet-based professional networking
service suggested the final rule should encourage agencies to use this
hiring flexibility. OPM is not adopting this suggestion. Each agency
must decide independently whether its particular circumstances justify
the need for a DHA in accordance with the statutory and regulatory
criteria required for an approval.
The same individual suggested the internet-based professional
networking service could help agencies determine when to implement DHA,
based on the presence of competitors for the same skill-sets for which
the agency is recruiting. OPM is not accepting this comment both
because it is, in part, beyond the scope of this regulation and because
it proceeds from a faulty premise as to the applicable standards that
govern when a direct hire authority is appropriate. In using this
delegation of authority, agencies must apply the provisions of 5 CFR
part 337, 5 CFR part 330 subparts F and G. In doing so, agencies may
rely upon a variety of data sources to gauge, in part, the availability
of skill-sets to determine the presence of a severe shortage of
candidates in accordance with 5 CFR 337.204. We also note that agencies
must provide public notice of any vacancy to be filled through a direct
hire authority, in accordance with 5 U.S.C. 3304(a)(3)(A) and 5 CFR
330.104.
Another individual commented that agencies may find recruitment of
skilled IT professionals using this authority difficult if the hiring
agency cannot match the level of salary and benefits
[[Page 12874]]
offered by private sector employers. The commenter also suggested that
OPM take steps to encourage agencies to use this authority to their
advantage. The first comment is, essentially, an observation and thus
does not require a response. OPM is not adopting the second suggestion.
As noted above, each agency must decide independently whether its
particular circumstances meet the statutory and regulatory criteria and
thus justify using this delegation of authority. OPM provides guidance
to agencies on DHA at: https://www.opm.gov/policy-data-oversight/hiring-information/direct-hire-authority/ authority/.
One commenter expressed concern that this authority will be used by
agencies to avoid applying veterans' preference when filling IT jobs.
This commenter stated, ``Direct hire authority is often nothing more
than a work around for statutory veterans' preference rights. At a
minimum, there should be an objective and impartial review of the facts
supporting a direct hire authority, and having each agency be its own
judge and jury, as OPM is proposing, is fraught with problems. In my
agency, we get many qualified applicants for IT jobs, so there is no
shortage of good candidates. We are going to get a lot of pressure to
do direct hire just to avoid having to hire well qualified veterans.
This is bad for veterans and bad for civil service. Maybe agencies
should have to show their veterans hiring numbers are good before they
can use the direct hire.''
Another individual expressed a similar concern about the impact of
this authority on veterans' preference and asked that OPM conduct
rigorous reviews of agencies who use this authority. This individual
commented, ``I am writing concerning the proposal to grant agency heads
the authority to determine which IT specialties may fall under the
direct hire authority. In the last five years that I have been involved
in staffing, to include a stint as the chief of our Delegated Examining
Unit, it has been my experience that we usually receive large numbers
of best qualified candidates for IT Specialist job announcements. When
selecting officials in the agency complain about a certificate we
issue, the basis for the complaint is that veterans with preference are
the only applicants on the certificate. In our agency, approximately 70
percent of the IT workforce are contractors, and usually the selecting
official wishes to hire one of his or her contractors that is not
within reach because they are not a veteran with preference. My agency
has a practice of announcing most positions for five days, yet we still
average 50 to 100 or more applicants for each IT Specialist position we
advertise. I fear agencies will mis-use the proposed direct hire
authority to essentially make the entire IT Specialist, GS-2210
occupation direct hire. OPM will need to institute rigorous review of
agencies who use the authority to ensure they do not abuse it; however,
personally I think the proposed direct hire authority is an invitation
to agencies to circumvent veterans' preference. As I stated above,
selecting officials object to certificates with plenty of best-
qualified veterans, not because of qualifications, but because of the
inability to select contractors currently working in their
organization.''
In response to the overall concern regarding veterans' preference,
OPM is strongly committed to connecting the brave men and women who
serve our Nation with opportunities to continue their service in the
Federal workforce. OPM will continue our close coordination with the
Department of Labor and Department of Veterans Affairs as required
under E.O. 13518, which established the Veterans Employment Initiative.
Additionally, OPM will continue our efforts across government to
support agencies as they seek to hire veterans.
