a

GAO

United States Government Accountability Office

Report to Congressional Committees

July 2005 HUMAN CAPITAL

DOD’s National 

Security Personnel 

System Faces 

Implementation 

Challenges

GAO-05-730
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-730.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Derek B. 

Stewart at (202) 512-5559 or 

stewartd@gao.gov. 

Highlights of GAO-05-730, a report to 

Congressional Committees 

July 2005

HUMAN CAPITAL

DOD's National Security Personnel 

System Faces Implementation Challenges 

DOD’s current process to design its new personnel management system 

consists of four stages: (1) development of design options, (2) assessment of

design options, (3) issuance of proposed regulations, and (4) a statutory 

public comment period, a meet and confer period with employee 

representatives, and a congressional notification period. DOD’s initial 

design process was unrealistic and inappropriate. However, after a strategic 

reassessment, DOD adjusted its approach to reflect a more cautious and 

deliberative process that involved more stakeholders. 

DOD’s NSPS design process generally reflects four of six selected key 

practices for successful organizational transformations. First, DOD and 

OPM have developed a process to design the new personnel system that is 

supported by top leadership in both organizations. Second, from the outset, 

a set of guiding principles and key performance parameters have guided the 

NSPS design process. Third, DOD has a dedicated team in place to design 

and implement NSPS and manage the transformation process. Fourth, DOD 

has established a timeline, albeit ambitious, and implementation goals. The 

design process, however, is lacking in two other practices. First, DOD 

developed and implemented a written communication strategy document, 

but the strategy is not comprehensive. It does not identify all key internal 

stakeholders and their concerns, and does not tailor key messages to 

specific stakeholder groups. Failure to adequately consider a wide variety of 

people and cultural issues can lead to unsuccessful transformations. 

Second, while the process has involved employees through town hall 

meetings and other mechanisms, it has not included employee 

representatives on the working groups that drafted the design options. It 

should be noted that 10 federal labor unions have filed suit alleging that DOD

failed to abide by the statutory requirements to include employee 

representatives in the development of DOD’s new labor relations system 

authorized as part of NSPS. A successful transformation must provide for 

meaningful involvement by employees and their representatives to gain their 

input into and understanding of the changes that will occur. 

DOD will face multiple implementation challenges. For example, in addition 

to the challenges of continuing to involve employees and other stakeholders 

and providing adequate resources to implement the system, DOD faces the 

challenges of ensuring an effective, ongoing two-way communication 

strategy and evaluating the new system. In recent testimony, GAO stated 

that DOD’s communication strategy must include the active and visible 

involvement of a number of key players, including the Secretary of Defense, 

for successful implementation of the system. Moreover, DOD must ensure 

sustained and committed leadership after the system is fully implemented 

and the NSPS Senior Executive and the Program Executive Office transition 

out of existence. To provide sustained leadership attention to a range of 

business transformation initiatives, like NSPS, GAO recently recommended 

the creation of a chief management official at DOD. 

The Department of Defense’s 

(DOD) new personnel systemthe 

National Security Personnel 

System (NSPS)will have farreaching implications not just for 

DOD, but for civil service reform 

across the federal government. 

The National Defense 

Authorization Act for Fiscal Year 

2004 gave DOD significant 

authorities to redesign the rules, 

regulations, and processes that 

govern the way that more than 

700,000 defense civilian employees 

are hired, compensated, promoted, 

and disciplined. In addition, NSPS 

could serve as a model for 

governmentwide transformation in 

human capital management. 

However, if not properly designed 

and effectively implemented, it 

could severely impede progress 

toward a more performance- and 

results-based system for the federal 

government as a whole. 

This report (1) describes DOD’s 

process to design its new personnel 

management system, (2) analyzes 

the extent to which DOD’s process 

reflects key practices for 

successful transformations, and (3) 

identifies the most significant 

challenges DOD faces in 

implementing NSPS. 

What GAO Recommends

GAO is making recommendations 

to improve the comprehensiveness 

of the NSPS communication 

strategy and to evaluate the impact 

of NSPS. DOD did not concur with 

one recommendation and partially 

concurred with two others. 
Page i GAO-05-730 Human Capital

Contents

Letter 1

Results in Brief 5

Background 9

NSPS Design Process Evolved Into a Phased Approach 12

DOD’s NSPS Design Process Generally Reflects Practices of 

Successful Transformations, but Some Key Practices

Are Lacking 15

DOD Faces Multiple Challenges in Implementing NSPS 28

Conclusions 31

Recommendations for Executive Action 32

Agency Comments and Our Evaluation 32

Appendixes

Appendix I: Scope and Methodology 37

Appendix II: DOD Labor Unions, Estimated Number of Employees 

Represented, and Membership in the United Defense 

Workers Coalition 40

Appendix III: Comments from the Department of Defense 42

Appendix IV: GAO Contact and Staff Acknowledgments 47

Related GAO Products 48

Tables Table 1: DOD Labor Unions, Estimated Number of Employees 

Represented, and Membership in the United Defense 

Workers Coalition (as of June 2005). 40

Figures Figure 1: Key Elements of the NSPS Design Process 13

Figure 2: NSPS Design and Implementation Team Organization 21

Figure 3: NSPS Timeline and Implementation Goals 23
Contents

Page ii GAO-05-730 Human Capital

Abbreviations

DOD Department of Defense

NSPS National Security Personnel System

OIPT Overarching Integrated Product Team

OPM Office of Personnel Management

PEO Program Executive Office

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Page 1 GAO-05-730 Human Capital

United States Government Accountability Office

Washington, D.C. 20548

A

July 14, 2005 Letr

Congressional Committees

The Department of Defense (DOD) is designing a new civilian personnel 

management system—the National Security Personnel System (NSPS)—

that represents a huge undertaking for DOD, given its massive size and 

geographically and culturally diverse workforce. The National Defense 

Authorization Act for Fiscal Year 20041

 gave DOD significant authorities to 

redesign the rules, regulations, and processes that govern the way that 

more than 700,000 defense civilian employees are hired, compensated, 

promoted, and disciplined. The Congress provided these authorities to 

DOD in response to the department’s position that the inflexibility of 

federal personnel systems was one of the most important constraints on its 

ability to attract, retain, reward, and develop a civilian workforce to meet 

the national security mission of the 21st century. In addition, DOD’s new 

personnel management system will have far-reaching implications, not just 

for DOD, but for civil service reform across the federal government. NSPS 

could serve as a model for governmentwide transformation in human 

capital management. However, if not properly designed and effectively 

implemented, NSPS could severely impede progress toward a more 

performance- and results-based personnel management system for the 

federal government as a whole.

Implementing large-scale change management initiatives, such as 

organizational transformations, can be a complex endeavor. Experience 

shows that failure to adequately address—and often even consider—a wide 

variety of personnel and cultural issues is at the heart of unsuccessful 

transformations. In our prior work, we identified nine key practices and 

lessons learned from major public and private sector organizational 

mergers, acquisitions, and transformations.2

 These practices are to

(1) ensure top leadership drives the transformation, (2) establish a 

coherent mission and integrated strategic goals to guide the 

transformation, (3) focus on a key set of principles and priorities at the 

1

Pub. L. No. 108-136, § 1101 (Nov. 24, 2003).

2

See GAO, Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned for 

a Department of Homeland Security and Other Federal Agencies, GAO-03-293SP

(Washington, D.C.: Nov. 14, 2002) and Results-Oriented Cultures: Implementation Steps to 

Assist Mergers and Organizational Transformations, GAO-03-669 (Washington, D.C.: July 

2, 2003).
Page 2 GAO-05-730 Human Capital

outset of the transformation, (4) set implementation goals and a timeline to 

build momentum and show progress from day one, (5) dedicate an 

implementation team to manage the transformation process, (6) use the 

performance management system to define responsibility and assure 

accountability for change, (7) establish a communication strategy to create 

shared expectations and report related progress, (8) involve employees to 

obtain their ideas and gain their ownership for the transformation, and 

(9) build a world-class organization.

In recent years, we have examined various aspects of DOD’s human capital 

management of its civilian workforce. For example, we have reported on 

gaps in the defense components’ civilian human capital plans, including the 

absence of results-oriented performance measures3

 and the need for 

comprehensive strategic workforce plans and for data on the skills and 

competencies needed to successfully accomplish future missions.4

 Prior to 

the enactment of NSPS legislation in November 2003, we raised a number 

of critical issues about the proposed system in a series of testimonies 

before three congressional committees.5

 In recent testimony on DOD’s 

transformation efforts, we indicated that DOD is challenged in its efforts to 

affect fundamental business management reform, such as NSPS, and 

indicated that our ongoing work continues to raise questions about DOD’s 

chances of success.6

 Our recently released report on the fiscal challenges 

the federal government faces in the 21st century identifies several issues 

regarding DOD’s civilian workforce that are ripe for reexamination, 

including whether DOD is pursuing the design and implementation of NSPS

3

GAO, DOD Personnel: DOD Actions Needed to Strengthen Civilian Human Capital 

Strategic Planning and Integration with Military Personnel and Sourcing Decisions, 

GAO-03-475 (Washington, D.C.: Mar. 28, 2003).

4

GAO, DOD Civilian Personnel: Comprehensive Strategic Workforce Plans Needed, 

GAO-04-753 (Washington, D.C.: June 30, 2004).

5

See GAO, Defense Transformation: Preliminary Observations on DOD’s Proposed 

Civilian Personnel Reforms, GAO-03-717T (Washington, D.C.: Apr. 29, 2003); Defense 

Transformation: DOD’s Proposed Civilian Personnel System and Governmentwide 

Human Capital Reform, GAO-03-741T (Washington, D.C.: May 1, 2003); and Human 

Capital: Building on DOD’s Reform Effort to Foster Governmentwide Improvements, 

GAO-03-851T (Washington, D.C.: June 4, 2003).

6

GAO, Department of Defense: Further Actions Are Needed to Effectively Address Business 

Management Problems and Overcome Key Business Transformation Challenges, 

GAO-05-140T (Washington, D.C.: Nov. 18, 2004).
Page 3 GAO-05-730 Human Capital

in a manner that maximizes the chance of success.7 To address challenges 

inherent in business transformation reforms, such as NSPS, we recently 

recommended installing a chief management official at DOD.

