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RETENTION, SECURITY CLEARANCES,

MORALE AND OTHER HUMAN CAPITAL

CHALLENGES FACING DHS

HEARING

BEFORE THE

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MAY 18, 2006

Serial No. 109–78

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html
COMMITTEE ON HOMELAND SECURITY

PETER T. KING, New York, Chairman 

DON YOUNG, Alaska 

LAMAR S. SMITH, Texas 

CURT WELDON, Pennsylvania 

CHRISTOPHER SHAYS, Connecticut 

JOHN LINDER, Georgia 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

JIM GIBBONS, Nevada 

ROB SIMMONS, Connecticut 

MIKE ROGERS, Alabama 

STEVAN PEARCE, New Mexico 

KATHERINE HARRIS, Florida 

BOBBY JINDAL, Louisiana 

DAVE G. REICHERT, Washington 

MICHAEL MCCAUL, Texas 

CHARLIE DENT, Pennsylvania 

GINNY BROWN-WAITE, Florida 

BENNIE G. THOMPSON, Mississippi 

LORETTA SANCHEZ, California 

EDWARD J. MARKEY, Massachusetts 

NORMAN D. DICKS, Washington 

JANE HARMAN, California 

PETER A. DEFAZIO, Oregon 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

ZOE LOFGREN, California 

SHEILA JACKSON-LEE, Texas 

BILL PASCRELL, JR., New Jersey 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

KENDRICK B. MEEK, Florida 

SUBCOMMITTEE ON MANAGEMENT, INTEGRATION, AND OVERSIGHT

MIKE ROGERS, Alabama, Chairman 

JOHN LINDER, Georgia 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

KATHERINE HARRIS, Florida 

DAVE G. REICHERT, Washington 

MICHAEL MCCAUL, Texas 

PETER T. KING, New York (Ex Officio) 

KENDRICK B. MEEK, Florida 

EDWARD J. MARKEY, Massachusetts 

ZOE LOFGREN, California 

SHEILA JACKSON-LEE, Texas 

BILL PASCRELL, JR., New Jersey 

BENNIE G. THOMPSON, Mississippi (Ex Officio) 
(III)

C O N T E N T S

Page 

STATEMENTS

The Honorable Mike Rogers, a Representative in Congress From the State 

of Alabama, and Chairman, Subcommittee on Management, Integration, 

and Oversight ....................................................................................................... 1

The Honorable Kendrick Meek, a Representative in Congress From the State 

of Florida, and Ranking Member, Subcommittee on Management, 

Integration, and Oversight .................................................................................. 2

The Honorable Peter T. King, a Representative in Congress From the State 

of New York, and Chairman, Committee on Homeland Security .................... 4

The Honorable G. Thompson, a Representative in Congress From the State 

of Mississippi, and Ranking Member, Committee on Homeland Security ...... 5 

The Honorable Sheila Jackson-Lee, a Representative in Congress From the 

State of Texas ....................................................................................................... 30

The Honorable Bill Pascrell, Jr., a Representative in Congress From the 

State of New Jersey ............................................................................................. 28

WITNESSES 

Ms. Kathy L. Dillaman, Associate Director, Federal Investigations Processing 

Center, Office of Personnel Management: 

Oral Statement ..................................................................................................... 17

Prepared Statement ............................................................................................. 19

Mr. K. Gregg Prillaman, Chief Human Capital Officer, U.S. Department 

of Homeland Security: 

Oral Statement ..................................................................................................... 6

Prepared Statement ............................................................................................. 9

Mr. Dwight Williams, Director, Office of Security, Department of Homeland 

Security: 

Oral Statement ..................................................................................................... 13

Prepared statement .............................................................................................. 14

PANEL II 

Mr. John Gage, National President, American Federation of Government 

Employees: 

Oral Statement ..................................................................................................... 51

Prepared Statement ............................................................................................. 53

Ms. Colleen M. Kelley, President, National Treasury Employees Union: 

Oral Statement ..................................................................................................... 42

Prepared Statement ............................................................................................. 44

Professor Charles Tiefer, Professor of Law, University of Baltimore School 

of Law: 

Oral Statement ..................................................................................................... 68

Prepared Statement ............................................................................................. 69

APPENDIX 

FOR THE RECORD

QUESTIONS AND RESPONSES

Mr. Gregg Prillaman and Mr. Dwight Williams ................................................... 95

(1)

RETENTION, SECURITY CLEARANCES, 

MORALE AND OTHER HUMAN CAPITAL 

CHALLENGES FACING THE DHS 

Thursday, May 18, 2006

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:34 a.m., in Room 

311, Cannon House Office Building, Hon. Mike Rogers [chairman 

of the subcommittee] presiding. 

Present: Representatives Rogers, King (Ex Officio), Meek, Jackson-Lee, Pascrell, and Thompson (Ex Officio). 

Mr. ROGERS. This meeting of the Subcommittee on Management, 

Integration and Oversight of the Committee on Homeland Security 

will come to order. 

Today we are holding a hearing on a wide range of personnel 

challenges facing the Department of Homeland Security. Specifically, these include numerous vacancies in key positions, high turnover among senior officials, staff shortages in critical areas, inadequate training for certain employees, and potential lapses in security. 

First let me welcome the witnesses and thank them for taking 

the time to be here today. We look forward to your testimony and 

your answers to our questions. 

It has been over three years since the Department was established, yet senior officials continue to leave after short periods of 

time. I raised this issue with Secretary Chertoff over a year ago 

during a full committee hearing. At that time the Secretary agreed 

the number of vacancies is a growing problem. Yet today, we continue to see a number of key vacancies, including the Undersecretary for Science and Technology, the Assistant Secretary for Cyber 

Security, the Chief Financial Officer, the Chief Privacy Officer, and 

the Commissioner for Customs and Border Protection. Other key 

resignations are expected soon. 

I am concerned this high turnover undermines the Department’s 

effectiveness. It could also very well weaken our efforts to integrate 

the Department’s many agencies and further erode employee morale. 

Another personnel issue we will examine today is the Department’s security clearance process. The Brian Doyle situation and 

criminal charges brought against other DHS employees raise a 
2

number of serious questions regarding the Department’s background investigation procedures and its monitoring employees’ use 

of electronic equipment. 

The recent controversy over the Shirlington Limousine contract 

revealed the Department does not conduct background checks on 

contractors. The result was that a convicted felon with poor past 

job performance received two separate contracts totalling $25 million. The Department’s former Inspector General called this process, quote, ‘‘textbook poor’’, because it, quote, ‘‘failed to turn up 

readily available information about Shirlington Limousine’s finances and performance.’’ The Ranking Member and I submitted a 

document request to the Department regarding its contract with 

Shirlington Limousine, and we intend to hold a separate hearing 

on limousine contracts early next month. 

During the past year, DHS employees have been charged with 

various offenses, including smuggling and harboring illegal aliens, 

kidnapping, drug trafficking, bribery, and assault with a deadly 

weapon. Given its critical role in helping secure our Nation, I believe the Department should have a higher standard when it comes 

to screening and monitoring its employees. 

Today, we will hear just how secure the Department of Homeland Security is. And with that, I will now yield to my friend and 

colleague, the Ranking Member, the gentleman from Florida, Mr. 

Meek, for any statement he may have. 

Mr. MEEK. Thank you, chairman. And I want to welcome our 

first panel and the second panel. And I am glad that we are having 

this hearing, this is something that we have talked about doing, 

and having the support of the chairman and the ranking member 

here this morning I think is very, very important. And I think it 

sends a very strong message that we are serious about what we are 

meeting on here today, and that is dealing with the morale at the 

Department and also management. 

I requested this hearing, and I look forward to, Mr. Chairman, 

working with you. We both mutually came together and said this 

was very, very important. 

I strongly believe that the personnel problems at the Department 

of Homeland Security deserve this committee’s attention. I am not 

alone in this view. In the last few days, I have received dozens of 

letters from rank-and-file employees that have written us already 

prior to the hearing thanking us for having this hearing. 

And Mr. Chairman, I have these letters right here. This is prior 

to the hearing. This is not even after the hearing, thanking us for 

having this hearing because it is the reason why this is so important towards our national security and morale at the Department. 

Here are some of the things that they have said in these letters, 

and I have just taken a few of the excerpts from it. Individuals are 

saying, what worries me the most is that the Department of Homeland Security has created a Department that is driving away talented and committed employees. Morale is lower than it has ever 

been before. DHS management doesn’t seem to have a clue about 

motivating employees. And employees are not receiving the right 

and fair treatment regarding the discipline, and their standard of 

living has been cut. 
3

They tell me, also, that the training is inadequate; this is Department of Homeland Security employees. They also tell me that 

they lack the tools needed to fulfill the Homeland Security mission. 

As a former law enforcement officer, I know firsthand how vital 

it is to be able to have the tools to execute your mission. Good morale is also critical for effective law enforcement in any organization, be it sworn or not sworn. 

Good morale just doesn’t happen. It certainly hasn’t happened at 

the Department. Instead, the Department’s workforce regularly express anxiety. The major source of this anxiety, to sum up it in a 

catchy name, is MAX HR. Under the new personnel program, 

workers have already had to adjust to a merge of 22 agencies into 

one and will have to see their long-standing civil service protection 

stripped away. In its place, they are calling this so-called new program Pay For Performance, in an appeals process that is totally 

housed within the Department of Homeland Security. I am well 

aware of the home court advantage. This strikes me as not only 

having home court advantage, but also having all the referees on 

the payroll. 

Like many of the Department of Homeland Security employees, 

I have deep concerns about how fair these policies are and will be 

executed. I also, as a member of the Armed Services Committee, 

have authored legislation which will protect employees’ rights at 

the Department of Defense based on their pay-for-performance personnel system. Fortunately, the courts have stepped in to block the 

Department of Defense from implementing their system as well. 

We cannot deny collective bargaining rights by ignoring Congressional intent. What is to stop a manager from treating an employee 

that they don’t want to give a raise to from shifting from a volunteer to a worker in an extra shift? 

I think it is very, very important, Mr. Chairman, that we continue to focus on these issues as not only you outlined in your 

opening statement, but we also focus on making sure that we have 

morale. Morale, in my opinion, will equal individuals staying at the 

Department, working on behalf of the American people and protecting our country in a way that they sought out to do in the beginning, not have in-house personnel issues, not have mismanagement, and a lack of oversight that has not only embarrassed the 

Department of Homeland Security, but the employees that work 

within the Department. 

As we look at it as Members of Congress, and definitely in the 

Oversight Committee, it is very, very important that we do not let 

these rank-and-file employees down, and we work on the issue of 

attrition at the Department because it is not good for national security. It is not good for the Department of Homeland Security, and 

it is not good for the American people. 

So I look forward to hearing from our first panel and our second 

panel as we start to get into the workings of the Department of 

Homeland Security, and hopefully, we will get our questions answered in this hearing and in future hearings. Thank you, Mr. 

Chairman. 

Mr. ROGERS. I thank the gentleman. 
4

The chair is now pleased to have with us and pleased to recognize the chairman of the full committee, the gentleman from New 

York, Mr. King, for any statement he may have. 

Mr. KING. Thank you very much, Chairman Rogers. 

Let me commend you at the beginning for all the work you have 

done as chairman, especially on this very vital issue that we are 

dealing with today, because to me it goes to the very heart of some 

very, very significant issues affecting the Department of Homeland 

Security. For instance, there are just three of the matters that we 

covered today that I have a particular interest in. One was the 

New York City subway alert last year in which, to me, the Department acted in many ways extremely improperly. As the City of 

New York was acting in a very appropriate way to increase surveillance on the subways, alerting the people to what possibly could be 

happening, we had members of the Homeland Security Department 

selectively leaking to newspapers, undermining the Police Commissioner and the Mayor of New York, trying to diminish the nature 

of the threat, and speaking against them in a way which created 

dissension. It created confusion among the people, and it was entirely inappropriate. At the same time they were doing that, there 

were other officials in the Department of Homeland Security who 

were advising their neighbors and friends and relatives to leave the 

city and alerted them because of the serious nature of the threat. 

