[Federal Register: July 30, 1999 (Volume 64, Number 146)]
[Proposed Rules]
[Page 41334-41336]

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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 mkstaten@opm.gov.

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