In 2001, we designated strategic human capital management as a high-risk 

area because of the federal government's long-standing lack of a consistent 

strategic approach to marshaling, managing, and maintaining the human 

capital needed to maximize government performance and ensure its 

accountability.8

 The strategic management of human capital was identified 

as a top priority of the President's Management Agenda in 2001, and the 

Congress also has sought to elevate human capital issues through a wide 

range of initiatives.9

 Significant changes in how the federal workforce is 

managed are under way, but strategic human capital management remains 

high risk because federal human capital strategies are still not 

appropriately constituted to meet current and emerging challenges. These 

challenges include providing the sustained leadership essential to 

completing multiyear transformations, developing effective strategic 

workforce plans, creating effective hiring processes and using flexibilities 

and incentives to retain critical talent and reshape workforces, and 

reforming performance management systems so that pay and awards are 

linked to performance and organizational results.

We prepared this report under the Comptroller General’s authority and are 

providing it to you to assist the Congress in evaluating federal human 

capital management systems. This report addresses DOD’s efforts to design 

its new civilian personnel management system. Specifically, this report (1) 

describes DOD’s process to design its personnel management system, (2) 

7

GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, 

GAO-05-325SP (Washington, D.C.: February 2005).

8

GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 2005), pp. 

41-42.

9

For example, the Congress has taken the following four steps to improve the federal 

government’s human capital management systems: (1) created Chief Human Capital Officer 

positions in 24 federal agencies and a Council to advise and assist agency leaders in their 

human capital efforts; (2) provided several agenciesmost notably the Departments of 

Homeland Security and Defensewith authorities to design and manage their human 

capital systems; (3) provided agencies across the executive branch with additional human 

capital flexibilities, such as specific hiring authorities; and (4) in conjunction with the 

administration, reformed the performance management and compensation systems for 

senior executives to better link the institutional, unit, and individual performance and 

reward systems.
Page 4 GAO-05-730 Human Capital

analyzes the extent to which DOD’s process reflects key practices for 

successful transformations, and (3) identifies the most significant 

challenges DOD faces in implementing NSPS.

To describe DOD’s design process, we interviewed key agency officials at 

DOD and the Office of Personnel Management (OPM), as well as design 

team participants, DOD employee representatives, and experts in federal 

labor relations and federal adverse actions and personnel appeals systems. 

We also examined documents relevant to NSPS design efforts (e.g., focus 

group reports and town hall meeting schedules, requirements and other 

planning documents, and briefings on the results of various design 

options), and applicable laws and regulations governing federal civilian 

personnel management.10 Using six of the nine key practices for 

organizational transformations from our prior work, we determined the 

extent to which DOD’s NSPS design process incorporated key practices of 

successful transformations. The six key practices that we used are: 

(1) ensuring that top leadership drives the transformation, (2) focusing on a 

key set of principles and priorities, (3) setting implementation goals and a 

timeline, (4) dedicating an implementation team, (5) establishing a 

communication strategy, and (6) involving employees. We did not evaluate 

the key practices “establishing a coherent mission and integrated strategic 

goals to guide the transformation” because in March 2003, we reported on 

the department’s strategic planning efforts for civilian personnel and 

assessed whether DOD and selected defense components’ goals and 

objectives contained in strategic plans for civilian personnel were aligned 

with overarching missions of the organizations.11 In addition, we did not 

evaluate the key practices of “using a performance management system to 

define responsibility and assure accountability for change” and “building a 

world-class organization” because DOD has considerable work ahead to 

design and implement NSPS and assess the overall system. To identify the 

most significant challenges DOD faced in developing NSPS, we interviewed 

key DOD, OPM, and other federal agency officials and DOD labor union 

representatives (referred to as employee representatives throughout this 

report) and reviewed and analyzed relevant documents.

We conducted our review from October 2004 through June 2005 in 

accordance with generally accepted government auditing standards. 

10Pub. L. No. 108-136, § 1101 (Nov. 24, 2003) and relevant provisions of Title 5, U.S. Code.

11GAO-03-475.
Page 5 GAO-05-730 Human Capital

Additional information on our scope and methodology can be found in 

appendix I. A list of recent GAO products related to DOD’s civilian 

personnel management is included at the end of this report. 

Results in Brief DOD’s current process to design its new personnel management system 

consists of four stages: (1) development of design options, (2) assessment 

of design options, (3) issuance of proposed regulations, and (4) a statutory 

public comment period, a meet and confer period with employee 

representatives, and a congressional notification period. DOD’s initial 

process to design NSPS was unrealistic and inappropriate because of a 

broad range of legal, policy, and technical issues that, according to OPM, 

needed to be addressed. However, after a strategic reassessment of the 

assumptions, roles, strategies, and schedules for the new system, DOD 

adjusted its approach to reflect a more cautious and deliberative process 

that involved more stakeholders, including OPM. Under the adjusted 

approach, senior experts representing various disciplines within DOD, 

OPM, and the Office of Management and Budget established a management 

framework to guide the design and implementation of NSPS, including a 

NSPS Senior Executive and a Program Executive Office (PEO), which was 

based on DOD’s acquisition management model. In the first stage of the 

design process, the PEO formed six multidisciplinary design teams 

(referred to as working groups) that reviewed research on human capital 

approaches, received input from employees and employee representatives, 

and developed a range of potential design options. Second, the design 

options were assessed by an advisory group of senior DOD and OPM 

executives, who made recommendations for proposed regulations to the 

NSPS Senior Executive. The NSPS Senior Executive then submitted his 

recommendations to the Secretary of Defense and the Director of OPM for 

consideration as proposed NSPS regulations. Third, the Secretary and 

Director proposed draft NSPS regulations and jointly released them for 

public comment in the Federal Register on February 14, 2005. Fourth, the 

proposed regulations were subjected to a statutory 30-day public comment 

period, after which DOD held a 30-day meet and confer period with 

employee representatives. As allowed by statute, DOD extended the meet 

and confer process. Lastly, DOD is to engage in a 30-day congressional 

notification period.

DOD’s NSPS design process generally reflects four of six selected key 

practices for successful transformations. First, DOD and OPM have 

developed a process to design the new personnel system that is supported 

by top leadership in both organizations. Top leadership that is clearly 
Page 6 GAO-05-730 Human Capital

involved in transformations provides stability and sets the direction, pace, 

and tone for the transformation. Second, from the outset, a set of guiding 

principles and key performance parameters have guided the NSPS design 

process. These principles and performance parameters can serve as core 

values for human capital management at DOD. Third, DOD has a dedicated 

team in place to design and implement NSPS and manage the 

transformation process. Dedicating an implementation team is important 

to ensuring that the day-to-day management of the transformation receives 

the focused, full-time attention needed to be successful. Fourth, DOD has 

established a timeline, albeit ambitious, and implementation goals for its 

new personnel system. While it is appropriate to develop and integrate 

NSPS within the department in a quick and seamless manner, moving too 

quickly or prematurely can significantly raise the risk of doing it wrong. 

Having an ambitious timeline is reasonable only insofar as it does not 

impact the quality of the human capital management system that is created. 

The design process, however, is lacking in two other practices. First, DOD 

developed and implemented a written communication strategy document 

that provides a structured and planned approach to communicate timely 

and consistent information about NSPS, but the strategy is not 

comprehensive. For example, the written communication strategy 

document does not identify all key internal stakeholders and their 

concerns. Failure to adequately consider a wide variety of people and 

cultural issues can lead to unsuccessful transformations. Furthermore, the 

written communication strategy document does not tailor key messages to 

specific stakeholder groups of employees, such as DOD human resource 

personnel, executives and flag officers, and supervisors and managers, 

even though these employee groups may have divergent interests and 

specific information needs. Tailoring information is important because it 

helps employees feel that their concerns are specifically addressed. An 

organization must develop a comprehensive communications strategy that 

reaches out to employees, customers, and stakeholders and seeks to 

genuinely engage them in the transformation process. Second, while the 

process involved employees through town hall meetings and other 

mechanisms, it has not included employee representatives on the working 

groups that drafted the design options for the new system. It should be 

noted that 10 federal labor unions have filed suit alleging that DOD failed to 

abide by the statutory requirements to include employee representatives in 

the development of DOD’s new labor relations system authorized as part of 

NSPS. The composition of the team is important because it helps 

employees see that they are being represented and that their views are 

being considered in the decision-making process. A successful 

transformation must provide for meaningful involvement by employees and 
Page 7 GAO-05-730 Human Capital

their representatives to, among other things, gain their input into and 

understanding of the changes that will occur in the organization.

As DOD implements its new personnel management system, it will face 

multiple challenges in both the early and later stages of implementation.

Early Implementation 

Challenges

• Establishing an overall communications strategy. Ensuring an 

effective and ongoing two-way communications strategy that creates 

shared expectations about, and reports related progress on, the 

implementation of the new system is a key practice of a change 

management initiative. DOD acknowledges that a comprehensive 

outreach and communications strategy is essential for designing and 

implementing NSPS, but the proposed regulations do not identify a 

process for the continuing involvement of employees during the 

implementation of NSPS.

• Providing adequate resources for implementing the new system.

Another challenge facing DOD is to allocate necessary resources to 

ensure sufficient implementation, training, and evaluation of the new 

system. Implementation of NSPS will result in costs for, among other 

things, developing and delivering training, modifying automated 

personnel information systems, and starting up and sustaining the 

National Security Labor Relations Board. DOD estimates that the overall 

cost associated with implementing NSPS will be approximately $158 

million through fiscal year 2008. However, it has not completed an 

implementation plan for NSPS, including an information technology 

plan and a training plan; thus, the full extent of the resources needed to 

implement NSPS may not be well understood at this time.

• Involving employees and other stakeholders in implementing the 

system. DOD faces a significant challenge in involvingand continuing 

to involveits employees, employee representatives, and other 

stakeholders in implementing NSPS. For example, while providing for 

continuing collaboration with employee representatives, DOD does not 

identify a process for the continuing involvement of employees in the 

implementation of NSPS. High-performing organizations have found 

that actively involving employees and stakeholders, such as unions or 

other employee associations, when developing results-oriented 

performance management systems helps improve employees’ 

confidence and belief in the fairness of the system and increases their 

understanding and ownership of organizational goals and objectives. 
Page 8 GAO-05-730 Human Capital

This involvement must be active and continuing if employees are to gain 

a sense of understanding and ownership of the changes that are being 

made.