I realize that two employees have been suspended for that, and 

there are proceedings against them. I think it goes again to the 

heart of the Department, where you have, on the one hand, senior 

employees undermining the conduct of the Police Commissioner of 

New York and the Mayor of New York, and at the same time having employees of the Department improperly and illegally notifying 

their friends and neighbors as to what they thought was going to 

be a serious threat. That, apart from the fact that there was selective consideration being given to relatives of employees of the Department, also ran the risk of alerting terrorists that we were on 

to what was happening. This was classified information which 

should not have been released, and to me, it is very important we 

find out exactly how that happened and why, and what action ultimately is going to be taken against those who did leak that information. 

Also, in the case of Brian Doyle, you are talking about a person 

in a very senior position who has been charged with very serious 

sexual offenses which are bad enough in themselves, but also, it 

would have left him open—if he had in fact been dealing with 

someone who was a foreign agent or somebody involved with organized crime or somebody involved with the criminal syndicate—to 

blackmail where he could have provided very important information. Yet it turns out that in his prior employment he also had 

similar experiences as far as dealing with pornography. I want to 

know what the hiring practices were, why that previous experience 

was not revealed, and how he was allowed to be hired. 

Thirdly, of course, is the whole case of Shirlington Limousine, 

which is bad enough when we have the backdrop of kickbacks, 

gambling, prostitution, and bribery. But it is problematic that a 

company such as this, owned by someone with a criminal background, with a very poor performance record in its previous con-
5

tracts, could have been given a contract where they would have access to top ranking officials in the Department of Homeland Security whom they would be driving around. They would be able to 

overhear conversations, have access to what was going on, where 

they were going, whom they were meeting with. All of this, again, 

raises very serious questions. 

I look forward to the testimony this morning to see what procedures will be in place to prevent similar instances from happening 

in the future, because again, the Department of Homeland Security 

is different from many other Federal departments in that the nature of what you are dealing with literally involves the life and 

death of American citizens. We can’t be allowing people with 

known sexual histories who have been removed from previous jobs 

to get high-ranking jobs and security clearances in the Department 

of Homeland Security. We can’t allow people in the Department to 

be undermining local police officials while at the same time other 

members of the Department are leaking classified information. And 

we certainly can’t be allowing companies who are owned by criminals and have a poor performance record to be given contracts 

where they would have access to high-ranking officials in the Department of Homeland Security. 

So I look forward to the testimony. And to Chairman Rogers, 

again, I thank you for the effort and initiative that you have shown 

in this matter. And I yield back the balance of my time. 

Mr. ROGERS. I thank the gentleman. And we are similarly happy 

to have the Ranking Member of the full committee with us today, 

the gentleman from Mississippi, Mr. Thompson. And I now recognize him for any statement he may have. 

Mr. THOMPSON. Thank you very much, Mr. Chairman. And like 

the Chairman of the full committee, I am happy that we have finally gotten around to this subcommittee hearing which I know my 

ranking member has been very anxious on having. 

There is no question that the procurement process at DHS is 

flawed. There is no question the morale of its employees is a real 

concern of ours. I hope that from the testimony offered today, we 

can look at preparing some solutions for it. 

I would hate for this committee to have to get in the business 

of micromanaging DHS in its personnel and procurement practices, 

but unless we can see greater improvement, Mr. Chairman, I am 

not real certain that we won’t have to get into that business. 

I am concerned about the number of vacancies that continue to 

exist in FEMA. We are 13 days from a new hurricane season, and 

we have only 73 percent of the appropriated staff of FEMA on 

board at this point. So when I am told that we are prepared for 

the next hurricane season, I wonder, how can we be prepared with 

only 73 percent of the staff that is required to run the agency? 

So I am concerned about it. I am concerned that every survey of 

employees I see ranks DHS at or next to the bottom of every survey in terms of employee morale; something is wrong with that picture. I hope we can get some insight as to why employee morale 

is where it is. 

I can go on and talk about individual turnover and other things 

related to TSA and other things, but Mr. Chairman, let me compliment you and the ranking member of the subcommittee for put-
6

ting together the hearing. I look forward to the testimony of both 

panels. I am sure it will be enlightening at best, and I yield back. 

Mr. ROGERS. I thank the gentleman. 

And he is right, we don’t want to have to be micromanaging, but 

as we have assured Department officials over the last year and a 

half and want to continue to assure everybody, we will be zealous 

in our oversight in this committee. This is a very real problem that 

is alarming to us, and we look forward to hearing some substantive 

ideas as to how we are going to resolve these concerns. 

So with that, I would like to tell any other Members that we will 

allow their opening statements to be submitted for the record. 

We are pleased to have with us today two panels of distinguished 

witnesses. Let me remind the witnesses that your entire statements will be submitted for the record, and we would ask that if 

you would like to summarize those,to try to keep your remarks 

within 5 minutes so that we can spend as much time as possible 

probing specific questions that Members may have for you after 

your statements. 

Mr. ROGERS. The Chair now calls up the first panel and recognizes Mr. Gregg Prillaman, Chief Human Capital Officer for the 

U.S. Department of Homeland Security. We look forward to your 

statement, and thank you for being here, Mr. Prillaman. 

STATEMENT OF K. GREGG PRILLAMAN 

Mr. PRILLAMAN. Thank you, Chairman Rogers, Ranking Member 

Meek, and members of the committee. I do appreciate being here 

and having the opportunity to talk with you today about the Department’s human capital initiatives and programs. 

I was appointed at the Department as the Chief Human Capital 

Officer on September 7th of last year after more than 30 years in 

the human capital field as a professional in the government and, 

in the private sector, as an executive and as a management consultant. Through the years, I have worked with more than 30 government agencies in a wide array of private sector firms, not-forprofits and State and local governments in every area of human 

capital management. That is my field. That is my area of specialty. 

And even though I have only been with DHS now for 8 months, I 

think I have a pretty good sense of the complexity of the organization and many of the issues and challenges that DHS is confronting. 

As a Chief Human Capital Officer, I provide direction and oversight for all elements of the Department’s human capital programs, 

including policy, strategic planning, learning and development, recruitment, performance management, compensation, benefits, employee relations and other areas. I also lead the Department’s 

Human Capital Council, which is made up of all the human capital 

directors of all the various components. And I am active as well in 

the government-wide Council of Capital Officers as sponsored by 

the Office of Personnel Management. 

DHS is a very complex organization from a human capital perspective. It is the third largest Federal department with nearly 

185,000 employees located across the United States and around the 

world. Each of our components has a very different culture and 

character, and our work force is more varied than most other agen-
7

cies. We have employees in more than 220 different occupations, 

ranging from law enforcement officers and firefighters to doctors, 

economists, intelligence officers, pilots, scientists, airport screeners, 

accountants, Secret Service agents, systems integrators, plant and 

animal inspectors, and we even have morticians. It is a very complex organization. 

As you can imagine, recruiting, managing and retaining high 

quality talent is a major challenge for us, and the overarching goal 

in human capital—the organization that I lead—is to support our 

managers and employees by providing an environment where they 

have clear roles and responsibilities, challenging assignments, the 

tools and training they need to perform their work, opportunities 

to grow, and rewards that are commensurate with their contributions. 

DHS was created, as you all know, by the combination of 22 different organizations, which makes it one of the largest mergers and 

acquisitions in the history of the Federal Government. I believe 

most corporate mergers and acquisition specialists would say that 

it takes 5 to 7 years or longer to work through the throws of a 

merger to end up with a smooth-running, well-integrated organization. Accordingly, at this point, DHS is about 3 years into a 7-year 

journey. While the Department has made great progress in many 

areas, it still has challenges to overcome before it becomes a fully 

integrated organization. 

One of our major challenges involves the disruption any merger 

creates and the resulting impact on employee morale. It was apparent from the results of OPM’s 2004 Federal Human Capital Survey 

that a number of employees at DHS were concerned about the organization. As you know, about 150,000 employees governmentwide responded to a survey that was designed to measure their satisfaction with their departments and agencies across government. 

The survey results for DHS showed many areas of strength, including employee commitment to the Department’s mission and 

goals, but it also showed significant opportunities for improvement, 

especially in the areas of performance culture, leadership and work 

experience. DHS’s score placed it 29th out of 30 large agencies in 

the survey. 

We believe that time and becoming comfortable with the new organization will reduce some of the concerns that the employees 

voiced. But we also believe that improving organizational understanding, communications, management skills and a support infrastructure will also help. To this end, we have created a Federal 

Human Capital Survey Response Team within DHS which is comprised of representatives of each component. As we examine the 

survey results, we are reviewing leading practices inside and outside the Department and developing a plan of action for each component to improve staff satisfaction within the organization. 

We also believe that the elements of MAX HR, a new human capital system we are implementing, will have a positive impact on 

morale. For example, the new performance management system is 

designed to clarify each employee’s role and responsibility and give 

them a set of clear performance objectives that are tied to the Department’s overall mission objectives. The emphasis of the program 

is on clarity and line of sight so employees understand exactly 
8

where they fit in the organization and what their priorities should 

be. 

More importantly, the system also requires that managers and 

supervisors go through a training program to improve their skill in 

communicating with employees, making assignments, setting performance objectives, providing feedback and coaching to employees, 

receiving feedback from employees, and providing fair and balanced 

evaluations at the end of the year about employee performance. 

There is an old adage that employees join an organization and they 

leave a manager. Our intention is to train our managers and supervisors in how to better manage employees so that we don’t have 

employees leaving because their first-line supervisors aren’t doing 

a good job. To date, we have put more than 8,000 managers and 

supervisors through the training program and should train another 

6,000 employees by the end of 2006. 

We have also made progress across the Department. We have—

and progress particularly in integrating those 22 organizations into 

one organization. We have a Human Capital Council that meets 

regularly, which is made up of the human capital representatives 

of all the various components. We are working together to try to 

solve our collective problems. We are integrating technology across 

the Department, replacing some 144 Legacy HR systems that 

didn’t talk to each other very well with organization-wide systems. 

We have a single payroll system at this point which in fact replaced eight that were across the Department. We are putting in 

a web-enabled time and attendance system, a new Microsoft empower system which is going to be our core for HR IT, a new erecruitment system, learning management system, performance 

management system. We are doing what Fortune 500 corporations 

have been doing for the last 15 years, and that is trying to create 

an integrated technology-based human capital system. 

We have also improved communications I believe across the Department. We are doing better on the President’s Management 

Agenda. I think we are making progress in a number of areas 

there. And we are also making progress on MAX HR. The performance management elements of MAX HR have already been deployed for 4,500 managers, supervisors and employees at the headquarters, Coast Guard, Immigration and Customs Enforcement, 

and our plan is to continue rolling out performance management 

through this new system that we think will link employees better 

to the organization’s objectives in training managers. We plan to 

have that system in place for as many as 15,000 employees during 

fiscal year 2007. And we are making progress also on building a 

pay-for-performance system and a broadband classification system 

that we think will provide managers better flexibility in hiring and 

motivating employees and will give employees a chance to be rewarded in more commensurate fashion with their contributions 

across the organization. 

I see that I am out of time, but I would be happy to answer any 

questions that the committee may have. 

[The statement of Mr. Prillaman follows:]
9

PREPARED STATEMENT OF K. GREGG PRILLAMAN

Chairman Rogers, Ranking Member Meek and members of the Committee: Thank 

you for the opportunity to be here today to discuss the current state of the Department’s human capital initiatives and programs. 

I was appointed as the Department’s Chief Human Capital Officer on September 

7, 2005 after more than 30 years in the Human Capital field as a professional, an 

executive, and a management consultant. I spent the first thirteen years of my career as a career Federal employee with the U.S. Information Agency and the Voice 

of America, five years as the Corporate Director of Human Resources with a federally-funded corporation, two and one-half years as the Director of Human Resources 

for a county government, and ten years as a management consultant with leading 

Human Capital consulting firms. Through the years I have worked with a wide 

array of Federal, state and local governments, corporate, and not-for-profit organizations and have gained significant experience in every major area of Human Capital 

management. 