With respect to the first comment, OPM agrees with the need for an
`objective and impartial review of the facts supporting a direct hire
authority.' The final rule provides this mechanism by establishing OPM
as the impartial reviewer. The rule requires that when using this
authority, an agency head must authorize DHA based on justification
provided by the agency's Chief Human Capital Officer (or equivalent) in
accordance with the provisions and criteria specified in 5 CFR part
337. Further, once an agency head authorizes DHA using this criteria
the deciding agency is required to provide the determination and a
description of the supporting evidence to OPM. OPM may request access
to the underlying documentation at any time, and may require corrective
action in accordance with 5 U.S.C. 1104(c) and section 337.206 of the
regulation. In accordance with 5 CFR 337.206 OPM will monitor agencies'
use of DHA under this authority and may terminate or modify any DHA if
OPM finds the basis on which such DHA was granted no longer exists, or
when an agency has used an authority improperly. Regarding the
commenter's concern that an agency may authorize DHA when a lack of
qualified IT applicants exists, 5 CFR 337.206 requires agencies to
notify OPM when the agency finds adequate numbers of qualified
candidates previously filled under DHA based on a severe shortage of
candidates. OPM will make this requirement a point of emphasis in its
updated guidance and technical assistance. In addition, OPM will rely
on a variety of data sources to monitor how DHA's under this authority
are being utilized, to include the availability of qualified applicants
as captured through USAJOBS and USASTAFFING data, nationwide labor
trends on the availability of IT specialists in the general labor pool,
the results of agencies' past attempts to fill IT jobs through other
hiring mechanisms, the number of pass over request made for preference-
eligible veterans initially deemed to be qualified for these DHA
covered IT positions, and the number of selections of qualified
preference-eligible veterans hired under this authority. In addition
OPM's Merit System Accountability and Compliance reports, which are
periodic reviews of agency hiring practices, will also serve provide an
objective basis on which to gauge how agencies are using this DHA.
With respect to the second comment, OPM agrees that oversight by
OPM is necessary. We believe that current statutory and regulatory
authority exists in order for us to do so. In addition to the checks
and measures described in the preceding paragraph OPM notes that any
delegation of authority provided by OPM under 5 U.S.C. 1104(b)(2)
requires a corresponding oversight program for use of the delegation.
To facilitate this process OPM will be establishing a unique authority
code for this DHA which will assist us in monitoring each agency's use
of this authority.
A Federal agency questioned the effectiveness of the time
limitations on appointments made under this authority. The agency noted
that IT modernization may be a permanent or on-going endeavor and
suggested OPM provide for permanent appointments under this authority.
OPM is not adopting this suggestion. We are adopting the time limits on
appointments as proposed. Our rationale for doing so is to attune these
rules with the hiring patterns of the twenty first century, in
particular those of the IT workforce. Agencies are making greater use
of time-limited employees than in the past and are expected to continue
to do so. Likewise, many individuals prefer Federal employment that is
characterized by a time-limited or project nature, with movement in and
out of public service, rather than the traditional 30-year career
model. Agencies with a need to make appointments of IT personnel on a
permanent basis in response to a critical
[[Page 12875]]
hiring need or severe shortage of candidates may continue to request
DHA from OPM pursuant to Subpart B of 5 CFR part 337. OPM retains the
ability to authorize DHA to agencies, in appropriate circumstances,
when presented with a well-justified request for DHA to fill positions
on a permanent basis.
OPM is adopting the proposed rule without change.
Regulatory Flexibility Act
I certify that this regulation would not have a significant
economic impact on a substantial number of small entities because it
affects only Federal agencies and employees.
E.O. 13563 and E.O. 12866, Regulatory Review
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing benefits, of harmonizing rules, and of promoting
flexibility. This final rule is not a ``significant regulatory
action,'' under Executive Order 12866.
Executive Order 13771: Reducing Regulation and Controlling Regulatory
Costs
This final rule is not an E.O. 13771 (82 FR 9339, February 3, 2017)
action because this rule is not significant under E.O. 12866.
E.O. 13132, Federalism
This regulation will not have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this rule does not have sufficient
federalism implications to warrant preparation of a Federalism
Assessment.
E.O. 12988, Civil Justice Reform
This regulation meets the applicable standard set forth in section
3(a) and (b)(2) of Executive Order 12988.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local or
tribal governments of more than $100 million annually. Thus, no written
assessment of unfunded mandates is required.
Congressional Review Act
This action pertains to agency management, personnel and
organization and does not substantially affect the rights or
obligations of non-agency parties and, accordingly, is not a ``rule''
as that term is used by the Congressional Review Act (Subtitle E of the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)).
Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)
This final regulatory action will not impose any additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act.