Later Implementation 

Challenges

• Ensuring sustained and committed leadership. As DOD implements 

this large-scale organizational change, its challenge will be to elevate, 

integrate, and institutionalize leadership responsibility for NSPS to 

ensure its success. DOD may face a future leadership challenge when 

the NSPS Senior Executive and the PEO transition out of existence once 

NSPS is fully implemented in 2009. According to a PEO official, at that 

time, ongoing implementation responsibility for NSPS would come 

under the Civilian Personnel Management Service, which is part of the 

Office of the Under Secretary of Defense for Personnel and Readiness. 

One way to ensure sustained leadership over NSPS (and all DOD’s 

business transformation efforts) would be to create the position of 

Deputy Secretary of Defense for Management, who would serve as the 

department’s chief management official. This position would elevate, 

integrate, and institutionalize within DOD the high-level attention 

essential for ensuring that a strategic business transformation plan such 

as NSPS—as well as the business policies, procedures, systems, and 

processes that are necessary for successfully implementing and 

sustaining overall business transformation efforts—are implemented 

and sustained.

• Evaluating the new personnel management system. DOD’s ongoing 

challenge will be to continually review and revise NSPS based on datadriven lessons learned and changing needs in the work environment. 

Evaluating the impact of NSPS provides DOD managers with more 

authority and responsibility for managing the new system. Collecting 

and analyzing data will be essential for measuring the effectiveness of 

these approaches in support of DOD’s mission and goals. Adequate 

evaluation procedures of NSPS would facilitate better congressional 

oversight; allow for any midcourse corrections; assist DOD in 

benchmarking its progress with other efforts; and help document best 

practices and lessons learned with employees, stakeholders, other 

federal agencies, and the public. DOD is planning to establish 

procedures to evaluate the implementation of its new personnel 

management system.

We are making three recommendations to improve the comprehensiveness 

of the NSPS communication strategy and to evaluate the impact of NSPS. 
Page 9 GAO-05-730 Human Capital

DOD provided written comments on a draft of this report that did not 

concur with one recommendation and partially concurred with two others. 

In not concurring with our recommendation to identify all key internal 

stakeholders and their concerns, the department stated that, among other 

things, it adopted a multifaceted communications outreach strategy to 

inform and involve key stakeholders. However, our review of DOD’s 

written communication strategy document showed that not all key internal 

stakeholders and their concerns were identified. In partially concurring 

with our recommendation to customize key messages to be delivered to 

groups of employees to meet their divergent needs, the department noted 

that, among other things, it recently released NSPS brochures tailored to 

key internal stakeholders. Our review of these brochures showed that they 

do in fact tailor and customize key messages for some, but not all, 

employee groups. Furthermore, we believe that DOD’s written 

communication strategy document should serve as the single, 

comprehensive source of DOD’s key messages, which are tailored to and 

customized for all employee groups. In partially concurring with our 

recommendation to develop procedures for evaluating NSPS that contain 

results-oriented performance measures and reporting requirements, the 

department stated that it has begun developing an evaluation plan and will 

ensure that the plan contains results-oriented performance measures and 

reporting mechanisms. If the department follows through with this effort, 

we believe that it will be responsive to our recommendation.

Background The National Defense Authorization Act for Fiscal Year 200412 provided 

DOD with authority to establish (1) a pay and performance management 

system, (2) an appeals process, and (3) a labor relations system—which 

together comprise NSPS. The legislation permits significant flexibility for 

designing NSPS, allowing for a new framework of rules, regulations, and 

processes to govern how defense civilian employees are hired, 

compensated, promoted, and disciplined. The law granted DOD certain 

exemptions from laws governing federal civilian personnel management 

found in Title 5 of the U.S. Code.13 The Congress provided these flexibilities 

in response to DOD’s position that the inflexibility of federal personnel 

12Pub. L. No. 108-136, § 1101 (Nov. 24, 2003).

13The Congress did not exempt DOD from provisions of Title 5, U.S. Code, pertaining to 

veterans’ preference, merit systems principles, prohibited personnel practices, and equal 

employment opportunity.
Page 10 GAO-05-730 Human Capital

systems was one of the most important constraints to the department’s 

ability to attract, retain, reward, and develop a civilian workforce to meet 

the national security mission of the 21st century. 

Initial NSPS Design Process The initial proposals for NSPS were developed by DOD and were based on 

a 2002 compilation of best practices generated by demonstration projects 

that experimented with different personnel management concepts. After 

these proposals were sent to OPM for review, OPM identified a broad range 

of legal, policy, and technical concerns, and also noted that the labormanagement relations proposal was developed without any prior OPM 

involvement or union input. OPM also indicated that the initial proposals 

had been crafted with only token employee involvement, and it noted a 

high level of concern expressed by congressional oversight committees, 

stakeholders, and constituent groups. In addition to OPM, assistant 

secretaries for the military services’ manpower organizations also 

expressed concerns that NSPS as designed would not work.

Subsequently, the Secretary of Defense established a 3-week reassessment 

of system requirements, process issues, personnel and communication 

strategies, and program schedules and milestones. The Overarching 

Integrated Product Team (OIPT), an advisory group co-chaired by the 

Principal Deputy Under Secretary of Defense for Personnel and Readiness 

and OPM, and including the military services’ assistant secretaries for 

manpower and reserve affairs, oversaw this reassessment.

Employees Covered by 

NSPS

NSPS labor relations provisions will be implemented across the entire 

department once final NSPS regulations are issued and effective, and they 

will apply to all DOD employees currently covered by the labor relations 

provisions of Title 5, U.S. Code, Chapter 71. In contrast, NSPS regulations 

governing the new pay and performance management system and appeals 

process will be phased in and will not apply to some employees, as 

stipulated by law (e.g., intelligence personnel and employees in DOD’s 

laboratory demonstration organizations). The authorizing legislation 

stipulates that these latter regulations may not apply to organizations with 

more than 300,000 employees until the Secretary of Defense determines 

and certifies that the department has a performance management system in 

place that meets the statutory criteria established for NSPS.

The first phase of implementation—Spiral One—will provide the basis for 

this certification prior to the deployment of Spiral Two. Spiral One includes 
Page 11 GAO-05-730 Human Capital

approximately 300,000 general schedule defense civilian employees, who 

will be converted to the new system over a period of 18 months. DOD 

currently plans to initiate Spiral One, beginning in early fiscal year 2006. 

Spiral Two will include the remainder of DOD’s eligible workforce, 

including wage-grade employees. Spiral Three will apply to demonstration 

laboratory employees no earlier than October 1, 2008, and then only to the 

extent the Secretary of Defense determines that NSPS provides greater 

personnel management flexibilities to the laboratories than those currently 

implemented.

DOD’s Employee Unions According to DOD, almost two-thirds of its more than 700,000 civilian 

employees are represented by 43 labor unions, including over 1,500 

separate bargaining units. Table 1 in appendix II lists current DOD labor 

unions, the estimated number of employees represented by each union, and 

which unions belong to the United Defense Workers Coalition.14 According 

to a DOD official, since 2000, defense civilian employee membership in 

DOD’s labor unions has remained about the same; however, the number of 

unions has dropped from about 60 unions to the current 43 unions, 

primarily the result of mergers and consolidation among the unions.

Practices and 

Implementation Steps for 

Mergers and 

Transformations

In our prior work, we identified key practices and lessons learned from 

major public and private sector organizational mergers, acquisitions, and 

transformations.15 This work was undertaken to help federal agencies 

implement successful cultural transformations in response to governance 

challenges. While no two mergers or transformation efforts are exactly 

alike and the "best" approach depends on a variety of factors specific to 

each context, there was general agreement on a number of key practices, 

which are as follows:

1. Ensure top leadership drives the transformation. Leadership must set 

the direction, pace, and tone and provide a clear, consistent rationale 

that brings everyone together behind a single mission.

14 The United Defense Workers Coalition currently represents 36 of the 43 DOD labor 

unions. The Coalition was formed in February 2004 to more effectively represent the 

interests of its members during NSPS design meetings with DOD officials. The remaining 

unions, for various reasons, decided to remain independent of the Coalition.

15GAO-03-293SP and GAO-03-669.
Page 12 GAO-05-730 Human Capital

2. Focus on a key set of principles and priorities at the outset of the 

transformation. A clear set of principles and priorities serves as a 

framework to help the organization create a new culture and drive 

employee behaviors.

3. Set implementation goals and a timeline to build momentum and 

show progress from day one. Goals and a timeline are essential 

because the transformation could take years to complete.

4. Dedicate an implementation team to manage the transformation 

process. A strong and stable team is important to ensure that the 

transformation receives the needed attention to be sustained and 

successful.

5. Establish a communication strategy to create shared expectations 

and report related progress. The strategy must reach out to employees, 

customers, and stakeholders and engage them in a two-way exchange.

6. Involve employees to obtain their ideas and gain their ownership for 

the transformation. Employee involvement strengthens the process 

and allows them to share their experiences and shape policies.

NSPS Design Process 

Evolved Into a Phased 

Approach

DOD’s current process to design NSPS is divided into four stages: 

(1) development of options for the personnel system, (2) assessment of the 

options and translation into recommended proposals, (3) issuance of 

proposed regulations, and (4) a statutory public comment period, a meet 

and confer period with employee representatives, and a congressional 

notification period. As discussed earlier, DOD’s initial process to design 

NSPS was unrealistic and inappropriate. However, after a 3-week 

reassessment, DOD adjusted its approach and attempted to create a more 

cautious and deliberate process that would involve all of the key 

stakeholders, including OPM. At this time, DOD adopted a management 

framework to guide the design of NSPS based on DOD’s acquisition 

management model and adopted an analytical framework to identify 

system requirements as well as a phased approach to implementing the 

new system, also based on the acquisition management model.16 Figure 1 

16The acquisition management model is contained in DOD Directive 5000.1 and DOD 

Instruction 5000.2, Operation of the Defense Acquisition System (May 12, 2003). 
Page 13 GAO-05-730 Human Capital

presents the four stages in DOD’s current process in terms of the key 

organizational elements, inputs, and outputs.

Figure 1: Key Elements of the NSPS Design Process

System

requirements

Outreach

results

Proposed

design options

Final regulations

NSPS working groups

• Compensation Architecture

• Performance Management

• Hiring, Assigning, and 

Workforce Shaping

• Employee Engagement

• Adverse Actions and Appeals

• Labor Relations

Source: GAO analysis based on DOD information.