As the Chief Human Capital Officer, I provide direction and oversight for all elements of the Department’s Human Capital programs, including policy, strategic 

planning, learning and development, recruitment, performance management, compensation, benefits, union and employee relations, and other areas. I also lead the 

Department’s Human Capital Council which is made up of the Human Capital Directors for the various Department components, and am an active participant on the 

government-wide Council of Chief Human Capital Officers. Even though I have only 

been with the Department a few months, I believe I have gained a sound understanding of the complexities of the organization and the challenges we face in recruiting, retaining, and supporting the high-quality workforce this Department 

needs to achieve its critical mission.

The Complexity of the Workforce 

I would like to first address the complexity of the DHS workforce. 

DHS is the third-largest Federal Department, with nearly 185,000 employees located across the United States and around the world. Each of our components—

large and small—has a distinct culture and character. The DHS workforce is also 

more varied than most other federal agencies, with employees in more than 220 different occupations—ranging from law enforcement officers and firefighters to doctors, economists, intelligence officers, pilots, scientists, airport screeners, accountants, Secret Service agents, systems integrators, plant and animal inspectors, and 

many, many others—even morticians. 

As of April 1, 2006, we have more than 40,000 Coast Guard military personnel; 

40,500 transportation screeners; 17,800 customs and border protection officers; 

11,500 border patrol agents; 9,600 criminal investigators; 2,000 IT professionals; 

1,700 police officers; 1,300 attorneys; 800 engineers; and 700 contract specialists.

Last fiscal year, our workforce: 

• Processed more than 430 million pedestrians and passengers into the United 

States; 560,000 of who were denied entry, 

• Processed 29 million trade entries and collected $31.4 billion in revenue, 

• Seized nearly 600 lbs of narcotics at ports of entry and nearly 1.2 million lbs of 

narcotics between ports of entry, 

• Apprehended over 15,000 aliens who were either fugitives or in violation of immigration law. 

• Since 2003, arrested more than 6,600 child predators as part of Operation Predator; deporting more than 3,400 from the U.S., 

• Arrested more than 2,600 human smuggler and traffickers, 

• Effectively trained over 47,000 law enforcement agents at the Federal Law Enforcement Training Center, 

• Conducted more than 26,800 port security patrols, 5,800 air patrols, and 26,000 

security boardings, 

• Processed 7.3 million immigration benefits applications, and 

• Performed 35 million background security checks on persons seeking immigration 

benefits. 

Recruiting and staffing for this varied workforce continues to be a major challenge. In fiscal year 2005, we processed thousands of job applications and hired 

more than 11,500 new employees. In fiscal year 2006 to date, DHS has hired over 

3,500 employees. 

The dedicated men and women who make up the Department’s incredibly wideranging workforce are essential to achieving the organization’s mission on a daily 

basis. Our overarching goal in human capital is to support them by providing an 

environment where they have clear roles and responsibilities, challenging assign-
10

ments, the tools and training they need to perform their work, opportunities to 

grow, and rewards that are commensurate with their contributions.

Organizational Transformation 

We have to remember that when DHS was created by combining 22 different organizations, it was one of the largest ‘‘mergers & acquisitions’’ to ever take place 

in the Federal government. I believe most corporate merger and acquisition specialists would say that it takes five to seven years (or longer) to work through the 

throes of a merger to end up with a smooth-running, well-integrated organization. 

Accordingly, at this point DHS is only three years into a seven-year journey. While 

the Department has made great progress, it still has challenges to overcome before 

it becomes a fully-integrated organization. 

One of our major challenges involves the disruption a merger creates and the resulting impact on employee morale. It was apparent from the results of the 2004 

Federal Human Capital Survey (FHCS) that a number of employees at DHS were 

concerned about the organization. As you know, about 150,000 employees, government-wide, responded to a survey designed to measure their satisfaction with their 

departments and agencies. The survey results for DHS showed many areas of 

strength, including employee commitment to the department’s mission and goals, 

but also significant opportunities for improvement, especially in the areas of performance culture, leadership, and work experiences. DHS’ scores placed it twenty 

ninth out of the thirty large agencies in the survey. 

We believe that time will reduce some of the concerns that employees voiced, but 

we also believe that improving organizational understanding, communications, management skills, and the support infrastructure will help. To this end, we created a 

Federal Human Capital Survey Response Team comprised of representatives from 

each DHS component to examine the survey results, to review leading practices inside and outside the Department, and to develop a plan of action for each component to improve staff satisfaction with the organization. 

We also believe that elements of MAXHR, the new human capital system we are 

implementing, will have a positive impact on morale. For example, the new performance management system is designed to clarify each employee’s roles and responsibilities and give them a set of clear performance objectives that are tied to the 

Department’s overall objectives. The emphasis of the program is on clarity and ‘‘line 

of sight’’ so employees understand exactly where they fit in the organization and 

what their priorities should be. 

The system also requires all managers and supervisors to go through a training 

program to improve their skills in communications with employees, making assignments, setting performance objectives, providing feedback and coaching to employees, receiving feedback from employees, and providing a fair and balanced evaluation of the employee’s strengths and weaknesses at the end of the year.

Areas of Progress 

Given the enormity of the Department’s day-to-day operations, the Chief Human 

Capital Office is striving to implement innovative human capital policies and processes designed to better support the workforce. I am pleased to report that we have 

made significant progress in integrating our human capital priorities, programs and 

systems. 

FY 2005 marked the first full performance year under the DHS Human Capital 

Strategic Plan. Significant progress was made on each of the four major goals included in the plan: • Optimizing shared services • Improving hiring • Fostering a ‘‘team DHS’’ culture • Implementing robust human capital programs 

In addition, we have created a formal, replicable business process for validating 

and updating the plan’s goals and strategies to ensure that they are responsive to 

the rapidly changing environment that is today’s world. As a result of this business 

process, we developed a comprehensive set of human capital activities for FY 2006, 

and progress toward them is well underway.

Specific examples of our accomplishments include: • Human Capital Council: we established the Human Capital Council to represent component interests and provide strategic guidance and support for all 

human capital priorities and initiatives. 

• Technology: we are at the forefront of technology solutions, and are among 

the first Federal agencies to roll out the eOPF (Official Personnel File), under 

the auspices of the e-Gov initiative. We have also successfully consolidated duplicative human capital management and tracking systems, including reducing 

eight legacy payroll systems to one. In addition, we are making significant 
11

progress in implementing several new, enterprise-wide systems, including 

WebTA, EmpowHR and a Learning Management System. We are currently soliciting proposals for an e-Recruitment solution. 

• Communications: we centralized human capital communication efforts to 

ensure employees receive consistent messaging on human capital priorities. We 

established a new intranet web page for the Chief Human Capital Office. This 

new site provides detailed information on a variety of program areas within the 

office and includes the latest information on the development of the MAXHR: program. 

• Progress on the PMA: we have made important progress on the human capital elements of the President’s Management Agenda, including: • Human Capital Strategy: In FY 2004, the Department issued its first 

Human Capital Strategic Plan (HCSP), which was aligned with the Department’s Strategic Plan. The HCSP identified four primary objectives: realizing operational and hiring efficiencies and effectiveness, optimizing 

shared services, fostering a ‘‘Team DHS’’ organizational culture, and implementing robust HC programs. These objectives were based largely on input 

from the employees, supervisors, and managers across the Department as 

well as from the HC community. On an annual basis, the Department’s HC 

Council reviews the progress that has been made towards these objectives 

and identifies very specific goals for the upcoming year, ensuring that the 

entire line of business is engaged in the realization of these goals. These 

are not only my goals, and those of the employees of the Office of the Chief 

Human Capital Officer, they are the shared goals of the entire DHS HC 

community. 

• Talent: DHS developed a Workforce Plan in FY05 and we have conducted 

a comprehensive analysis of the staffing and competency gaps within our 

Information Technology (IT) workforce and developed an implementation 

plan with milestones and performance measures to close those gaps. Currently we are assessing the competencies within our Human Resources 

(HR) workforce and will develop a plan by the end of June to close targeted 

competency gaps within that occupation. 

• Leadership and Knowledge Management: DHS is in the process of hiring 

an SES-level Chief Learning Officer within the CHCO to coordinate and 

oversee the Department’s learning and development programs and infrastructure. In addition, DHS has selected a vendor to develop a common 

Learning Management System for the Department, which will improve our 

ability to monitor learning and development activities. The CHCO is also 

working to design a homeland security professional development program 

to unify training and readiness throughout the public and private sectors. 

• Performance Culture: DHS expanded deployment of its new performance 

management program beyond Headquarters to managers and supervisors in 

the U.S. Coast Guard and Immigration and Customs Enforcement last 

month—the latest milestone in implementing a performance-based culture 

throughout the Department. 

• Progress on MAXHR: we have made progress in implementing a new, performance-based human capital system, called MAXHR, to drive results across the 

Department. 

• Performance management: a new MAXHR Performance Management Program has been designed and is now deployed to more than 4,500 employees 

in headquarters, the U.S. Coast Guard, and Immigration and Customs Enforcement. A cornerstone of the MAXHR Performance Management Program 

is the link between individual employee performance goals and the strategic 

goals of their component and the department. Under MAXHR, individual 

performance goals are identified and documented in the Performance Plan 

and Appraisal using the MAXHR e-Performance Tool. By the end of 2006, 

coverage should be expanded to a total of 18,000 employees across the department. 

• Broadband compensation system: the design of the new pay banding system is nearing completion, with proposed occupational clusters and pay 

bands developed for each cluster. The design is currently being vetted by 

the Human Capital Council and others. 

• Pay-for-performance: the new pay system is on track for implementation 

beginning in February 2007. Rollout of the pay system will continue in 

phases through calendar year 2008. 

• Labor relations/Adverse actions and Appeals: the U.S. District Court for 

the District of Columbia enjoined DHS from implementing the labor relations provisions of the MAXHR regulations and a new mitigation standard. 
12

We remain hopeful that the Court will allow us to move forward with these 

provisions, which will help us to manage, recognize and reward our employees more effectively, while preserving their fundamental rights and due 

process. • Providing high quality and effective training for our staff, supervisors, managers, and executives: we have successfully trained a critical 

mass of DHS employees. • In fiscal year 2005, DHS trained (directly or via distance learning) approximately 3 million people, including DHS employees, firefighters and 

other federal, state and local government employees. 

• In fiscal year 2006, approximately 8,000 supervisors and managers have 

received performance leadership training to prepare them for the transition 

to MAXHR, with an additional 6,000 to be trained by October 2006.

Organizational Challenges 

Managing the Department’s human capital infrastructure and building the 

MAXHR system are not without challenges. In line with the DHS Human Capital 

Strategic Plan, we continue to forecast and plan for the challenges we will face moving forward—and develop innovative ways to manage our human capital resources 

to respond to these issues. Some of these key challenges we face include: • Continuing the integration of a diverse workforce with strong legacy 

cultures into one, cohesive team with a shared culture 

• Recruiting and retaining a high-performing workforce 

• In fiscal year 2005, DHS hired over 11,500 employees.In fiscal year 2006 

to date, DHS has hired over 3,500 employees. 

• DHS’ average performance against the OPM 45-day hiring model during 

FY 2005 was 44 days. (This includes 3 steps: rating, ranking to certificate 

delivery (1–15 days); selection (2–7 days); and extension of job offer (1–3 

days). • Managing the impending ‘‘Retirement Wave’’ at DHS 

• By 2009, 14% of the DHS workforce will be eligible to retire. While the 

overall number is lower than other agencies, the alarming fact is that 49% 

of SES level employees and 37% of GS–15 level employees will be eligible 

to retire. This ‘‘leadership drain’’ is an issue that we are addressing in partnership with OPM. 

• Some components have much higher retirement eligibility rates, including the U.S. Secret Service. By 2010, 91% of their SES level employees will 

be eligible to retire, and 75% of their GS–15s. 