Lists of Subjects in 5 CFR Part 337
Government employees.
Office of Personnel Management.
Steve Hickman,
Regulatory Affairs Analyst.
Accordingly, OPM is revising 5 CFR part 337 of title 5, Code of
Federal Regulations, as follows:
PART 337--EXAMINING SYSTEM
0
1. Revise the authority citation for part 337 to read as follows:
Authority: 5 U.S.C. 1104(a), 1302, 2302, 3301, 3302, 3304,
3319, 5364; E.O. 10577, 3 CFR 1954-1958 Comp., p. 218; 33 FR 12423,
Sept. 4, 1968; and 45 FR 18365, Mar. 21, 1980; 116 Stat. 2135, 2290;
117 Stat. 1392, 1665; and E.O. 13833.
Subpart B--Direct Hire Authority
0
2. In Sec. 337.204, add paragraph (d) to read as follows:
Sec. 337.204 Severe shortage of candidates.
* * * * *
(d) Information Technology (IT) positions. (1) The head of a
covered agency, as defined in paragraph (d)(2) of this section, may
determine whether a severe shortage of candidates exists at that agency
for any position in the information technology management series,
general schedule (GS)-2210 or equivalent. In making such a
determination, a covered agency must adhere to and use the supporting
evidence prescribed in 5 CFR 337.204(b)(1)-(8). For purposes of
paragraph (b)(5) of this section, the U.S. Department of Veterans
Affairs (VA) need only determine whether a severe shortage of highly-
qualified candidates exists. In addition, a covered agency must
maintain a file of the supporting evidence for documentation and
reporting purposes. Upon determination of such a finding, an agency
head may approve a direct hire authority for covered positions within
the agency.
(2) Covered agency. A covered agency is an entity listed in 31
U.S.C. 901(b) (except the Department of Defense), or an independent
regulatory agency defined in 44 U.S.C. 3502(5).
(3) Notification to the U.S. Office of Personnel Management (OPM).
Once the head of a covered agency affirmatively determines the presence
of a severe shortage and the direct hire authority is approved by the
agency head, he or she must notify OPM within 10 business days. Such
notification must include a description of the supporting evidence
relied upon in making the determination.
(4) Using this authority. A covered agency must adhere to all
provisions of subpart B of this part.
(5) Length of appointments. A covered agency may use this authority
to appoint individuals for a period of more than 1 year, but not more
than 4 years.
(i) A covered agency may extend any appointment under this
authority for up to 4 additional years, if the direct hire authority
remains in effect.
(ii) No individual may serve more than 8 years on an appointment
made under these provisions for information technology positions.
(iii) No individual hired under these provisions may be transferred
to positions that are not IT positions.
0
3. In Sec. 337.205, add paragraph (c) to read as follows:
Sec. 337.205 Critical hiring needs.
* * * * *
(c) Information Technology (IT) positions. (1) The head of a
covered agency, as defined in paragraph (c)(2) of this section, may
determine whether a critical hiring need exists for any position in the
information technology management series, general schedule (GS)-2210 or
equivalent. In making such a determination, a covered agency must
adhere to and use the supporting evidence criteria prescribed in
paragraphs (b)(1) through (4) of this section. In addition, a covered
agency must maintain a file of the supporting evidence for
documentation and reporting purposes. Upon determination of such a
finding, an agency head may approve a direct hire authority for covered
positions within the agency.
(2) Covered agency. A covered agency is an entity listed in 31
U.S.C. 901(b) (excluding the Department of Defense),
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or an independent regulatory agency defined in 44 U.S.C. 3502(5).
(3) Notification to the U.S. Office of Personnel Management (OPM).
Once the head of a covered agency affirmatively determines the presence
of a critical hiring need and the direct hire authority is approved by
the agency head, he or she must notify OPM within 10 business days.
Such notification must include a description of the supporting evidence
relied upon in making the determination.
(4) Using this authority. A covered agency must adhere to all
provisions of subpart B of this part.
(5) Length of appointments. A covered agency may use this authority
to appoint individuals for a period of more than 1 year, but not more
than 4 years, if the direct hire authority remains in effect.
(i) A covered agency may extend an appointment under this authority
for up to 4 additional years.
(ii) No individual may serve more than 8 years on an appointment
made under these provisions for information technology positions.
(iii) No individual hired under these provisions may be transferred
to positions that are not IT positions.
[FR Doc. 2019-06396 Filed 4-2-19; 8:45 am]
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