• 30-day public 

comment period

• 30-day minimum meet 

and confer period

• 30-day congressional 

notification period

Analysis of other 

human capital 

approaches

Stage 1

NSPS Program

Executive Office

Senior Advisory Group

Overarching Integrated

Product Team

Senior Executive

Recommended

design options

Stage 2

Secretary of 

Defense

Director of

OPM

Proposed

regulations

Stage 3

Stage 4

Legend:

 Input

 Organizational element

 Output
Page 14 GAO-05-730 Human Capital

In the first stage, the NSPS PEO17 convened six multidisciplinary design 

teams—called working groups—that were functionally aligned to cover the 

following personnel program areas: (1) compensation (classification and 

pay banding); (2) performance management; (3) hiring, assignment, pay 

setting, and workforce shaping; (4) employee engagement; (5) adverse 

action and appeals; and (6) labor relations. The working groups were cochaired by DOD and OPM, and they were largely staffed from the defense 

components. The working groups reviewed and analyzed data from 

alternative federal personnel systems and laboratory and acquisition 

demonstration projects, research materials from the Department of 

Homeland Security’s personnel system design process, and private industry 

practices. According to DOD, the working groups also received input and 

participation from DOD human resources practitioners, attorneys, financial 

management experts, and equal employment opportunity specialists. The 

working groups also reviewed input gathered from DOD employee and 

employee representatives. The PEO was responsible for conducting 

outreach to employees and employee representatives, in conjunction with 

NSPS program managers in the DOD components;18 their efforts included 

106 focus groups, more than 50 town hall meetings worldwide, and 10 

meetings with DOD employee representatives. The working groups 

provided a broad range of options for the OIPT in September and October 

2004; they did not prioritize the design options.

In the second stage of the design process, OIPT assessed the design 

options, and then submitted them to the NSPS Senior Executive in 

November 2004. The Senior Executiveappointed by the Secretary of 

Defense to design and implement NSPS on his behalf—reviewed and 

approved the design options and presented them as proposed enabling 

regulations to submit to the Secretary of Defense and the Director of OPM 

for a decision. Throughout this period, the OIPT, PEO, and working group 

members continued to participate, both in drafting and reviewing the 

proposed regulations.

In the third stage, the Secretary of Defense and Director of OPM reviewed 

the proposals submitted by the NSPS Senior Executive. After finalizing the 

17The PEO is the policy and program management office responsible for conducting the 

design, planning development, implementation, and assessment of NSPS.

18Component program managers are dual-hatted under their parent components and the 

NSPS PEO.
Page 15 GAO-05-730 Human Capital

proposed regulations, the Secretary and Director jointly released them for 

public comment in the Federal Register on February 14, 2005. 

In the fourth stage, the NSPS proposed regulations were subjected to a 

statutory 30-day public comment period, after which DOD held a 30-day 

meet and confer period (which began on April 18, 2005), with employee 

representatives to discuss their views; the meetings were facilitated by the 

Federal Mediation and Conciliation Service. As allowed by statute, DOD 

extended the meet and confer process. Lastly, DOD is to engage in a 30-day 

congressional notification period. As called for in the authorizing 

legislation, the proposed regulations are subject to change based on 

consideration of formal comments received during the 30-day public 

comment period and the results of a 30-day meet and confer process with 

employee representatives. As provided for in the authorizing legislation, 

DOD can immediately implement those parts of the regulations upon which 

they have reached agreement with employee representatives. DOD can 

implement those parts of the proposed regulations not agreed to only after 

another 30 calendar days have elapsed after (1) notifying the Congress of 

the decision to proceed with implementation and (2) explaining why 

implementation is appropriate.

DOD’s NSPS Design 

Process Generally 

Reflects Practices of 

Successful 

Transformations, but 

Some Key Practices 

Are Lacking

DOD’s NSPS design process generally reflects four of six key practices we 

identified that have consistently been found at the center of successful 

transformations. The design process generally reflects the following four 

practices. First, DOD and OPM have developed a process to design the new 

personnel system that is supported by top leadership in both organizations. 

Second, from the outset, a set of guiding principles have guided the NSPS 

design process. Third, DOD has a dedicated team in place to design and 

implement NSPS and manage the transformation process, to include 

program managers from DOD components. Fourth, DOD has established a 

timeline, albeit ambitious, and implementation goals for implementing its 

new personnel system. The design process, however, does not fully reflect 

two other key practices. First, DOD developed and implemented a written 

communication strategy document, but it is not comprehensive. Second, 

while the NSPS design has involved employees through town hall meetings 

and other mechanisms, it has not included employee representatives on the 

working groups that drafted the design options for the new system.
Page 16 GAO-05-730 Human Capital

Top DOD and OPM 

Leadership Drives Human 

Capital Transformation

DOD and OPM have developed a process to design DOD’s new human 

capital resources management system that is supported by top leadership 

in both organizations. As previously discussed, DOD’s initial process to 

design NSPS was unrealistic and inappropriate; however, after a strategic 

reassessment, DOD adjusted its approach to reflect a more cautious, 

deliberative process that involved top DOD and OPM leadership. In our 

report on key practices for successful transformations, we noted that top 

leadership that is clearly and personally involved in transformations 

provides stability and an identifiable source for employees to rally around 

during tumultuous times.19 In addition, we noted that leadership should set 

the direction, pace, and tone for the transformation. In our prior reports 

and testimonies, we observed that top leadership must play a critical role in 

creating and sustaining high-performing organizations.20

Senior leaders from DOD and OPM are directly involved in the NSPS design 

process. For example, the Secretary of Defense tasked the Secretary of the 

Navy to be the NSPS Senior Executive overseeing the implementation of 

NSPS. Also, the Under Secretary of Defense for Personnel and Readiness 

and the NSPS Senior Executive provided an open letter to all DOD civilian 

employees stating that DOD is tasked to design a transformation system for 

the department’s civilian employees that supports its national security 

mission while treating workers fairly and protecting their rights. In 

addition, the Principal Deputy Under Secretary of Defense for Personnel 

and Readiness, the Assistant Secretaries for Manpower and Reserve Affairs 

from each military service, and the OPM Senior Advisor to the Director for 

the Department of Defense are members of an integrated executive 

management teamthe OIPTthat, among other things, provides overall 

policy and strategic advice on the implementation of NSPS. Similarly, 

senior-level executives from DOD and OPM are members of a group, 

known as the Senior Advisory Group, that provides advice on general NSPS 

conceptual, strategic, and implementation issues. Finally, senior leaders 

from DOD and the military components participated in town hall meetings 

19GAO-03-669.

20See GAO Managing for Results: Federal Managers’ Views Show Need for Ensuring Top 

Leadership Skills, GAO-01-127 (Washington, D.C.: Oct. 20, 2000); Management Reform: 

Using the Results Act and Quality Management to Improve Federal Performance,

GAO/T-GGD-99-151 (Washington, D.C.: July 29, 1999); and Management Reform: Elements 

of Successful Improvement Initiatives, GAO/T-GGD-00-26 (Washington, D.C.: Oct. 15, 

1999).
Page 17 GAO-05-730 Human Capital

at DOD installations worldwide to discuss the concept and design elements 

of NSPS.

Experience shows that successful major change management initiatives in 

large private and public sector organizations can often take at least 5 to 7 

years. This length of time and the frequent turnover of political leadership 

in the federal government have often made it difficult to obtain the 

sustained and inspired attention to make needed changes. The 

development of the position of Deputy Secretary of Defense for 

Management, who would act as DOD’s Chief Management Officer, is 

essential to elevate, integrate, and institutionalize responsibility for the 

success of DOD’s overall business transformation efforts, including its new 

personnel management system.

As DOD embarks on a large-scale change initiative, such as DOD’s new 

personnel management system, ensuring sustained and committed 

leadership is crucial in developing a vision, initiating organizational change, 

maintaining open communications, and creating an environment that is 

receptive to innovation. Without the clear and demonstrated commitment 

of agency top leadership, organizational cultures will not be transformed 

and new visions and ways of doing business will not take root.

Guiding Principles and Key 

Performance Parameters 

Steer Design Process

During the strategic reassessment of the NSPS design process, DOD and 

OPM senior leadership developed a set of guiding principles to direct 

efforts throughout all phases of NSPS development. We have reported that 

in bringing together the originating components, the new organization must 

have a clear set of principles and priorities that serve as a framework to 

help the organization create a new culture and drive employee behaviors.21

Principles are the core values of the new organization and can serve as an 

anchor that remain valid and enduring while organizations, personnel, 

programs, and processes may change. Focusing on these principles and 

priorities helps the organization maintain its drive towards achieving the 

goals of the new transformation.

According to DOD, its guiding principles translate and communicate the 

broad requirements and priorities outlined in the legislation into concise, 

21 GAO-03-669.
Page 18 GAO-05-730 Human Capital

understandable requirements that underscore the department’s purpose 

and intent in creating NSPS. The NSPS guiding principles are

• put mission first—support national security goals and strategic 

objectives,

• respect the individual—protect rights guaranteed by law,

• value talent, performance, leadership and commitment to public service,

• be flexible, understandable, credible, responsive, and executable,

• ensure accountability at all levels,

• balance personnel interoperability with unique mission requirements, 

and

• be competitive and cost effective.

Senior DOD and OPM leadership also approved a set of key performance 

parameters, which define the minimum requirements or attributes of NSPS. 

The key performance parameters are

• high-performing workforce and management: employees and 

supervisors are compensated and retained based on performance and 

contribution to mission,

• agile and responsive workforce management: workforce can be easily 

sized, shaped, and deployed to meet changing mission requirements,

• credible and trusted: system assures openness, clarity, accountability, 

and merit principles,

• fiscally sound: aggregate increases in civilian payroll, at the 

appropriations level, will conform to Office of Management and Budget 

fiscal guidance, and managers will have flexibility to manage to budget,

• supporting infrastructure: information technology support, and training 

and change management plans are available and funded, and

• schedule: NSPS will be operational and demonstrate success prior to 

November 2009.
Page 19 GAO-05-730 Human Capital

These principles and key performance parameters can serve as core values 

for human capital management at DODvalues that define the attributes 

that are intrinsically important to what the organization does and how it 

will do it. Furthermore, they represent the institutional beliefs and 

boundaries that are essential to building a new culture for the organization. 