• The average age of DHS employees is 42 vs. the federal average of 46. • Improving morale and commitment across the organization • Improving the quality and speed of HR servicing across the Department 

Leveraging technology to improve operational efficiencies and economies of 

scale in the Human Capital area 

• Implementing enterprise-wide, core HR systems, including EmpowHR, 

eOPF, WebTA, ePerformance, eLearning and eRecruitment 

• Standardizing business processes where appropriate 

• Maximizing resources through shared service initiatives 

• Eliminating/reducing redundancies 

• Clarifying roles and responsibilities 

• Continuing to drive toward creating a high-performance culture that 

can be a model for the rest of the government

Conclusion 

Although we still have a lot of challenges before us, DHS has made real progress 

in integrating human capital programs and advancing innovative, new ways of both 

managing and supporting the Department’s most valuable assets—its people. Moving forward, our strategic human capital priorities include: 

• Playing a key role in achieving the Department’s mission objectives 

• Driving high-quality HC customer service across the Department 

• Implementing MAXHR, focusing on creating a high-performance culture across 

the Department 

• Expanding functional integration and fostering a ‘‘Team DHS’’ culture 

• Creating efficiencies through shared services and streamlined business processes 

• Leveraging technology to improve access, service, speed and efficiency 

• Driving innovation and change 

• Creating a model CHCO office and healthy relationships with clients and 

stakeholders, both internal and external 
13

Thank you for your leadership and your continued support of the Department of 

Homeland Security and its human capital management programs. I would be happy 

to answer any questions you may have.

Mr. ROGERS. Thank you, Mr. Prillaman, for your statement. 

The Chair now recognizes Mr. Dwight Williams, Director of the 

Office of Security for the U.S. Department of Homeland Security 

for any statement he may have. 

STATEMENT OF DWIGHT WILLIAMS 

Mr. WILLIAMS. Chairman Rogers, Congressman Meek and distinguished members of the subcommittee, I appreciate the opportunity 

to appear before you today to discuss the process and procedures 

by which the Department of Homeland Security issues security 

clearances. 

My name is Dwight Williams, and I am a career executive serving as a chief security officer for the Department. My office’s two 

primary responsibilities are to provide security policy oversight and 

guidance to DHS, and to provide direct security, support and services to those DHS components without a dedicated security office. 

Prior to becoming the DHS chief security officer, I spent 4 years 

at U.S. Customs and CPB as a director of the Security Programs 

Division, and more than 20 years with the Washington, D.C., Metropolitan Police Department in a variety of assignments culminating in the director of the Office of Professional Responsibility. 

The Department’s mission to lead the National Effort to Secure 

America requires that only trustworthy, reliable individuals granted access to classified information are placed in sensitive positions. 

DHS therefore vets all of its employees to a level appropriate to 

their duties and responsibilities. Like other executive branch agencies, DHS conducts its vetting process in accordance with numerous 

executive orders and regulations. Through the DHS Chief Security 

Officers Council, which is comprised of the CSOs from the major 

components, as well as other key security officials, my office ensures that the policy formulation and implementation are consistent with these regulations. 

The CSO Council also provides a forum for senior security officials to address issues affecting the DHS security community, and 

to develop and implement a common vision and strategic direction 

for security within the Department. 

Prior to giving you an overview of the Department’s security 

clearance process, I would like to briefly distinguish between Federal employees and contractors. 

DHS vets all contractors with staff-like access to its facilities. 

With respect to contractor clearances, DHS participates in the National Industrial Security Program under which the Office of Personnel Management conducts background investigations in connection with DHS classified contracts. I would also like to point out 

the difference between suitability for government employment and 

eligibility to hold a security clearance. 

Suitability, which considers an individual’s character, reputation 

and trustworthiness in relation to the specific job position, is a requirement for all government employment, regardless of whether 

the employee is eligible to access classified information. Although 

specific suitability standards vary according to component mission 
14

and position, some factors, such as criminal or dishonest conduct, 

apply across the board. 

Obtaining a security clearance at DHS, as elsewhere in the executive branch, involves several steps. First, employees must have a 

need for access. Second, they must successfully undergo a comprehensive background investigation appropriate for their level of 

access. With the exception of the Secret Service, CPB, ICE and the 

components serviced by the Office of Security, other DHS components are required to use OPM to conduct these various background investigations. For components with delegated background 

investigation authority, DHS has contracted with several companies to provide this service, enabling us to reduce the time it takes 

to complete investigations without compromising quality or comprehensiveness. 

Third, the investigation is adjudicated according to the 13 government-wide adjudicated guidelines. Trained and experienced adjudicators review the entire investigative file, take into account 

mitigating information and, in some cases, request a follow-up 

interview before deciding whether to recommend denying, granting 

or revoking a security clearance. 

Finally, employees are briefed on the responsibilities for protecting classified information, sign a nondisclosure agreement acknowledging those responsibilities and agree to abide by all appropriate security requirements. 

Reciprocity, which is mandated by both statute and executive 

order, requires DHS to accept an individual’s current security 

clearance without reviewing the file or performing additional 

checks, only limited exceptions to this policy are permitted. It is 

important to emphasize, however, that reciprocity does not apply to 

suitability determinations. New suitability determinations can appropriately be made if an employee of another agency applies for 

a position at DHS or if an employee changes positions within the 

Department. 

Over the past 3 years, the demands within the Department and 

across the executive branch for personnel security clearances have 

increased significantly. The Department is continuing working to 

evaluate and assess ways to approve the process, such as by applying enhanced continuing evaluation measures to our cleared population. Through this and similar initiatives, DHS is committed to 

providing the most effective and highest quality personnel security 

services. 

Thank you, again, Mr. Chairman, for the opportunity to speak to 

you today. And I will be happy to answer any questions from you 

or the other members of the subcommittee. 

[The statement of Mr. Williams follows:]

PREPARED STATEMENT OF DWIGHT M. WILLIAMS

Introduction 

Chairman Rogers, Congressman Meek, and distinguished Members of the Subcommittee: 

I appreciate the opportunity to discuss the process and procedures used by the 

Department of Homeland Security (DHS) for determining employee suitability and 

issuing security clearances. My name is Dwight Williams, and I am a career executive serving as the Chief Security Officer (CSO) for the Department. My office’s two 

primary responsibilities are to provide (1) security policy oversight and guidance to 
15

DHS and (2) direct security support and services to DHS components without dedicated security offices. Prior to becoming DHS CSO, I spent four years at legacy U.S. 

Customs and Customs and Border Protection (CBP) as the Director of the Security 

Programs Division, and more than 20 years with the Washington, D.C. Metropolitan 

Police Department in a variety of assignments culminating as the Director of the 

Office of Professional Responsibility. 

The Department’s mission to lead the unified national effort to secure America requires that only trustworthy and reliable individuals are granted access to classified 

information or placed in sensitive positions. The Department owes this duty to its 

employees, other government agencies, and the American people. As a result, the 

Department imposes the highest personnel security standards for its employees and 

has established first-rate programs to meet these standards.

Background 

The efficiency and effectiveness of the personnel security vetting processes directly 

affects each DHS component. The Department thoroughly vets all of its employees 

as well as state, local, and private-sector partners who require access to classified 

information. 

Various executive orders and regulations govern the process by which DHS and 

all other executive branch agencies determine employee suitability and grant access 

to classified information. The DHS Office of Security, through the Chief Security Officers’ Council—which is comprised of the chief security officers of the Department’s 

major components as well as other key DHS security officials—ensures that policy 

formulation and implementation are consistent with applicable regulations. The 

CSO Council also provides a forum for these senior DHS security officials to address 

issues affecting the DHS security community and to develop and implement a common vision and strategic direction for security within the Department.

The Clearance Process 

Prior to discussing the Department’s security clearance process, it is important to 

briefly note two distinctions: between federal employees and contractors and between suitability for government employment and eligibility to hold a security clearance.

Employee vs. Contractor Clearances 

DHS vets all contractors with staff-like access to its facilities. With to respect to 

contractor clearances, DHS is a signatory to and participates in the National Industrial Security Program (NISP). The NISP was established by Executive Order 12829 

to serve as a single, integrated program for the protection of classified information 

released to or accessed by industry. The President designated the Secretary of Defense as the Executive Agent for the NISP. Until the recent transfer of its personnel 

security investigative mission to the Office of Personnel Management (OPM), the 

Defense Security Service (DSS) conducted investigations for personnel security 

clearances in support of DHS classified contracts, grants, or related activities and 

monitored compliance with safeguarding requirements. OPM has now largely assumed that responsibility. The Defense Industrial Security Clearance Office 

(DISCO), a field element of DSS, continues to adjudicate and issue personnel security clearances to DHS contractors.

Suitability vs. Eligibility 

A suitability determination, which considers an individual’s character, reputation, 

and trustworthiness in relation to the specific job position, is a requirement for all 

government employment, regardless of whether access to classified information is 

involved. The Office of Security ensures that components meet minimum suitability 

requirements; specific suitability standards beyond those requirements are the prerogative of the individual agency, enabling it to tailor them to its missions and positions. Although DHS’s myriad missions and components preclude a single one-sizefits-all approach to suitability, some specific factors such as criminal or dishonest 

conduct apply across the board.

Criteria for Establishing Eligibility to Access Classified Information 

As mandated by executive branch agencies, the primary criterion for granting access to classified information is an employee’s ‘‘need for access,’’ which is defined as 

a determination that an employee requires access to a particular level of classified 

information in order to perform or assist in a lawful and authorized governmental 

function.. 

In addition to possessing a ‘‘need for access’’ on a regular, on-going basis, employees must be granted a security clearance based upon a favorable adjudication of an 

appropriate background investigation, be briefed on their responsibilities for protecting classified information, sign a nondisclosure agreement acknowledging those 

responsibilities, and agree to abide by all appropriate security requirements.
16

Background Investigations 

Each DHS employee with a clearance is subject to a comprehensive, thorough 

background investigation, although different clearance levels require different levels 

of review. For example, to be eligible for a Top Secret clearance an employee must 

undergo a Single Scope Background Investigation (SSBI). For a Secret clearance and 

below, the scope of the investigation varies, but includes various database checks, 

criminal history record checks, and other sources as necessary to cover specific areas 

of an individual’s background. In addition to the initial investigation, employees 

with clearances are required to submit to periodic reinvestigations. (Periodic reinvestigations are conducted every 5 years for Top Secret and 10 years for Secret 

clearances.) With the exception of the Secret Service, CBP, Immigration and Customs Enforcement (ICE), and the DHS components serviced by the Office of Security, all other components are required to use OPM to conduct these various background investigations for their employees. The Secret Service uses its own employees to perform these investigations while CBP, ICE, and the OS have contracted 

with several companies to provide this investigative service. Process improvements 

and other management efficiencies have enabled my office to reduce the amount of 

time it takes to complete investigations without compromising quality and comprehensiveness.

Security Clearance Adjudication 

The DHS component security offices plus the Office of Security adjudicate background investigations for the employees they service according to the 13 government-wide adjudicative guidelines listed in 32 CFR Part 147. The adjudication process is designed to allow the careful weighing of these guidelines known as the 

‘‘whole person concept.’’ In other words, adjudicators review the investigative file, 

take into account mitigating information, and in some cases request a follow-up 

interview before deciding whether to recommend denying, granting, or revoking a 

security clearance. Adjudicative decisions are, to a certain extent, unavoidably subjective; however, decisions are based on the interpretation of the adjudicative guidelines noted above. These standards include an assessment of the individual’s allegiance to the United States, personal conduct, involvement with drugs and alcohol, 

and financial stability. My office has instituted several measures to help ensure adjudicative quality and consistency. Adjudicators receive both in-house and external 

training, and are mentored by senior personnel security specialists. In addition, 

DHS has established adjudicator roundtables to share information among components. Finally, the executive branch is currently reviewing the adjudicative process 

and actions of 23 agencies to identify training gaps or other variances that could 

adversely affect determinations.

