House panel approves overhaul of Defense personnel system

The House Government Reform Committee approved legislation late Wednesday that would overhaul the civilian personnel system at the Defense Department, as well as give broad personnel flexibilities to NASA and the Securities and Exchange Commission.

"It is time to bring these three agencies-and ultimately the rest of the federal government-into the 21st century," Chairman Tom Davis, R-Va., said in a statement issued after the bill was approved. "Without the ability to recruit and retain the best and the brightest employees, modernization will never become a reality."

The measure (H.R. 1836), which was approved by voice vote, lets Defense scrap the General Schedule pay system and implement a pay-banding system, create a separate pay structure for managers, and modify job classifications, hiring authorities, pay administration and reduction-in-force procedures. The legislation also eliminates automatic annual pay increases, and authorizes the creation of a pay-for-performance fund managers can use to boost the salaries of high-performing employees.

The bill grants NASA several employee recruitment and retention flexibilities, such as student loan forgiveness, relocation bonuses, special pay authority, term appointment authority, a science and technology scholarship program and recruitment bonuses. A fast track hiring authority to help the SEC quickly hire more than 800 accountants, economists and securities compliance examiners was also included in the bill.

Ranking Member Henry Waxman, D-Calif., said approving the bill would give Defense officials a "blank check," with which they could abuse the rights of civilian employees. "Why do they need such blanket waivers?" he asked.

Waxman and other Democrats repeatedly questioned why the bill was being shuttled so quickly through the committee and complained of having too little time to review the legislation, which likely would be the baseline for governmentwide civil service reform.

"Lets take the time to be deliberative," said Rep. Danny Davis, D-Ill. "There's no need to go galloping into the sunset."

But Chairman Davis dismissed those concerns, contending that a delayed vote on the bill would prevent the Defense Department from attracting the talent it needs to ensure national security. "I think the issue is, are we going to move ahead on this today and give the Defense Department the flexibilities it needs," he said.

Rep. Jo Ann Davis, R-Va., chairwoman of the Subcommittee on Civil Service and Agency Organization, offered four amendments that passed by voice vote. The amendments would:

• Remove language waiving Hatch Act and other ethics rules.
• Allow DoD to waive the portions of Title 5 that deal with performance appraisals, job classifications, pay rates, pay systems, collective bargaining rights, due process and appeal rights. This would allow DoD to create a pay-for-performance system.
• Allow the Defense secretary to craft personnel regulations needed for national security without consulting with the Office of Personnel Management.
• Require employee input during the development of workforce plans at NASA.

Insisting the legislation was premature and overreaching, Rep. Jim Cooper, D-Tenn., offered an amendment that would allow Defense to take up to one year to retool its proposal and resubmit it to Congress. The amendment was defeated 24 to 16.

"No one disputes the good intentions behind this bill, but we're lawmakers, not good intention makers," Cooper said. "There's a difference between flexibility and a blank check. Let's put in place statutes that no future secretary of Defense could undermine."

Chairman Davis and Rep. Mark Souder, R-Ind., argued that the bill included sufficient safeguards.

"Quite frankly, I think this is overdue," Davis said about the legislation. "We want to reward hard work, we want to reward merit."

An amendment offered by John McHugh, R-N.Y., requires the Defense secretary to establish an appeals process for employees, as well as create an independent review board for employee appeals. "I think we owe it to the employees ... if nothing else, to ensure that they have an independent appeals process," McHugh said.

The Hughes amendment passed by voice vote after an addition by Del. Eleanor Holmes Norton, D-D.C., who asked that the Equal Employment Opportunity Commission be part of the independent review board and that no Defense employee be allowed to sit on the board. Norton offered two amendments to the McHugh amendment that failed on voice vote.

To ensure any performance appraisal system implemented at the Defense Department included various safeguards, Rep. Tim Murphy, R-Penn., offered an amendment outlining specific elements to be included in the agency's performance management system. The measure was approved by voice vote. A second Murphy amendment incorporates those same safeguards in pay-for-performance demonstration projects. The committee passed the second amendment on voice vote.

An amendment offered by Rep. Chris Van Hollen, D-Md., allows federal agencies to use payroll tax savings to pay the administrative fees associated with Flexible Spending Accounts. The Office of Personnel Management plans to start offering the new benefit in July. The measure was supported by Chairman Davis and approved on voice vote.

Rep. Danny Davis offered an amendment that will prohibit the Office of Management and Budget from imposing quotas in public-private competitions. Chairman Davis offered an amendment to the Illinois Democrat's amendment, that will allow quotas if the decision is based on research and sound analysis. The two amendments were approved by voice vote.

The committee approved the Davis substitute amendment by voice vote, and the amended bill was approved by a vote of 21 to 15.