Finally, they appropriately identify the need to support the mission and 

employees of the department, protect basic civil service principles, and 

hold employees accountable for performance.

Team Established to Manage 

the NSPS Design and 

Implementation Process

As previously discussed, DOD established a team to design and implement 

NSPS and manage the transformation process. Dedicating a strong and 

stable design and implementation team that will be responsible for the 

transformation’s day-to-day management is important to ensuring that it 

receives the focused, full-time attention needed to be sustained and 

successful. Specifically, the design and implementation team is important 

to ensuring that various change initiatives are sequenced and implemented 

in a coherent and integrated way. Because a transformation process is a 

massive undertaking, the implementation team must have a “cadre of 

champions” to ensure that changes are thoroughly implemented and 

sustained over time. Establishing networks can help the design and 

implementation team conduct the day-to-day activities of the merger or 

transformation and help ensure that efforts are coordinated and integrated. 

To be most effective, establishing clearly defined roles and responsibilities 

within this network assigns accountability for parts of the implementation 

process, helps reach agreement on work priorities, and builds a code of 

conduct that will help all teams to work effectively.

The Secretary of Defense appointed a NSPS Senior Executive to, among 

other things, design, develop, and establish NSPS. Under the Senior 

Executive’s authority, the PEO was established as the central policy and 

program office to conduct the design, planning and development, 

deployment, assessment, and full implementation of NSPS. Specifically, its 

responsibilities include designing the labor relations, appeals, and human 

resource/pay for performance systems; developing a communication 

strategy and training strategy; modifying personnel information 

technology; and drafting joint enabling regulations and internal DOD 

implementing regulations. As the central DOD-wide program office, the 

PEO provides direction and oversight of the components’ NSPS program 

managers who are dual-hatted under their parent component and the NSPS 

PEO. These program managers also serve as their components’ action 

officers and participate in the development of NSPS and plan and 
Page 20 GAO-05-730 Human Capital

implement the deployment of NSPS. Figure 2 shows the organization of the 

NSPS design and implementation team.
Page 21 GAO-05-730 Human Capital

Figure 2: NSPS Design and Implementation Team Organization

a

Includes the U.S. Navy and the U.S. Marine Corps.

b

 Represents defense agencies, DOD field activities, the Joint Chiefs of Staff, Office of the Inspector 

General, U.S. Court of Appeals for the Armed Services, and Office of the Secretary of Defense.
Page 22 GAO-05-730 Human Capital

Ambitious Timeline and 

Implementation Goals 

Established

DOD established an ambitious 18-month timeline and implementation goals 

for completing the design process and beginning the phased 

implementation of NSPS. We have reported that successful practices of 

mergers and transformations have noted that the establishment of a 

timeline with specific milestones allows stakeholders to track the 

organization’s progress towards its goals.22 Figure 3 shows the current 

timeline and implementation goals for designing and implementing NSPS.

22GAO-03-669.
Page 23 GAO-05-730 Human Capital

Figure 3: NSPS Timeline and Implementation Goals

Source: GAO analysis based on DOD information.

 2004

 April DOD conducts a strategic reassessment and adjusts its

 approach to system design.

 April 

 

 April NSPS Senior Executive briefs DOD labor unions on the NSPS

 Design and Implementation Plan.

 June - December DOD officials meet with employee representatives on NSPS

 design and implementation.

 July DOD officials start holding Town Hall meetings about NSPS.

 July NSPS focus groups meet to provide input on elements of NSPS.

 July - September All six NSPS working groups meet for an 8-week period to

 develop NSPS design options.

 NSPS officials brief Overarching Integrated Product Team on

 NSPS design options.

 December DOD selects components and units for initial roll out of NSPS

 performance management system (Spiral One).

 2005

 February 14 DOD and OPM issue proposed NSPS regulations in the Federal

 Register.

 February 14 30-day public comment period begins.

 April 18 30-day meet and confer period begins between DOD, OPM, and

 DOD employee representatives.

 To be determined 30-day congressional notification period begins.

 To be determined DOD and OPM develop and issue final NSPS regulations.

 To be determined DOD develops and issues NSPS implementing regulations and

 develops and conducts training for defense civilian employees,

 military and civilian supervisors, and managers.

 To be determined DOD modifies existing automated human resource information

 systems, including personnel and payroll transaction process

 systems departmentwide.

 Late fiscal year Roll out of NSPS labor relations system, including establishment 

 2005 of the National Security Labor Relations Board.

 Early fiscal year Initial roll out of NSPS performance management system

 2006 (Spiral One).

September - October

DOD appoints a NSPS Senior Executive and establishes

the NSPS Program Executive Office. NSPS Labor Relations

Working Group and Adverse Actions and Appeals Working

Group begin developing design options.
Page 24 GAO-05-730 Human Capital

Although DOD established a clear timeline with specific implementation 

goals, they have allotted about 6 months for completing the design process 

and beginning implementation of NSPS (as shown in the shaded area of 

figure 3). Specifically, the authorizing legislation provides for a meet and 

confer process for not less than 30 calendar days with the employee 

representatives in order to attempt to reach agreement. However, as 

allowed by statute, DOD extended the 30-day meet and confer period with 

employee representatives. After the meet and confer process is concluded, 

the Secretary of Defense must notify the Congress of DOD’s intent to 

implement any portions of the proposal where agreement has not been 

reached, but only after 30 calendar days have elapsed after notifying the 

Congress of the decision to implement those provisions. In addition, DOD 

and OPM must jointly develop and issue the final NSPS regulations, which 

must go through an interagency coordination process before they are 

published in the Federal Register. Also, DOD must develop and conduct indepth and varied training for its civilian employees, military and civilian 

supervisors, and managers. Moreover, DOD must modify its existing 

automated human resource information systems, including personnel and 

payroll transaction process systems departmentwide, before NSPS can 

become operational. Finally, DOD plans to roll out the NSPS labor relations 

system and establish the National Security Labor Relations Board before 

the initial roll out of the NSPS performance management system in early 

fiscal year 2006. The board must be staffed with both board members as 

well as about 100 professional staff, which will support the board.

A large-scale organizational change initiative, such as DOD’s new personnel 

management system, is a substantial commitment that will take years 

before it is completed, and therefore must be carefully and closely 

managed. As a result, it is essential to establish and track implementation 

goals and establish a timeline to pinpoint performance shortfalls and gaps 

and suggest midcourse corrections. While it is appropriate to develop and 

integrate personnel management systems within the department in a quick 

and seamless manner, moving too quickly or prematurely can significantly 

raise the risk of doing it wrong. Having an ambitious timeline is reasonable 

only insofar as it does not impact the quality of the human capital 

management system that is created. In recent hearings on the NSPS 

proposed regulations, we testified that DOD’s new personnel management 

system will have far-reaching implications for the management of the
Page 25 GAO-05-730 Human Capital

department and for civil service reform across the federal government.23

We further testified that NSPS could, if designed and implemented 

properly, serve as a model for governmentwide transformation. However, if 

not properly designed and implemented, NSPS could impede progress 

toward a more performance- and results-based system for the federal 

government as a whole.

Communication Strategy 

Not Comprehensive

DOD developed and implemented a written communication strategy 

document that provides a structured and planned approach to 

communicate timely and consistent information about NSPS, but this 

strategy is not comprehensive. It does not contain some elements that we 

have identified as important to successful communication during 

transformations. As a result, the written communication strategy document 

may not facilitate two-way communication between employees, employee 

representatives, and management, which is central to forming effective 

partnerships that are vital to the success of any organization. 

Specifically, the strategy does not identify all key internal stakeholders and 

their concerns. For example, the strategy acknowledges that employee 

representatives play an important role in the design and implementation of 

NSPS, but it does not identify them as a key stakeholder. Instead, DOD’s 

written communication strategy document characterizes union leadership 

as a “detractor,” in part due to their criticism of NSPS. Consequently, DOD 

identified the following four objectives as its most urgent communications 

priorities, which are to (1) demonstrate the rationale for and the benefits of 

NSPS, (2) express DOD’s commitment to ensuring that NSPS is applied 

fairly and equitably throughout the organization, (3) demonstrate openness 

and transparency in the design and process of converting to NSPS, and 

(4) mitigate and counter any potential criticism of NSPS from such 

detractors as unions and their support groups. Experience shows that 

failure to adequately consider a wide variety of people and cultural issues 

can lead to unsuccessful transformations. 

23GAO, Human Capital: Preliminary Observations on Proposed Regulations for DOD’s 

National Security Personnel System, GAO-05-559T (Washington, D.C.: Apr. 14, 2005); 

Human Capital: Preliminary Observations on Proposed Department of Defense National 

Security Personnel System Regulations, GAO-05-517T (Washington, D.C.: Apr. 12, 2005);

and Human Capital: Preliminary Observations on Proposed DOD National Security 

Personnel System Regulations, GAO-05-432T (Washington, D.C.: Mar. 15, 2005).
Page 26 GAO-05-730 Human Capital

Furthermore, although the written communication strategy document 

identified key messages for those internal and external stakeholders that 

are identified, it does not tailor these messages to specific stakeholder 

groups. For example, the strategy does not tailor key messages to such 

groups of employees as human resource personnel, DOD executives and 

flag officers, supervisors, and managers, even though these employees may 

have divergent interests and information needs. Tailoring information helps 

employees to feel that their concerns are specifically addressed. We have 

reported that organizations undergoing a transformation should develop a 

comprehensive communications strategy that reaches out to employees, 

customers, and stakeholders and seeks to genuinely engage them in the 

transformation process and facilitate a two-way honest exchange with and 

allow for feedback from employees, customers, and stakeholders.24

NSPS Design Process has 

Involved Employees

While the design process has involved employees through many 

mechanisms, including focus groups, town hall meetings, a NSPS Web site 

for employee comments, and meetings with employee representatives, it 

has not included employee representatives on the working groups that 

drafted the design options.25 The composition of the team is important 

because it helps employees see that they are being represented and that 

their views are being considered in the decision-making process. A 

successful transformation must provide for meaningful involvement by 

employees and their representatives to, among other things, gain their 

input into and understanding of the changes that are occurring in the 

organization. Employee involvement strengthens the transformation 

process by including frontline perspectives and experiences. Further, 

employee involvement helps increase employee’s understanding and 

acceptance of organizational goals and objectives, and gain ownership for 

new policies and procedures. Involving employees in planning helps to 

develop agency goals and objectives that incorporate insights about 

operations from a front-line perspective. It can also serve to increase 

employees’ understanding and acceptance of organizational goals and 

improve motivation and morale.