Reciprocity 

The principle of reciprocity has been mandatory for executive branch agencies for 

more than a decade. The Intelligence Reform and Terrorism Prevention Act recently 

reiterated and expanded upon this requirement. Reciprocity mandates acceptance of 

equivalent personnel security clearances and accesses across federal agencies. In 

other words, if a prospective employee holds a current clearance as a result of previous military or other government service, the Department is required to accept 

this clearance without additional investigation. The reciprocity principle also governs personnel transfers among DHS components. In fact, recently issued executive 

agency-wide guidance prohibits agencies from requesting that individuals with existing security clearances complete a new security questionnaire; reviewing the existing questionnaire; reviewing the existing background investigation for the individual; or initiating any new investigative checks. Only limited exceptions to this 

policy are permitted, such as clearances granted by waiver or on a temporary or interim basis; when an individual is being considered for access to a program of a sensitivity level different from that of the existing program; or if there is known or existing derogatory information. It is important to emphasize that reciprocity does not 

apply to suitability determinations. As mentioned above, agencies are permitted to 

match specific suitability standards to their missions and positions. As a result, new 

suitability determinations can appropriately be made if an employee of another 

agency applies for a position at DHS (or if a DHS employee changes positions within 

the Department).

Conclusion 

Over the past three years, the demands within the Department (and across the 

executive branch) for personnel security clearances have increased significantly. 

Through internal DHS coordination initiated by my office as well via the inter-agency Security Clearance Oversight Group, the Department is continually working to 

evaluate and assess ways to improve the process of conducting and adjudicating 

background investigations and granting security clearances. For example, we are ex-
17

ploring ways to apply enhanced continuing evaluation measures to our cleared population. To this end, the Department is conducting pilot testing of the Defense Department’s Automated Continuing Evaluation System (ACES). ACES provides automated database checks on cleared individuals between their regularly scheduled 

periodic reinvestigations. Through this and similar initiatives, DHS is committed to 

providing the most efficient and highest-quality personnel security services. 

Thank you again, Mr. Chairman, for the opportunity to speak to you today. I will 

be happy to answer any questions from you or the other Members of the Subcommittee.

Mr. ROGERS. Thank you thank you very much, Mr. Williams. 

The Chair will now recognize Ms. Kathy Dillaman, Associate Director for the Federal Investigations Processing Center at the Office of Personnel Management. 

Welcome, Ms. Dillaman. We look forward to your statement. 

STATEMENT OF KATHY L. DILLAMAN 

Ms. DILLAMAN. Mr. Chairman, and members of the subcommittee, thank you for the opportunity to testify before you 

today on the services the Office of Personnel Management (OPM) 

provides to the Department of Homeland Security (DHS) in support 

of their personnel security clearance process and the DHS’ Human 

Capital Strategic Plan. 

OPM’s mission is to ensure the Federal Government has an effective civilian workforce. As part of this mission, OPM is responsible 

for conducting different levels of background investigations for the 

various types of positions in the Federal Government to ensure the 

individuals meet the Government’s suitability and security clearance requirements. 

At OPM, the division responsible for conducting background investigations is our Federal Investigative Services Division, 

headquartered in Boyers, Pennsylvania. This division supports over 

a hundred Federal agencies with thousands of security offices 

worldwide. Our automated processing systems and vast network of 

field investigators handle a high volume of investigations. In fact, 

we processed over 1.4 million investigations last year. 

OPM currently conducts 90 percent of the background investigations for the Federal Government. The remaining investigations 

are conducted by agencies who assume this responsibility pursuant 

to law or through a delegation approved by the Office of Management and Budget. OPM and DHS share responsibility for the background investigations required by DHS. Under an OMB approved 

delegation, DHS conducts background investigations on specific positions within the agency. For other departments or positions within DHS, OPM conducts various levels of investigation. All levels or 

investigation include searches of national record repositories. The 

minimum level includes letters of inquiry to employers, local police 

departments, schools and personal references to confirm the subject’s background claims and to obtain information on the person’s 

suitability for employment. More extensive investigations are conducted on DHS employees who require Top Secret Security clearances or are in positions of higher risk to Public Trust. These investigations include personal interviews conducted by a field agent 

with the subject of the investigation and personal sources, as well 

as record checks of local police departments and other State or 

local record repositories. OPM conducted over 700 minimum-level 
18

investigations, and over 18,000 extensive investigations for DHS 

for the last fiscal year. 

Investigators are instructed to identify and interview the best 

sources available at each location with extensive knowledge of the 

subject’s background and character. The investigations conducted 

by OPM are designated to identify issues that may raise a concern 

about the subject’s suitability for employment or eligibility for a security clearance. 

The Office of Personnel Management works with agencies to implement the Human Capital Initiative of the President’s Management Agenda. We help agencies align human capital management 

strategies with mission, goals, and organizational objectives and integrate human capital planning into agency strategic and performance plans. 

The Homeland Security Act of 2002 authorized the Secretary of 

Homeland Security and the Director of OPM to develop a new 

human resources management system for the Department, providing specific flexibilities in the areas of pay, performance management, classification, disciplinary matters, labor-management relations and appeals. Flexibilities granted to DHS comprise the largest transformation of civil service regulations in 40 years. 

MAX HR, as the new human resource management system is 

designated, represents a major organizational and cultural change 

for DHS employees, and DHS has invested heavily in training and 

communication. To date, DHS has trained over 7,700 managers 

and supervisors on the new performance management system. The 

training focused on establishing clear performance expectations 

aligned with organizational goals that are cascaded throughout the 

organization; creating a stronger link between performance and 

pay; promoting a continuous learning environment; creating new 

opportunities for leadership development; and enabling the Department to continue to attract the best and brightest, to reduce skills 

gaps in mission-critical occupations, and to sustain and improve diversity. 

OPM will continue to work with DHS and support the Department every step along the way to ensure successful implementation 

of MAX HR. As we do so, we remain ever mindful of our Government-wide responsibility to ensure compliance with merit system 

principles and to hold agencies accountable for their human capital 

practices. That is why our new Strategic Plan calls for OPM to conduct an independent program evaluation of the Department’s new 

HR system with the assessment beginning this fiscal year and extending into fiscal year 2007. 

Mr. Chairman, I would like to note that I am joined this morning 

by Marta Perez, OPM’s Associate Director for Human Capital 

Leadership and Merit Systems Accountability Division who will be 

available to answer any questions the subcommittee may have for 

OPM on human capital issues at DHS. 

That concludes my remarks. I am happy to answer any questions 

you may have. 

[The statement of Ms. Dillaman follows:]
19

PREPARED STATEMENT OF KATHY L. DILLAMAN

Background 

Mr. Chairman and members of the Subcommittee, thank you for the opportunity 

to testify before you today on the services the Office of Personnel Management 

(OPM) provides to the Department of Homeland Security (DHS) in support of their 

personnel security clearance process and the DHS? Human Capital Strategic Plan. 

OPM’s mission is to ensure the Federal Government has an effective civilian 

workforce. As part of this mission OPM is responsible for conducting different levels 

of background investigations for the various types of positions in the Federal Government to ensure the individuals meet the Government’s suitability and security 

clearance requirements. The investigations range from the minimum level of investigation required for low risk public trust positions or positions that require a Confidential or Secret clearance, to extensive field investigations for high risk public 

trust positions or those that require a Top Secret clearance. 

At OPM, the division responsible for conducting background investigations is our 

Federal Investigative Services Division (FISD), headquartered in Boyers, Pennsylvania. This division supports over 100 Federal agencies with thousands of security 

offices worldwide. Its automated processing systems and vast network of field investigators handle a high volume of cases. In fact, we processed over 1.4 million investigations last year. 

Currently, OPM conducts 90% of the background investigations for the Federal 

Government. The remaining investigations are conducted by agencies who assume 

this responsibility pursuant to law or through a delegation approved by the Office 

of Management and Budget (OMB).

Background Investigations for the Department of Homeland Security 

OPM and DHS share responsibility for the background investigations required by 

DHS. Under an OMB approved delegation, DHS conducts background investigations 

on specific positions within the agency. For example, Customs and Border Protection 

and the U.S. Secret Service conduct investigations on positions within their agencies. DHS also conducts investigations that are required by regulation for such positions as airport workers who need access to secure areas of the airport, HAZMAT 

drivers, and, more recently, port workers operating at major U.S. ports. OPM has 

no role in these investigations. 

For other departments or positions within DHS, OPM conducts various levels of 

investigation ranging from the minimum National Agency Checks with Inquiries 

(NACI) investigation to the most extensive field investigation, the Single-Scope 

Background Investigation (SBI). All levels of investigation include searches of national record repositories, such as the national fingerprint-based criminal history 

check through the FBI, a search of the FBI and DoD investigative indexes, review 

of military records, credit checks, birth verification, and a check of immigration and 

naturalization records. The minimum level includes letters of inquiry to employers, 

local police departments, schools, and personal references to confirm the subject’s 

background claims and to obtain information on the person’s suitability for employment. More extensive investigations are conducted on DHS employees who require 

Top Secret security clearances or are in positions of higher risk to Public Trust. 

These investigations include personal interviews conducted by a field agent with the 

subject of the investigation and personal sources at previous employment locations, 

residences and educational institutions. Agents in the field also conduct record 

checks of local police departments and other state or local record repositories. OPM 

conducted approximately 700 minimum level investigations and over 18,000 more 

extensive investigations for DHS so far this fiscal year. 

Investigators are instructed to identify and interview the best sources available 

at each location with extensive knowledge of the subject’s background and character. 

The investigations conducted by OPM routinely identify individuals with unsatisfactory employment records, criminal records, chronic financial problems, drug or alcohol problems, or a history of violent behavior. 

From April 1, 2005, through March 31, 2006, OPM conducted over 72,000 investigations for DHS.

DHS’ Human Capital Strategic Plan 

The Office of Personnel Management works with agencies to implement the 

Human Capital initiative of the President’s Management Agenda. We help agencies 

align human capital management strategies with mission, goals, and organizational 

objectives and integrate human capital planning into agency strategic and performance plans. 
20

DHS’ Human Capital Strategic Plan addresses the Department’s human resource 

management challenges and provides a sound foundation for managing a workforce 

of some 180,000 employees. It also establishes the framework for the Department’s 

human resources modernization effort, known as MAX HR. 

The Homeland Security Act of 2002 authorized the Secretary of Homeland Security and the Director of OPM to develop a new human resources management system for the Department, providing specific flexibilities in the areas of pay, performance management, classification, disciplinary matters, labor-management relations, 

and appeals. Flexibilities granted to DHS comprise the largest transformation of 

civil service regulations in 40 years. 

MAX HR began in early 2003 with the formation of a joint design team comprised 

of agency, OPM, and labor union representatives. A comprehensive two-year design 

and outreach effort culminated in the February 1, 2005, publication of final regulations for the new human resource management system. Since February 2005, detailed implementation plans have been developed for each of the six human capital 

areas. Certain labor relations, adverse actions, and appeals provisions of the MAX 

HR program have been challenged in a lawsuit filed by a consortium of DHS labor 

unions. On August 12, 2005, the U.S. District Court for the District of Columbia enjoined DHS from implementing the labor relations portion of the new regulations, 

as well as a new mitigation standard established by the regulations. The case was 

recently argued on appeal before the U.S. Court of Appeals for the DC Circuit. 

Pay and performance management provisions of the new system are not covered 

by the unions’ lawsuit and continue to move forward. The performance management 

program under MAXHR has been deployed to non-bargaining unit employees in 

headquarters, supervisors and managers in Immigration and Customs Enforcement 

(ICE), and the U.S. Coast Guard. In July of this year, coverage will be expanded 

to supervisors and managers in the Federal Law Enforcement Training Center 

(FLETC). By the fall, supervisors and managers in the Customs and Border Protection and U.S. Citizenship and Immigration Services (USCIS) will be covered as will 

employees in the U.S. Secret Service. Finally, supervisors and managers in the Federal Emergency Management Agency (FEMA) will be covered in spring of 2007. 

MAX HR represents a major organizational and cultural change for DHS employees, and DHS has invested heavily in training and communication. To date, DHS 

has trained over 7,700 managers and supervisors on the new performance management system. The training focuses on: 

• establishing clear performance expectations aligned with organizational goals 

that are cascaded throughout the organization; 

• creating a stronger link between performance and pay; 

• promoting a continuous learning environment; 

• creating new opportunities for leadership development; and 

• enabling the Department to continue to attract the best and brightest, to reduce skills gaps in mission-critical occupations, and to sustain and improve diversity. 

OPM will continue to work with DHS and support the Department every step 

along the way to ensure successful implementation of MAX HR. As we do so, we 

remain ever-mindful of our government-wide responsibility to ensure compliance 

with merit system principles and to hold agencies accountable for their human capital practices. That is why our new Strategic Plan calls for OPM to conduct an independent program evaluation of the Department’s new HR system with the assessment beginning this fiscal year and extending into FY2007. 

Mr. Chairman, this concludes my remarks. I am happy to answer any questions 

you or the members of the Subcommittee may have.

Mr. ROGERS. I want to thank all of you for your statements. 

As was represented earlier in opening statements by me and the 

Ranking Member, this hearing was announced at the request of the 

Ranking Member a couple of months ago. He recognized, as did I, 

that we have a very real problem in DHS with recruitment, retention, and morale, and it is disturbing. That was the purpose for 

this hearing being called. And we would like to—I know he and I 

have talked extensively about this—we would like to keep the focus 

of this hearing on that. Although, as you are all aware, since this 

hearing was scheduled, we have had some really noteworthy examples of security problems in DHS. I have referenced them in my 

opening statement—Doyle case and the Shirlington Limousine 
21

case, and I am sure you will have some questions about that. But 

my threshold area of inquiry has to do with recruitment and retention, particularly at the upper level positions. 

You heard me say some of the positions where we are having 

problems retaining folks. A few others where we have vacancies 

right now are the Undersecretary for Management, the Undersecretary for Science and Technology, the Assistant Secretary for 

Cyber Security, the Chief Financial Officer, the Privacy Officer, the 

Commissioner for Customs and Border Protection, the Assistant 

Secretary for Legislative and Intergovernmental Affairs, and the 

Chief Information Officer in Immigration and Customs Enforcement. 

I read all of your statements. I didn’t see anywhere any answers 

as to why we have this problem. Are we not paying enough? Are 

we working people too hard? Somebody tell me in plain language, 

why it is happening and what we can do I am also on the Armed 

Services Committee and DHS runs a close second to DOD’s ability 

to give bureaucratese. I want to speak plainly about, how we got 

here, and what we do to get out of this situation. And let’s start 

left to right and just hear your thoughts in plain language about 

how we got here and what we can do to get out of this hole. 

Mr. Prillaman. 

Mr. PRILLAMAN. Thank you. 

DHS is a very interesting organization. Before I came back to the 

government, I was a management consultant. I worked with a lot 

of corporations and government agencies and other places, and recruitment and retention in the executive branch is always hard in 

any organization. 

Mr. ROGERS. Why? 

Mr. PRILLAMAN. Well, it is mostly hard if you have an organization in transition; it is hard to attract and keep people in an organization that is going through the kind of disruption that has occurred at DHS because of the amalgamation 3 years ago. As I said 

earlier, we are only 3 years into this. 

What I see, as a relative newcomer of DHS, is a lot of very tired 

people. I think there are rank-and-file employees who were charged 

up. They had high energy. They had their adrenaline pumping. 

After 9/11, they were highly motivated. And they are tired. They 

worked very hard the last 3 years. Janet Hale, the Undersecretary 

of Management, is leaving after 3 difficult years of trying to pull 

that Department together. 

The Department is trying to fill vacancies, and I think we are 

filling them with very talented people. There is a new CFO, David 

Norquist, who is pending confirmation. Ralph Basham, as you 

know, the head of Secret Service, has been selected to be the commissioner of CPB; he is pending confirmation. Dave Paulison, who 

is acting right now as the head of FEMA, is pending confirmation. 

Mr. ROGERS. And I would make the point that that position was 

offered to three people who turned it down before Dave Paulison 

came back and said, I will take it. It is hard to get people to take 

these jobs. Why? Go ahead, I am sorry. 

Mr. PRILLAMAN. Well, it is a very good question. It is a hard organization to work in. DHS has a wonderful mission that I think 

attracts a great many people to come to it. Why I came to DHS is 
22

the mission of the organization, the opportunity to make a difference; I think that is what attracts a lot of people in. But it is 

a hard organization because the infrastructure is not yet complete; 

it is still feeling its way in terms of the amalgamation. 

My sense is that DHS will do much better during the next 3 

years than it has done during the last 3 years. As people are now 

becoming—my sense anyway, again, as a consultant, coming and 

looking at the organization initially, I think people are beginning 

to become stabilized. The organization is beginning to become more 

stable. The bad press that DHS has gotten during the course of the 

last year post-Katrina has not made it a more attractive place for 

many people. 

The kind of people you will get to come to DHS are people who 

want a challenge, that are willing to come in and take on an organization that needs to have significant additional change made. 

People who are maintenance managers won’t be interested because 

it is not comfortable. But if you want people to come in who will 

make a difference who are willing to take a challenge, I think that 

is the kind of talent we are going to find for our positions. 

Mr. ROGERS. I can see my time is expired. 

The Chair now recognizes the Ranking Member, Mr. Meek, for 

any questions he may have. 

Mr. MEEK. Thank you very much, Mr. Chairman. 

And I can tell you, there are a number of issues, Mr. Prillaman, 

that we have to deal with, not only here in this committee. One 

good step is that this committee has moved from a select committee 

in the last Congress to a standing committee, and there was bipartisan support for it to happen. And hopefully, as we educate ourselves as Members of Congress, just not stepping in and out of the 

Department of Homeland Security functions, I think the American 

people will be better served in the borders and everything, the airports, you name it, the mission will become a lot stronger. We 

know that many of you signed up for defending the country. It is 

almost like enlisting and being deployed in some instances. 

But I wanted to ask you a question about MAX HR. As you 

know, in my opening statement—and I am glad the Chairman 

made it abundantly clear that we will have a hearing on some of 

the other issues that are facing the Department of Homeland Security and this Congress, because we have the obligation of oversight 

here, so we have to ask the uncomfortable questions, but hopefully, 

the outcome will bring about some change. 

You said in your statement—I had an opportunity to read all of 

your statements—but Mr. Prillaman, you mentioned, on page 4 and 

page 5, you were talking about the revolution of this MAX HR, and 

I think that it is important. You mention something as it relates 

to training to improve the skills and communications with employees, making assignments and setting performance objectives. And 

you mentioned this Human Capital Council. Can you please elaborate very quickly on who sits on that Human Capital Council? 

Mr. PRILLAMAN. The human capital representatives from all the 

various components around DHS. There are seven human capital 

offices that provide day-to-day services, plus many of the components who don’t have their own human capital office have human 
23

capital representatives. And it is a body of 18 to 20 people there, 

and we meet on a regular basis, at least every 2 weeks. 

Mr. MEEK. I am sorry, because my time is limited, I am going 

to cut in and out, but you will keep up; you are doing good. 

Human capital, 20 representatives, are there any rank-and-file 

folks a part of this council? 

Mr. PRILLAMAN. No, they are not part of the council. 

Mr. MEEK. Okay. I know the Chairman said that he is concerned 

with the managers, and the reason why we can’t keep managers 

is that they feel that they have a lack of training. When I talked 

about the letters—and I know that you are going towards the 

training issue. When I talked about the letters before the hearing—

that I have right here for the perusal of anyone that wants to see 

them—saying thank you for having the hearing because this is a 

major problem, and we are trying to work through a—I would just 

say a human resources issue at the Department of Homeland Security and we don’t have the folks that account for the over a hundred-plus thousand employees at the Department of Homeland Security, and there is a council that is making some decisions and implementing plans on how we are going to build morale, and they 

are not represented there, I think really sets a major problem and 

maybe something the Department wants to look into and re-evaluate because it may be a problem, may be uncomfortable for someone to be sitting there at the table and ask a question saying, well, 

you know, I know we are getting all this training and we have 

7,700 individuals and managers that are trained, but for those of 

us that you are trying to help to keep us on, this is how we feel, 

and this is the reason why this won’t work or this could work better. And I am pretty sure that all the Department folks are willing, 

no matter if they punch in and punch out, they sign in or sign out 

or they come in at 10:30 in the morning—if you know what I am 

talking about—and leave at 4, they all jointly believe in the mission of the Department of Homeland Security. 

So it may be helpful as you look at this MAX HR that I have 

a lot of questions about—the chairman and I serve on Armed Services. I just watched the Department of Defense go through a major 

court issue with their similar program because of the application 

of it and the unfairness of it. So when we talk about attrition, I 

think that we have to talk about the whole management question. 

I want to ask you also another question. You have been on for 

eight months in your capacity; am I correct? 

Mr. PRILLAMAN. Yes. 

Mr. MEEK. Your predecessor, how long? 

Mr. PRILLAMAN. 3 years. 

Mr. MEEK. So from the beginning, you are the second person. 

That is good. I hope you are able to stay to see the implementation 

of the program, maybe not MAX HR—I mean, I have my personal 

opinions about that—but making sure that we cut down on attrition. 

One last question, 7,700 people train, managers, how many of 

those individuals still with the Department? Have you all looked at 

that? Training in MAX HR. 

Mr. PRILLAMAN. I don’t have that exact number, but I would say 

95 percent at least would still be with the Department. 
24

Mr. MEEK. When did the training start? 

Mr. PRILLAMAN. It started last September. 

Mr. MEEK. So it is fairly new. 

Mr. PRILLAMAN. Yes. 

Mr. MEEK. I will wait until the second round of questions. 

Mr. Chairman, thank you, I yield back. 

Mr. ROGERS. Thank you. 

The Chair now recognizes the chairman of the full committee, 

Mr. King, for any questions he may have. 

Mr. KING. Thank you, Chairman Rogers. 

And I will follow with your request that we deal more with the 

practices, procedures, and policies than with actual details of individual cases. But I would like to refer to the Doyle and the 

Shirlington cases, not so much the detail of those cases per se but 

what they say about the Department itself. My concern is that 

there is not a full appreciation of the unique role, of the unique 

mission that the Department of Homeland Security has. For instance, when an employee is screened for a security clearance, unlike the FBI and the CIA, my understanding is that there are no 

polygraph tests given at the Department of Homeland Security. 

And for instance, a man like Doyle who in his previous employment—reports are he was asked to leave because of an experience 

of using pornography in the work site. Now maybe that in and of 

itself would not keep him from getting a subsequent job, but we are 

talking about somebody with a security clearance. It seems to me 

that that is the type of thing that should be looked into with great 

detail, and I am wondering how something like that would not 

have been found. If he had been given a polygraph test, is that 

something that would have come up? Again, because to me primarily, not to address the personal nature or the actual nature of 

what he supposedly did, but given how in his position he could be 

vulnerable to blackmail, susceptible to blackmail, would the FBI or 

CIA have conducted a polygraph? And if they would have done 

that, why doesn’t Homeland Security since you are dealing with 

issues of life and death? 

Similarly with the limousine case, just using that as another example, from what I understand, there were serious problems with 

previous contracts that the company had. The owner of the company has a criminal record, and yet the company is given access 

to driving all but the two highest officials in the Department of 

Homeland Security. So it seems to me there is not enough of an 

appreciation of the unique security demands that should be on employees at the Department of Homeland Security. I mean, not to 

minimize any other Federal employee, but you are talking about a 

Department which is entrusted with preserving the lives of millions of Americans. It seems to me you should have higher standards as far as how you give somebody a clearance, how you give 

them access, whether they are employees or even contractors, 

where you have people with criminal records driving around and 

having access and listening to conversations of high-ranking DHS 

officials. To me, it just, unless you can convince me otherwise, 

shows there is not a real appreciation of just how serious this job 

is and the standards that employees, certainly those given security 
25

clearances, should be held to. And I really would ask any of the 

three of you to try to respond to that. 

Mr. WILLIAMS. Well, briefly, I think discussing contractors, we do 

investigate contractors with staff-like access, and that is access 

similar to what I have or any other employee. That would not include necessarily the owner of a company who may not have any 

real access to DHS or the compound or the people involved. Traditionally— 

Mr. KING. If I could just interrupt you there for a moment, 

please. Even if the owner himself does not have access, if he is a 

criminal, it would, to me, be reflected in the type of people he 

would be hiring and the type of operation he may be running, or 

the type of person who himself could be susceptible to being 

reached by someone who is trying to obtain information. So I would 

ask you, why don’t you look into the background of the owners? 