24GAO-03-669.

25It should be noted that 10 federal labor unions have filed suit alleging that DOD failed to 

abide by the statutory requirements to include employee representatives in the development 

of DOD’s new labor relations system authorized as part of NSPS. See American Federation 

of Government Employees, AFL-CIO et al v. Rumsfeld et al, No. 1:05cv00367 (D.D.C. filed 

Feb. 23, 2005).
Page 27 GAO-05-730 Human Capital

The PEO sponsored a number of focus group sessions and town hall 

meetings at various sites across DOD and around the world to provide 

employees and managers an opportunity to participate in the development 

of NSPS. During a 3-week period beginning in July 2004, over 100 focus 

groups were held throughout DOD, including overseas locations. The 

purpose of the focus groups was to elicit perceptions and concerns about 

current personnel policies and practices as well as new ideas from the DOD 

workforce to inform the NSPS design process. Separate focus groups were 

held for employees, civilian and military supervisors, and managers and 

practitioners from the personnel, legal, and equal employment opportunity 

communities. According to DOD officials, bargaining unit employees and 

employee representatives were invited to participate. DOD officials stated 

that over 10,000 comments, ideas, and suggestions were received during 

the focus group sessions and were summarized and provided to NSPS 

working groups for use in developing options for the labor relations, 

appeals, adverse actions, and personnel design elements of NSPS.

In addition, town hall meetings were held and, according to DOD, are still 

being conducted at DOD facilities around the world. According to DOD 

officials, these town hall meetings have provided an opportunity to 

communicate with the workforce, provide the status of the design and 

development of NSPS, and solicit thoughts and ideas. The format for town 

hall meetings included an introductory presentation by a senior leader 

followed by a question and answer session where any employee in the 

audience was free to ask a question or make a comment. To facilitate the 

widest possible dissemination, some of the town hall meetings were 

broadcast live, as well as videotaped and rebroadcast on military television 

channels and Web sites.

DOD’s NSPS Web site was available for DOD employees as well as 

interested parties to view and comment on the proposed regulations as 

well as for the most recent information and announcements regarding 

NSPS. After the proposed NSPS regulations were published in the Federal 

Register, there was a 30-day public comment period, providing all 

interested parties the opportunity to submit comments and 

recommendations on the content of the proposal. The proposed 

regulations were published on February 14, 2005, and the 30-day comment 

period ended on March 16, 2005. During this time period, according to 

DOD, it received more than 58,000 comments.

Prior to the publication of the proposed NSPS regulations, DOD and OPM 

conducted 10 joint meetings with officials of DOD’s 43 labor unions to 
Page 28 GAO-05-730 Human Capital

discuss NSPS design elements. According to DOD officials, these meetings 

involved as many as 80 union leaders at any one time, addressed a variety 

of topics, including (1) the reasons change is needed and the department’s 

interests; (2) the results of departmentwide focus group sessions held with 

a broad cross-section of DOD employees; (3) the proposed NSPS 

implementation schedule; (4) employee communications; and (5) proposed 

design options in the areas of labor relations and collective bargaining, 

adverse actions and appeals, and pay and performance management. 

According to DOD officials, these meetings provided the opportunity to 

discuss the design elements, proposals under consideration for NSPS, and 

solicit employee representative feedback.

According to DOD, the focus group sessions and town hall meetings, as 

well as the working groups and union meetings, assured that DOD 

employees, managers, supervisors, employee representatives, and other 

stakeholders were involved in and given ample opportunity to provide 

input into the design and implementation of NSPS. 

Opportunities for employee involvement were limited between the 

conclusion of the town hall meetings and focus groups in July 2004 and the 

publishing of the proposed NSPS regulations in February 2005; the primary 

means for employees to provide feedback during this time was through the 

NSPS Web site.

DOD Faces Multiple 

Challenges in 

Implementing NSPS

As DOD implements its new personnel management system, it will face 

multiple implementation challenges in both the early and later stages of 

implementation. At recent hearings on the proposed NSPS regulations, we 

highlighted multiple challenges: (1) establishing an overall 

communications strategy, (2) providing adequate resources for the new 

system, (3) involving employees and other stakeholders in implementing 

the system, (4) ensuring sustained and committed leadership, and 

(5) evaluating the new personnel management system after it has been 

implemented.26

Early Implementation 

Challenges

• Establishing an overall communications strategy. A significant 

challenge for DOD is to ensure an effective and ongoing two-way 

26GAO-05-432T, GAO-05-517T, and GAO-05-559T.
Page 29 GAO-05-730 Human Capital

communications strategy, given its size, geographically and culturally 

diverse audiences, and different command structures across DOD 

organizations. We have reported that a communications strategy that 

creates shared expectations about, and reports related progress on, the 

implementation of the new system is a key practice of a change 

management initiative. The communications strategy must include the 

active and visible involvement of a number of key players, including the 

Secretary of Defense, and a variety of communication means and 

mediums for successful implementation of the system. DOD 

acknowledges that a comprehensive outreach and communications 

strategy is essential for designing and implementing its new personnel 

management system, but the proposed regulations do not identify a 

process for continuing involvement of employees in the planning, 

development, and implementation of NSPS.

• Providing adequate resources for implementing the new system. 

Experience has shown that additional resources are necessary to ensure 

sufficient planning, implementation, training, and evaluation for human 

capital reform. According to DOD, the implementation of NSPS will 

result in costs for, among other things, developing and delivering 

training, modifying automated personnel information systems, and 

starting up and sustaining the National Security Labor Relations Board. 

Major cost drivers in implementing pay-for-performance systems are the 

direct costs associated with salaries and training. DOD estimates that 

the overall cost associated with implementing NSPS will be 

approximately $158 million through fiscal year 2008. However, it has not 

completed an implementation plan for NSPS, including an information 

technology plan and a training plan; thus, the full extent of the resources 

needed to implement NSPS may not be well understood at this time.

• Involving employees and other stakeholders in implementing the 

system. DOD faces a significant challenge in involvingand continuing 

to involveits employees, employee representatives, and other 

stakeholders in implementing NSPS. DOD’s proposed NSPS regulations, 

while providing for continuing collaboration with employee 

representatives, do not identify a process for the continuing 

involvement of employees and other stakeholders in the planning, 

development, and implementation of NSPS. The active involvement of 

all stakeholders will be critical to the success of NSPS. The involvement 

of employees and their representatives both directly and indirectly is 

crucial to the success of new initiatives, including implementing a payfor-performance system. High-performing organizations have found that 
Page 30 GAO-05-730 Human Capital

actively involving employees and stakeholders, such as unions or other 

employee associations, when developing results-oriented performance 

management systems helps improve employees’ confidence and belief 

in the fairness of the system and increases their understanding and 

ownership of organizational goals and objectives. This involvement 

must be early, active, and continuing if employees are to gain a sense of 

understanding and ownership of the changes that are being made.

Later Implementation 

Challenges

• Ensuring sustained and committed leadership. As DOD implements 

this massive human capital reform, its challenge will be to elevate, 

integrate, and institutionalize leadership responsibility for NSPS to 

ensure its success. DOD may face a future leadership challenge when 

the NSPS Senior Executive and the PEO transition out of existence once 

NSPS is fully implemented. According to a PEO official, at that time, 

ongoing implementation responsibility for NSPS would come under the 

Civilian Personnel Management Service, which is part of the Office of 

the Under Secretary of Defense for Personnel and Readiness. In recent 

testimony on the transformation of DOD business operations, we stated 

that as DOD embarks on large-scale business transformation efforts, 

such as NSPS, the complexity and long-term nature of these efforts 

requires the development of an executive position capable of providing 

strong and sustained change management leadership across the 

department—and over a number of years and various administrations. 27

One way to ensure such leadership would be to create by legislation a 

full-time executive-level II position for a chief management official, who 

would serve as the Deputy Secretary of Defense for Management. This 

position would elevate, integrate, and institutionalize the high-level 

attention essential for ensuring that a strategic business transformation 

plan—as well as the business policies, procedures, systems, and 

processes that are necessary for successfully implementing and 

sustaining overall business transformation efforts, like NSPS, within 

DOD—are implemented and sustained. In previous testimony on DOD’s 

business transformation efforts, we identified the lack of clear and 

sustained leadership for overall business transformations as one of the 

underlying causes that has impeded prior DOD reform efforts.28

27GAO, Defense Management: Key Elements Needed to Successfully Transform DOD 

Business Operations, GAO-05-629T (Washington, D.C.: Apr. 28, 2005).

28GAO-05-140T.
Page 31 GAO-05-730 Human Capital

• Evaluating the new personnel management system. Evaluating the 

impact of NSPS will be an ongoing challenge for DOD. This is especially 

important because NSPS would give managers more authority and 

responsibility for managing the new personnel system. High-performing 

organizations continually review and revise their human capital 

management systems based on data-driven lessons learned and 

changing needs in the work environment. Collecting and analyzing data 

will be the fundamental building block for measuring the effectiveness 

of these approaches in support of the mission and goals of the 

department.

According to DOD, the department is planning to establish procedures 

to evaluate the implementation of its new personnel management 

system. During testimony on the proposed NSPS regulations, we stated 

that DOD should consider conducting evaluations that are broadly 

modeled on demonstration projects. Under the demonstration project 

authority, agencies must evaluate and periodically report on results, 

implementation of the demonstration project, costs and benefits, 

impacts on veterans and other equal employment opportunity groups, 

adherence to merit system principles, and the extent to which the 

lessons learned from the project can be applied governmentwide. We 

further testified that a set of balanced measures addressing a range of 

results, and customer, employee, and external partner issues may also 

prove beneficial. An evaluation such as this would facilitate 

congressional oversight; allow for any midcourse corrections; assist 

DOD in benchmarking its progress with other efforts; and provide for 

documenting best practices and lessons learned with employees, 

stakeholders, other federal agencies, and the public.