Mr. WILLIAMS. Traditionally, I don’t think that has been done. I 

don’t know that we do have the authorities to do that—

Mr. KING. Again, if I could interrupt you there. Let’s assume that 

everything you have done up until now has been done by the book. 

Should the book be changed? Should you in the future look into—

and if you need authority, should you ask us to give you that authority? 

Mr. WILLIAMS. I am not sure if there is a real security concern. 

Again, I think everything we do we take a measure of risk and we 

have to decide how far we want to take the security. For instance, 

if J.W. Marriott provides the cafeteria employees at the DHS lunch 

hall, do we have to do background investigations on the board of 

directors? I don’t know. Traditionally that has not been the road 

that we have taken with security. Again, it has pretty much been 

focused on those with access to the specific individuals. 

Mr. KING. Well, if I could just say, as Chairman of the full committee—and I think there is concurrence on both sides of the 

aisle—I think the standards should be raised. To me, there is 

somewhat of a difference between a cafeteria employee and someone who is driving the highest-ranking officials of the Department 

around from meeting to meeting, knowing whom they are meeting 

with, knowing what their agenda is, listening to their conversations 

in the car. That to me is a little different from persons working behind the counter in the cafeteria. And to me, this is not rocket 

science. I mean, cab drivers can probably bring down governments 

if they kept track of what Officials are doing. If you have someone 

who knows the schedules—I mean, if they are told who they are 

driving, where they are driving them to, where and who they are 

going to be meeting with, they hear conversations on the phone—

to me, this is something that should be looked at. And I wouldn’t 

trivialize it by saying, well, traditionally, we haven’t done it. I 

mean, we are talking about, as we see in this case now, this involves kickbacks, gambling, prostitution, and we are talking about 

people who drove highest—all but the two highest-ranking members of the Department around. To me, that is a clear security 

breach. And to me, the fact that it was always done this way in 

the past is no reason it should be done this way in the future. And 

I recommend to the Chairman and the Ranking Member of both 

sides of the aisle that we just take a new perspective and a new 
26

look at what security procedures should be and what security attitudes should be at the Department. 

Mr. ROGERS. I thank the Chairman. 

And I do assure him and everybody today, we are going to have 

a hearing on this Shirlington Limousine case and talk broadly, not 

only about the case, but broadly about our background checks, our 

procurement policies and things that we need to do better, because 

we certainly can do a lot better than what we have seen in recent 

weeks with that case as well as with the Brian Doyle case. 

With that, I am now proud to recognize the Ranking Member of 

the full committee, Mr. Thompson, for any questions he may have. 

Mr. THOMPSON. Thank you very much. 

Mr. Prillaman, I am told that we have seven entities within DHS 

that have their own personnel systems. Is that reasonably correct? 

Mr. PRILLAMAN. Seven entities that have their own personnel offices that provide services. 

Mr. THOMPSON. So in your position how much authority from the 

human capital side do you have over those departments? 

Mr. PRILLAMAN. I have authority to oversee their work in terms 

of evaluating the quality of the work that is done, and I have the 

authority to write policies that could have departmentwide application, but I did not have day-to-day supervision of those departments. We have a dotted line relationship in DHS from the individual human resources office to the CHCO as opposed to a hard 

line. 

Mr. THOMPSON. So those seven agencies do their own thing. 

Mr. PRILLAMAN. They operate pretty independently. 

Mr. THOMPSON. Yet they are within DHS. 

Mr. PRILLAMAN. They are. 

Mr. THOMPSON. I guess the next question is have you recommended change in that? 

Mr. PRILLAMAN. No, I have not. 

Mr. THOMPSON. Do you plan to recommend change in that? You 

have got seven chiefs out there. 

Mr. PRILLAMAN. There are seven chiefs, but not seven unguided 

missiles. The Human Capital Council I mentioned a while ago 

Mr. THOMPSON. We are trying to put an organization together, 

and I can’t see seven different personnel chiefs accountable to no 

one really making the organization as robust as we want. But I appreciate your candor on it. 

Ms. Dillaman, explain to me the limit to which you deal with security clearances or anything and whether or not you contract that 

process out at all. 

Ms. DILLAMAN. Yes, sir. First of all, we provide the background 

investigation, which is one element of the agency’s security clearance process. OPM’s configuration, I have six companies under contract who provide investigative services, plus I have a broad base 

of Federal employees who also provide the same services. In total, 

I have 9,000 resources devoted to the background investigations 

program. 

The Department of Homeland Security would identify the individuals who require a background investigation, and then, depending on whether it was a position where they have a delegation to 

conduct their own or OPM provides the investigative service, the 
27

product is exactly the same. The investigation, if OPM is going to 

conduct it, would be requested by my agency. We would conduct 

the required level, and there are different levels of investigation depending on the level of clearance or access. 

Mr. THOMPSON. Thank you. So if a guy—not a guy, a person had 

a previous sexual problem, as we know, would the contractor have 

pick it up, or would you have picked it up? 

Ms. DILLAMAN. If it were an investigation that included field coverage, an agent would conduct interviews of the individuals who 

had close association with the subject at places of employment, or 

the residence. 

Mr. THOMPSON. If a person were being considered for employment, and your shop would do it or contract it out? 

Ms. DILLAMAN. My shop would do it. I may use a contracted 

agency, but that agent would be reporting to OPM, cleared and 

trained the same as his Federal counterpart. 

Mr. THOMPSON. So the reference that Chairman King made 

about the case we know so much about, how could we miss someone with a history of felonies? 

Ms. DILLAMAN. Sir, with a history of felonies, the law enforcement records checks include a check of the FBI’s criminal base 

records. They also include records checks of State and local law enforcement agencies wherever the subject lived, worked or went to 

school during the coverage period of the investigation. 

I would like to say felonies could not be missed because it is a 

biometric check of the FBI if the record is on file with the FBI. 

With all the investigations OPM conducts, almost 10 percent of the 

background investigations identify a criminal history record on file 

with the FBI for the subject. 

Mr. THOMPSON. So if you identified for the Shirlington Limousine 

contract—or you wouldn’t look at that? 

Ms. DILLAMAN. If we were conducting the background investigation on individuals who were employed under that contract, then 

every investigation we would do would include a fingerprint-based 

criminal history check, and the results would be provided to the adjudicating agency. 

Mr. THOMPSON. Did you do one on the owner of the Shirlington 

Limousine contract? 

Ms. DILLAMAN. I have no idea, sir. 

Mr. THOMPSON. Can you check for the committee to see whether 

or not you did one and report back to us? 

Ms. DILLAMAN. Yes, sir. 

[The information follows:]

Ms. DILLAMAN. Upon further review of our files, we were unable to locate a record 

on Christopher D. Baker, owner of Shirlington Limousine, in our system. It does not 

appear that the Department of Homeland Security requested an investigation of this 

individual.

Mr. THOMPSON. One more question, Mr. Chairman. 

Mr. Williams, I have a very colorful chart—are you the author 

of this chart, or is that Mr. Prillaman—which kind of lists the 

major vacancies within DHS. 

Staff created it. The red indicates major vacancies within DHS, 

and what I am concerned about is the inordinate amount of red associated with major vacancies within DHS. How do you propose to 
28

reduce the number of vacancies within DHS from a human capital 

standpoint? 

Mr. PRILLAMAN. What concerns me, Congressman, in part it 

looks like Secretary Chertoff and Deputy Secretary Jackson’s box 

is red, too, which worries me. 

Mr. THOMPSON. I am glad you asked because the Labor Relations 

Board, as you know, is vacant. The Office of Deputy Secretary, that 

person just resigned May 1, the Homeland Security Operations 

Center person resigned March 2. The Office of Chief Privacy Officer, that person resigned September 28 of last year and was replaced by an acting person who is still acting to this date. And Pam 

Turner, who we already know, head of leg affairs, resigned March 

4th. So it kinds of speaks for itself. We have a lot of people leaving, 

gone, have not been replaced. 

Mr. Chairman, I would like to have unanimous consent to enter 

this document into the record. 

Mr. ROGERS. Without objection, it is admitted. 

Mr. THOMPSON. I yield back. 

Mr. ROGERS. I thank the gentleman. 

The Chair now recognizes the gentleman, my friend from New 

Jersey, who has no accent, as you will all learn shortly, Mr. 

Pascrell. 

Mr. PASCRELL. Even in New Jersey we have an accent. 

Good morning. Thank you for your service to your country. That 

is the good part. 

Let me get into this. I want the rank-and-file members of the Department of Homeland Security to know that we on the committee 

understand their problems, and we are going to work to improve 

upon the issues. 

Having said that, we have not had oversight of the Homeland Security Department until this committee sought to move in that direction, so God knows what went on before this was an act of committee. So you have got a lot of problems. You are doing your best 

to face those problems. 

You have vacancies at the top, you have vacancies at Newark 

Airport, TSA has a problem getting people and keeping people 

there, and this happens all across the country. We have problems 

with some of your contracts. Although we are going to have a separate hearing on Shirlington Limousine, we all know that at this 

point Shirlington Limousine and Transportation, Inc., holds a $21.2 

million contract with the DHS. Its owner Christopher Baker has a 

rap sheet that runs 62 pages long. So, Ms. Dillaman, you would 

have to trip over that. It is very easy to trip over his record, this 

outstanding American citizen. Among the convictions on Baker’s 

record are attempted petty larceny, attempted robbery, possession 

of drug paraphernalia, and receiving stolen property. 

It is completely bewildering to me that anyone who has this kind 

of a rap sheet could ever get a penny from the Department of 

Homeland Security. You would expect to see the contractor possibly 

on a list of excluded parties, meaning that they might be temporarily suspended or even permanently dropped or debarred from 

doing business with the Federal Government. 

Now, we sent a letter to Homeland Security. We sent that letter 

on May 11th, Mr. Chairman, Mr. Ranking Member, and we asked 
29

some questions about this particular company. And I want to point 

out something about the answers that we got because this is serious business, very serious business. If you want us to have oversight and this is the responsibility of the Congress of the United 

States, then we sure as heck better have oversight. So whatever 

happens in DHS that goes wrong and we don’t correct it, we are 

just as responsible. That is my feeling, that is my attitude, and 

nothing less is acceptable. 

We asked a question about would they verify this company that 

was hired; in fact, we pointed specifically to part of the contract 

which was let in April of 04 for $3.8 million. We were concerned 

that this company may not meet the criteria which was established. Your criteria people, for the most part. 

They answered in part that the contract files indicate that upon 

receipt of the proposals, the contract specialist verified the designation of each vendor as being a hub zone vendor. In other words, you 

had to be in a hub zone. You know what a hub zone is, right? 

Something that the administration has been trying to do with. 

But let’s get back to what they said. The contract files indicate 

that upon receipt of the proposals, the contract specialist verified 

the designation of each vendor as being a hub zone vendor. That 

is part of the answer to the first question. 

Then we asked very specifically it is reported that this limousine 

service was the sole bidder. No, they said there were four bidders. 

Four companies responded to the solicitation. Two companies were 

determined to be ineligible for the hub zone. This guy must think 

we are drunk when we read this. 

The question—before they say that they are all okay, this question is saying two companies were determined to be ineligible 

based on their small business status. The third company was 

issued a question requesting a classification on its hub zone small 

business status, which was unclear to its proposed teaming arrangement. 

So now the only company left standing is, slowly I turn, 

Shirlington Limousine. They are the only ones left standing. So 

what we have done is—what we have done is—is by process of 

elimination, never thinking, I guess, to go out for bid again; oh, 

that is something different which we ask local officials to do and 

the State officials. The Federal Government doesn’t have to do 

that; at least they didn’t do that in this case. 

I would like your response, Mr. Williams, since you are the Director of Office of Security, and you have taken a look at these 

things. I was astonished by the responses which obviously are honest to the questions before. What do you think about this? 

Mr. WILLIAMS. As far as the Shirlington Limousine contract, the 

drivers have all had background investigations and passed those 

background investigations. 

Mr. PASCRELL. We heard you say that before. 

Mr. WILLIAMS. Okay. I am not sure—as far as how the procurement went, I have a very limited background in Federal procurement. 