Conclusions DOD’s efforts to design and implement a new personnel management 

system represent a huge undertaking. However, if not properly designed 

and implemented, the new system could severely impede DOD’s progress 

toward a more performance- and results-based system that it is striving to 

achieve. Although DOD’s process to design its new personnel management 

system represents a phased, deliberative process, it does not fully reflect 

some key practices of successful transformations. Because DOD has not 

fully addressed all of these practices, it does not have a comprehensive 

written communication strategy document that effectively addresses 

employee concerns and their information needs, and facilitates two-way 

communication between employees, employee representatives, and 

management. Without a comprehensive written communication strategy 
Page 32 GAO-05-730 Human Capital

document, DOD may be hampered in achieving employee buy-in, which 

could lead to an unsuccessful implementation of the system. 

In addition, evaluating the impact of NSPS will be an ongoing challenge for 

DOD. Although DOD has plans to establish procedures to evaluate NSPS, it 

is critical that these procedures be adequate to fully measure the 

effectiveness of the program. Specifically, adequately designed evaluation 

procedures include results-oriented performance measures and reporting 

requirements that facilitate DOD’s ability to effectively evaluate and report 

on NSPS’s results. Without procedures that include outcome measures and 

reporting requirements, DOD will lack the visibility and oversight needed 

to benchmark progress, make system improvements, and provide the 

Congress with the assessments needed to determine whether NSPS is truly 

the model for governmentwide transformation in human capital 

management. 

Recommendations for 

Executive Action

To improve the comprehensiveness of the NSPS communication strategy, 

we recommend that the Secretary of Defense direct the NSPS Senior 

Executive and NSPS Program Executive Office to take the following two 

actions:

• Identify all internal stakeholders and their concerns. 

• Tailor and customize key messages to be delivered to groups of 

employees to meet their divergent interests and information needs.

To evaluate the impact of DOD’s new personnel management system, we 

recommend that the Secretary of Defense direct the NSPS Senior 

Executive and NSPS Program Executive Office to take the following 

action:

• Develop procedures for evaluating NSPS that contain results-oriented 

performance measures and reporting requirements. These evaluation 

procedures could be broadly modeled on the evaluation requirements of 

the OPM demonstration projects.

Agency Comments and 

Our Evaluation

DOD provided written comments on a draft of this report. The department 

did not concur with our recommendation to identify all key internal 

stakeholders and their concerns. The department partially concurred with 
Page 33 GAO-05-730 Human Capital

our recommendation to tailor and customize key messages to be delivered 

to groups of employees to meet their divergent interests and information 

needs. Also, the department partially concurred with our recommendation 

to develop procedures for evaluating NSPS that contain results-oriented 

performance measures and reporting requirements. 

DOD did not concur with our recommendation that the department identify 

all key internal stakeholders and their concerns. The department stated 

that, among other things, it adopted a broad-based, event-driven approach 

to the design and implementation of NSPS that included a multifaceted 

communications outreach strategy to inform and involve key stakeholders, 

and that it took great care to ensure that materials and messages addressed 

stakeholders’ concerns, both known and anticipated. However, our review 

of DOD’s written communication strategy document showed that not all 

key internal stakeholders and their concerns were identified. For example, 

the written communication strategy document does not identify employee 

representatives as a key stakeholder but, instead, characterizes union 

leadership as “NSPS’ biggest detractor.” Since the development and 

implementation of the written communication strategy document, DOD 

notes that specific plans were developed to identify key internal and 

external stakeholders and provided key messages and communications 

products to inform those groups. DOD provided us with these plans after 

we provided the department with our draft report for comment. Our review 

of these plans shows that they are not comprehensive. For example, the 

plans for the most part do not identify employee representatives as a key 

stakeholder or identify their concerns. Consequently, we continue to 

believe that our recommendation has merit and should be implemented.

DOD partially concurred with our recommendation that the department 

tailor and customize key messages to be delivered to groups of employees 

to meet their divergent interest and information needs. The department 

stated that it believes that it has been successful so far in developing, 

customizing, and delivering key messages to employees and provided us 

with several examples to illustrate its efforts. Although DOD’s written 

communication strategy document contained key messages for some 

employee groups, the messages were general in content and not tailored to 

specific employee groups. DOD acknowledges that each stakeholder group 

has a unique focus and recently released NSPS brochures tailored to such 

groups of employees as human resource personnel, senior leaders, 

supervisors and managers, and employees. DOD provided us with these 

brochures after we provided the department with our draft report for 

comment. Our review of these brochures shows that they do in fact tailor 
Page 34 GAO-05-730 Human Capital

and customize key messages for some, but not all, employee groups. 

Furthermore, we believe that DOD’s written communication strategy 

document should serve as the single, comprehensive source of DOD’s key 

messages, which are tailored to and customized for groups of employees. 

Consequently, we continue to believe that this recommendation has merit 

and should be implemented.

DOD partially concurred with our recommendation to develop procedures 

for evaluating NSPS that contain results-oriented performance measures 

and reporting requirements that could be broadly modeled on the 

evaluation requirements of the OPM demonstration projects. The 

department stated that it has begun developing an evaluation plan and will 

ensure that the plan contains results-oriented performance measures and 

reporting mechanisms. If the department follows through with this effort, 

we believe that it will be responsive to our recommendation. 

DOD’s comments are reprinted in appendix III. DOD also provided 

technical comments, which we have incorporated in the final report where 

appropriate.

We are sending copies of this report to the Chairman and Ranking Member, 

Senate Committee on Armed Services; the Chairman and Ranking Member, 

Senate Committee on Homeland Security and Governmental Affairs; the 

Chairman and Ranking Member, Subcommittee on Oversight of 

Government Management, the Federal Workforce, and the District of 

Columbia, Senate Committee on Homeland Security and Governmental 

Affairs; the Chairman and Ranking Member, House Committee on Armed 

Services; the Chairman and Ranking Member, Subcommittee on the 

Federal Workforce and Agency Organization, House Committee on 

Government Reform; and other interested congressional parties. We also 

are sending copies to the Secretary of Defense and Director of the Office of 

Personnel Management. We will make copies available to other interested 

parties upon request. This report also will be made available at no charge 

on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

at (202) 512-5559 or by e-mail at stewartd@gao.gov. For further information 

on governmentwide human capital issues, please contact Eileen R. 

Larence, Director, Strategic Issues, at (202) 512-6512 or larencee@gao.gov. 

Contact points for our Offices of Congressional Relations and Public 
Page 35 GAO-05-730 Human Capital

Affairs may be found on the last page of the report. GAO staff who made 

major contributions to this report are listed in appendix IV.

Derek B. Stewart, Director

Defense Capabilities and Management
Page 36 GAO-05-730 Human Capital

List of Congressional Committees

The Honorable John W. Warner

Chairman

The Honorable Carl Levin

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Susan M. Collins

Chairman

The Honorable Joseph I. Lieberman

Ranking Member

Committee on Homeland Security

and Governmental Affairs

United States Senate

The Honorable George V. Voinovich

Chairman

The Honorable Daniel K. Akaka

Ranking Member

Subcommittee on Oversight of Government Management, 

the Federal Workforce, and the District of Columbia

Committee on Homeland Security 

and Governmental Affairs

United States Senate

The Honorable Duncan Hunter

Chairman

The Honorable Ike Skelton

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Jon C. Porter

Chairman

The Honorable Danny K. Davis

Ranking Member

Subcommittee on the Federal Workforce

and Agency Organization

Committee on Government Reform

House of Representatives
Page 37 GAO-05-730 Human Capital

Appendix I

Scope and Methodology ApApenednxidexiIs

In conducting our review of the Department of Defense’s (DOD) National 

Security Personnel System (NSPS), we met with officials in key offices 

within DOD and the Office of Personnel Management (OPM) that have 

responsibility for designing and implementing DOD’s new performance 

management system. We also met with DOD employee representatives, 

whose members are affected by the transformation. We conducted our 

work in Washington, D.C., at DOD, including the NSPS Program Executive 

Office (PEO) and NSPS Program Management Offices in the Army, the 

Navy, the Marine Corps, the Air Force, and Washington Headquarters 

Service. We also met with members of the NSPS Overarching Integrated 

Product Team (OIPT) and Senior Advisory Group.

At OPM, we met with the Senior Advisor to the Director for the Department 

of Defense and Senior Policy Advisor and Chief Human Capital Officer in 

the Office of the Director. We also met with key officials in OPM’s Office of 

Congressional Relations, Division for Strategic Human Resources Policy, 

Homeland Security and Intelligence Group in the Division for Human 

Capital Leadership and Merit System Accountability, and the Office of the 

Chief Financial Officer. In addition, we met with the OPM co-chairs of each 

of the DOD working groups that designed NSPS.

We met with representatives from the United Defense Workers Coalition, 

which represents 36 DOD employee unions, as well as employee 

representatives for the Fraternal Order of Police and National Association 

of Independent Labor, which are not members of the Coalition. We 

contacted the other non-Coalition unions, but their representatives told us 

that they had not been actively involved in the NSPS design process and, 

therefore, declined our offer to meet with them. Finally, we met in 

Washington, D.C., with key officials in other federal agencies that are 

statutorily involved in the NSPS design process: Federal Labor Relations 

Authority, Federal Mediation and Conciliation Service, and U.S. Merit 

Systems Protection Board.

To describe DOD’s design process, we examined the authorizing legislation 

and other applicable laws and regulations and collected and analyzed 

documentary and testimonial information from key sources. We met with 

the Director and Deputy Director of the NSPS PEO and the DOD and OPM 

co-chairs of all six working groups; members of the OIPT, including the 

OPM co-chair, and Senior Advisory Group; DOD employee representatives; 

and experts in federal labor relations and federal adverse actions and 

personnel appeals systems. We also examined NSPS policy guidance, 

directives, draft regulations, instructions, manuals, and memorandums 
Appendix I

Scope and Methodology

Page 38 GAO-05-730 Human Capital

related to the design process and NSPS charters outlining the roles and 

responsibilities of the OIPT and PEO. 

To evaluate the extent to which DOD’s process reflects elements of 

successful transformations, we reviewed prior GAO reports, testimonies, 

and forums on mergers and organizational transformations to identify 

assessment criteria, and we applied those criteria to the descriptive 

information collected for the first objective. Although there are a total of 

nine key practices of successful transformations, our evaluation focused 

on six key practices: (1) ensure top leadership drives the transformation, 

(2) focus on a key set of principles and priorities at the outset of the 

transformation, (3) set implementation goals and a timeline to build 

momentum and show progress from day one, (4) dedicate an 

implementation team to manage the transformation process, (5) establish a 

communication strategy to create shared expectations and report related 

progress, and (6) involve employees to obtain their ideas and gain their 

ownership for the transformation.

We did not evaluate the key practice “establishes a coherent mission and 

integrated strategic goals to guide the transformation” because we have 

previously reported on the department’s strategic planning efforts for 

civilian personnel and assessed whether DOD and selected defense 

components’ goals and objectives contained in strategic plans for civilian 

personnel were aligned with overarching missions of the organizations. We 

did not apply two other key practices, “uses a performance management 

system to define responsibility and assure accountability for change” and 

“builds a world-class organization” because it would be premature to apply 

them to the NSPS design process given that DOD has considerable work 

ahead to design and implement NSPS and assess the overall system.

To identify the most significant challenges DOD faced in developing NSPS, 

we interviewed officials from DOD, OPM, and other federal agencies as 

well as representatives from DOD unions. We also examined related 

documentation, previously identified, and reviewed prior GAO reports, 

testimonies, and observations related to these challenges.

Data on DOD labor unions and the number of employees associated with 

each union were compiled by DOD from three sources: (1) the OPM book, 

entitled Union Recognition in the Federal Government, (2) data from the 

Defense Civilian Personnel Data System, and (3) a DOD survey of the 

military departments and defense agencies. The data are current as of June 

2005. To assess the reliability of these data, we interviewed the DOD 
Appendix I

Scope and Methodology

Page 39 GAO-05-730 Human Capital

official responsible for compiling the data and performed some basic 

reasonableness checks of the data against other sources of information 

(e.g., previous DOD reports that identified DOD labor unions in past years 

and information directly from unions). However, we were unable to 

determine the reliability of the precise numbers of employees represented 

by each union. Because of this, and since some of the data are not current, 

these data are only sufficiently reliable for use as estimates rather than 

precise numbers of union employees. We use these data in appendix II to 

identify current DOD labor unions, an estimate of the number of employees 

represented by each union, and which unions belong to the United Defense 

Workers Coalition.

We conducted our review from October 2004 through June 2005 in 

accordance with generally accepted government auditing standards. We 

include a comprehensive list of related GAO products on DOD’s civilian 

personnel management at the end of this report.
Page 40 GAO-05-730 Human Capital

Appendix II

DOD Labor Unions, Estimated Number of 

Employees Represented, and Membership in 

the United Defense Workers Coalition ApendxiI

Table 1 lists current DOD labor unions, the estimated number of employees 

represented by each union, and which unions belong to the United Defense 

Workers Coalition.

Table 1: DOD Labor Unions, Estimated Number of Employees Represented, and Membership in the United Defense Workers 

Coalition (as of June 2005).

DOD labor unionsa

Estimated number of

employees represented

Members of the United Defense Workers Coalition

1. American Federation of Government Employees (AFGE) 260,521

2. American Federation of Teachers (AFT) 734

3. American Federation of State, County and Municipal Employees (AFSCME) b 367

4. American Nurses Association (ANA) 18

5. Antilles Consolidated Education Association (ACEA) 463

6. Association of Civilian Technicians (ACT) 22,173

7. Communications Workers of America (CWA)c 104

8. Fairchild Federal Employees Union (FFEU) 646

9. Federal Education Association, Inc. (FEA) 7,240

10. Hawaii Council of Defense Commissary Unions (HCDCU) 454

11. International Association of Firefighters (IAFF) 39

12. International Association of Machinists and Aerospace Workers (IAMAW) 16,875

13. International Association of Tool Craftsman (IATC) 17

14. International Brotherhood of Boilermakers (IBB)d Information not available

15. International Brotherhood of Electrical Workers (IBEW) 3,066

16. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (IBT) 2,960

17 International Federation of Professional and Technical Engineers (IFPTE) 13,131

18. International Guard Union of America (IGUA) 34

19. International Organization of Masters, Mates and Pilots (IOMMP) 433

20. International Union of Operating Engineers (IUOE) 99

21. International Union of Painters and Allied Trades (BPAT) 33

22. Laborers International Union of North America (LIUNA) 7,381

23. Marine Engineers Beneficial Association (MEBA) 611

24. Metal Trades Department/Council (MTD/MTC) 18,260

25. National Air Traffic Controllers Association (NATCA) 36

26. National Association of Aeronautical Examiners (NAAE) 242

27. National Association of Government Employees (NAGE) 22,614

28. National Association of Government Inspectors (NAGI) 161
Appendix II

DOD Labor Unions, Estimated Number of 

Employees Represented, and Membership in 

the United Defense Workers Coalition

Page 41 GAO-05-730 Human Capital

Source: DOD.

a

Data on DOD labor unions and the number of employees associated with each union was compiled by 

DOD from the Office of Personnel Management (OPM) book entitled Union Recognition in the Federal 

Government, data from the Defense Civilian Personnel Data System, and a DOD survey of the military 

departments and defense agencies. The data are current as of June 2005 and the numbers of 

employees should be considered as estimates rather than precise numbers.

b

The American Federation of State, County, and Municipal Employees union represents two DOD 

unions. The Federation of Physicians & Dentists/Alliance of Health Care & Professional Employees 

represents 269 employees, while the United Nurses Association of California (UNAC) and Balboa RN 

Association (BNA) represent 98 employees.

c

This includes the United Telegraph Workers Union (UTWU), which merged with the Communications 

Workers of America in 1987.

d

The International Brotherhood of Boilermakers (IBB) is affiliated with the Metal Trades Department. 

IBB representatives attended the meetings between the United Defense Workers Coalition and 

representatives from DOD and OPM.

Members of the United Defense Workers Coalition (continued)

29. National Federation of Federal Employees (NFFE) 8,449

30. Professional Airways Systems Specialists (PASS) 43

31. Retail, Wholesale and Department Store Union (RWDSU) 857

32. Seafarers International Union of North America (SIUNA) 3,675

33. Service Employees International Union (SEIU) 3,875

34. Sport Air Traffic Controllers (SPORT) 16

35. United Association of Plumbing and Pipe Fitting Industry of the United States and Canada (UA) 83

36. United Power Trades Organization (UPTO) 490

Non-Coalition members

37. Fraternal Order of Police (FOP) 449

38. Graphic Communications International Union (GCIU) 232

39. Hotel Employees and Restaurant Employees International Union (HERE) 781

40. International Chemical Worker’s Union (ICWU) 20

41. National Association of Independent Labor (NAIL) 2,500

42. National Conference of Firemen and Oilers (SEIU) (Formerly International Brotherhood of Firemen 

and Oilers (IBFO) 

47

43. United Food Commercial Workers Union (UFCW) 24,376

Total 424,605

(Continued From Previous Page)

DOD labor unionsa

Estimated number of

employees represented
Page 42 GAO-05-730 Human Capital

Appendix III

Comments from the Department of Defense ApendxiI
Appendix III

Comments from the Department of Defense

Page 43 GAO-05-730 Human Capital
Appendix III

Comments from the Department of Defense

Page 44 GAO-05-730 Human Capital
Appendix III

Comments from the Department of Defense

Page 45 GAO-05-730 Human Capital
Appendix III

Comments from the Department of Defense

Page 46 GAO-05-730 Human Capital
Page 47 GAO-05-730 Human Capital

Appendix IV

GAO Contact and Staff Acknowledgments ApendxiIV

GAO Contact Derek B. Stewart, (202) 512-5559

Acknowledgments In addition to the contact named above, Sandra F. Bell, Renee S. Brown, 

Rebecca L. Galek, Barbara L. Joyce, Julia C. Matta, Mark A. Pross, William 

J. Rigazio, John S. Townes, and Susan K. Woodward made key 

contributions to this report.
Page 48 GAO-05-730 Human Capital

Related GAO Products

Questions for the Record Related to the Department of Defense’s National 

Security Personnel System. GAO-05-771R. Washington, D.C.: June 14, 2005.

Questions for the Record Regarding the Department of Defense’s National 

Security Personnel System. GAO-05-770R. Washington, D.C.: May 31, 2005.

Post-hearing Questions Related to the Department of Defense’s National 

Security Personnel System. GAO-05-641R. Washington, D.C.: April 29, 2005.

Defense Management: Key Elements Needed to Successfully Transform 

DOD Business Operations. GAO-05-629T. Washington, D.C.: April 28, 2005.

Human Capital: Preliminary Observations on Proposed Regulations for 

DOD’s National Security Personnel System. GAO-05-559T. Washington, 

D.C.: April 14, 2005.

Human Capital: Preliminary Observations on Proposed Department of 

Defense National Security Personnel System Regulations. GAO-05-517T. 

Washington, D.C.: April 12, 2005.

Human Capital: Preliminary Observations on Proposed DOD National 

Security Personnel System Regulations. GAO-05-432T. Washington, D.C.: 

March 15, 2005.

Department of Defense: Further Actions Are Needed to Effectively 

Address Business Management Problems and Overcome Key Business 

Transformation Challenges. GAO-05-140T. Washington, D.C.: November 

18, 2004.

DOD Civilian Personnel: Comprehensive Strategic Workforce Plans 

Needed. GAO-04-753. Washington, D.C.: June 30, 2004.

Results-Oriented Cultures: Implementation Steps to Assist Mergers and 

Organizational Transformations. GAO-03-669. Washington, D.C.: July 2, 

2003.

Human Capital: Building on DOD’s Reform Efforts to Foster 

Governmentwide Improvements. GAO-03-851T. Washington, D.C.: June 4, 

2003.
Related GAO Products

Page 49 GAO-05-730 Human Capital

Human Capital: DOD’s Civilian Personnel Strategic Management and 

the Proposed National Security Personnel System. GAO-03-493T. 

Washington, D.C.: May 12, 2003.

Defense Transformation: DOD’s Proposed Civilian Personnel System and 

Governmentwide Human Capital Reform. GAO-03-741T. Washington, 

D.C.: May 1, 2003.

Defense Transformation: Preliminary Observations on DOD’s Proposed 

Civilian Personnel Reforms. GAO-03-717T. Washington, D.C.: April 29, 

2003.

DOD Personnel: DOD Actions Needed to Strengthen Civilian Human 

Capital Strategic Planning and Integration with Military Personnel and 

Sourcing Decisions. GAO-03-475. Washington, D.C.: March 28, 2003.

(350575)
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