Mr. PASCRELL. It is kind of odd though. If all the people are 

eliminated except one, would you go out to bid again? None of you 

are in the procurement office. 
30

Is that what you would do, Ms. Dillaman? 

Ms. DILLAMAN. Sir, I have no experience in the procurement 

area. 

Mr. PASCRELL. Okay. I would like to ask this question—can I ask 

one more question? 

Mr. ROGERS. Sure. 

Mr. PASCRELL. Because I want to have a second round. We just 

got started here, warmed up. I want to ask this question to Mr. 

Prillaman. I want to know how many private contractors there are 

in the Department of Homeland Security. I want to know how 

many private contractors are employed by the Department of 

Homeland Security. Can you give me that answer? 

Mr. PRILLAMAN. I am sorry to ask a question, but do you mean 

contractors or the actual individuals working at Homeland, the actual individuals? 

Mr. PASCRELL. Well, this is why I am asking the question. There 

is a payroll for the 180-some-odd-thousand people that work for 

you, and then there are contractors, contracts which you let, and 

you choose to go out of the public domain and hire private folks to 

do the job. How many are there, and what is their budget? 

Mr. PRILLAMAN. I don’t have that information, but I can certainly 

get it for you. 

Mr. PASCRELL. Would you please do that? 

Mr. PASCRELL. I would like to make a comparison between the 

private contract payrolls and how much money that adds up to 

compared to what the payroll is of the staff. I want to get back 

eventually to the question about what—low morale, and I thank 

you for your cooperation. 

Mr. Chairman, I would like to come back again for the second 

round. 

Mr. ROGERS. Absolutely. 

I told you he didn’t have an accent. 

The Chair now recognizes the gentlelady from Texas Ms. Jackson-Lee, for any statement she may have. She sounds a lot like me, 

so I know she doesn’t have an accent. 

Ms. JACKSON-LEE. Thank you, Mr. Chairman, very much, and 

thank you for this important hearing. 

One of the crucial roles and responsibilities of this Congress is 

oversight and investigatory responsibilities that serve the American people. I have no regrets in the original premise of this Department. I think Congress did the right thing. I think we responded with dispatch to organize an entity that would be unique 

in its seamless responsibility for securing this Nation and addressing the question of natural disasters. 

But this hearing signals a cry for help. In fact, this red-designed 

graph is an SOS call, and I am delighted that the Chairman and 

the Ranking Member and the Ranking Member of the full committee have highlighted this subcommittee’s responsibility of 

digging into what is going on. 

I would say I had great hopes for the Secretary of this Department. As I recall, he offered recommendations for overhaul and 

change, but we are now in May 2006, and the only change I see 

is the proliferation of red, which is obviously symbolized by this de-
31

sign, but, more importantly, the lack of personnel in strategic responsibilities. 

Now, let me, first of all, thank the employees, because I know 

every day that those who do work for this Department are committed and dedicated because I have seen them on the front lines. 

But let me point to a crisis, in particular to Mr.Prillaman. 

Prillaman, is that correct? 

Mr. PRILLAMAN. Prillaman. 

Ms. JACKSON-LEE. Let me point to one that is really, I think, indicting. You heard the list of executives that are missing out of this 

Department. Let me recite for you the fact that the Office of the 

Chief Medical Officer is also serving as the Under Secretary for 

Science and Technology. The Assistant Secretary for Cyber and 

Telecommunications is vacant. Now, I don’t know whether they 

would have the authority to provide me with information why the 

Federal Government is collecting billions of telephone data of citizens who are innocent of any acts of terrorism, but it would be nice 

to have someone in that position. 

But we are in the midst of a very vocal and vibrant discussion 

on immigration, and lo and behold, one of these is the Immigration 

and Customs Enforcement. An argument that I made over a number of years is that we needed to reenforce the staffing of ICE, we 

needed to add the 15,000 border patrol agents that the 9/11 Commission asked us to do. Of course, Congress has some burden on 

that. 

But can I point you directly to that question, and as I do that, 

let me share this other concern as well. And that would be for 

those who are able to answer that is, of course, as I compliment 

the staff. We are all embarrassed by the performance of FEMA and 

Hurricane Katrina, but we are more embarrassed and more incensed by the waste of taxpayers’ dollars. I don’t think if we began 

to trace a dollar, contractual dollar, that came out of the Department of Homeland Security and tried to find where it wound up in 

it; most of the people in New Orleans might say it wound up in 

a barrel of garbage, because we can’t find the results of the dollars 

that Congress expended and for you to expend to help the people 

in New Orleans. We can’t find where it is. 

So my question is I would like to know this whole issue of delegating a lot of the responsibilities to other Federal agencies, particularly contractual, and as a result millions of scarce Federal dollars were wasted, and the Government did not get the performance 

needed out of its contractors. What are you doing so that we don’t 

have the same kind of fiasco, layering of contractors, and waste of 

taxpayer dollars in light of what happened in Katrina? 

So if you can focus on the landscape that we have, but, more importantly, if you can answer this question of what pointedly are 

you doing with respect to Immigration and Customs where there 

is a high vacancy, and then what are you doing with the failed contractual efforts that we had in Hurricane Katrina? 

Mr. PRILLAMAN. With respect to Immigration and Customs Enforcement, I think this chart may actually be in error. Julie Myers 

is the head of Immigrations and Customs Enforcement, if that is 

the position that we are talking about. 
32

Ms. JACKSON-LEE. We are not talking about that, because I 

didn’t call her name. We are talking about the fact that there are 

a great deal of vacancies in that Department. 

Mr. PRILLAMAN. I apologize. 

Ms. JACKSON-LEE. We are talking about major immigration reform. When we throw to you the reform package that I hope this 

Congress will pass, which will include benefits and border security 

issues that really fall a lot in this area, what are you going to do, 

throw up your hands and say, we have no personnel? I mean, there 

are leadership roles; I know there are funding issues that Congress 

has to deal with, but I am talking about leadership roles. 

Mr. PRILLAMAN. All I can say is the Department is moving as 

quickly as it possibly can to fill positions in all our critical areas, 

including Immigration and Customs Enforcement. Recruitment is 

probably our highest priority right now, recruitment and retention 

of talent across the Department. It takes time. It is an old saw, but 

it takes time to hire people, especially when security clearances are 

required, security background investigations. 

We have thousands of applications. We are screening those applications and hiring people as fast as we possibly can. 

Ms. JACKSON-LEE. If you could indulge me, Mr. Chairman. If you 

can provide this committee a specific report, because we are in the 

middle of immigration on the specific vacancies that you see in that 

area, so that we can be accurate. 

Ms. JACKSON-LEE. I know that Ms. Myers, as I understand, she 

is a recess appointment at this time, but I understand she is there, 

but that is really crucial. Do we have any plans to fix this broken 

contractual relation where taxpayer dollars are wasted. 

Mr. PRILLAMAN. FEMA as a whole is one of the Secretary’s chief 

priorities to retool FEMA and its operations. How it contracts with 

other agencies is an area that I know is of critical, critical interest 

and concern right now. I am not engaged in the contracting process, but I do know that there are people at Homeland Security who 

are focusing 100 percent of their attention on exactly that problem. 

Ms. JACKSON-LEE. Well, I welcome you to convey the interest 

here, and I would welcome a response back through the appropriate persons on that very question. 

Mr. PRILLAMAN. Certainly. 

Ms. JACKSON-LEE. Thank you. I yield back. 

Mr. ROGERS. I thank the gentlelady. 

I want to pick back up where I left off. Mr. Prillaman, I don’t 

want to ask leading questions, I know this is not a courtroom, but 

would you acknowledge that there is a morale problem that is arising out of this problem with retention, particularly in the upperlevel positions, that is filtering down into the ranks of these various agencies? 

Mr. PRILLAMAN. Yes, sir, I think that is true. 

Mr. ROGERS. In your opening statement you made the point that 

you are making progress. Tell me how you measure that progress. 

How can you objectively measure what you say is progress in fighting this morale concern as well as these retention concerns? 

Mr. PRILLAMAN. As we said earlier, there is an old adage that 

most employees join an organization, and they leave managers. As 

I said earlier, a lot of what we are trying to do is get our line man-
33

agers, the people that employees deal with on a day-to-day basis, 

better trained, better able to deal with employee issues and to be 

better managers and supervisors. That is a critical function, and 

we have already trained, I mentioned earlier, 8,000 in the course 

of the last 8 months, and we are going to train 6,000 more in the 

course of the next 7 or months. We will be covering the entire Department with a training program. 

I think employees, many employees, are concerned about vacancies at the top of the organization and they— 

Mr. ROGERS. Do you think that is the primary reason for their 

low morale? That was the gist I got in the briefing document. Do 

you think it is something else? 

Mr. PRILLAMAN. My personal sense is that employees are still 

wrestling with the fact that we are a new organization that was 

put together—it was a hostile takeover, essentially; it was not 

something they voted on. I think a lot of employees are still trying 

to feel their way and understand the new organization. 

Mr. ROGERS. Let me ask Mr. Williams the same question. You 

have been around the block in DHS. What do you think about this 

morale problem, and what can we do to combat it? What are we 

doing? 

Mr. WILLIAMS. I would say it is an organization for the high-performance employee. We have so many challenges. There is a burnout rate. Again, when you have a burn-out rate at the higher levels, it does affect the other levels of the organization when they 

have constant turnover above them. I just think it is going to go 

with the territory though, this building DHS. It is a difficult job, 

and it is not for the weak at heart. 

Mr. ROGERS. So you don’t see changes taking place that are 

measurable at present? 

Mr. WILLIAMS. I think that we are seeing progress because it is 

not as fluid of an organization as it was even 18 months ago. As 

time goes on, we are gaining stability, but we are not there yet. We 

have a way to go. 

Mr. ROGERS. Ms. Dillaman, your thoughts. 

Ms. DILLAMAN. Yes, sir. I am not really familiar with the inner 

workings of the Department of Homeland Security. I provide a 

service to them. But I can tell you with any organization, stabilizing the leadership team and developing the leadership team goes 

a long way to improving the morale of an organization. 

Mr. ROGERS. Let’s talk about that service. Oscar Antonio Ortiz, 

arrested August 4th of 2005, charged with conspiracy to bring in 

illegal aliens, false claims of United States citizenship, false statement in acquisition of a firearm, illegal alien in possession of a firearm, guilty plea January 26, 2006, awaiting citizenship. You all 

conducted the investigation on this gentleman? 

Ms. DILLAMAN. Yes, sir, we did. 

Mr. ROGERS. How did this happen? 

Ms. DILLAMAN. Sir, I am prohibited from discussing the specifics 

of the investigation under the Privacy Act in this forum, but I can 

talk to you in general of how it works. Information is collected on 

an individual. If they claim they were born in this country, independent confirmation is made at the Bureau of Vital Statistics. The 
34

information is gathered and turned over to the Department of 

Homeland Security for adjudication. 

Again, I can’t talk about the specifics of what was found, but I 

personally reviewed this investigation. It was complete, it was thorough, and it was accurate. 

Mr. ROGERS. And it didn’t work. 

Ms. DILLAMAN. I didn’t say that, sir. 

Mr. ROGERS. The facts say that. 

Let me ask, in your investigations are you allowed to inquire 

whether or not people that you are doing background checks are 

U.S. citizens? 

Ms. DILLAMAN. Yes, sir. 

Mr. ROGERS. Do you check them against terrorist watch lists? 

Ms. DILLAMAN. Yes, sir. 

Mr. ROGERS. Same question to you, Mr. Williams. In looking at 

contractors that you are talking about giving approval to be 

brought in as a contractor for DHS, are you allowed to check 

whether or not they are a U.S. citizen? 

Mr. WILLIAMS. Yes, sir. We go through the same process as a 

Federal employee. 

Mr. ROGERS. Same thing with the terrorist watch list. 

Mr. WILLIAMS. That is correct. 

Mr. ROGERS. What about the company? You make that check on 

the business entity, or do you look behind the company to the officers and/or directors of that company? 

Mr. WILLIAMS. No, we are looking at, again, the individual folks 

that will be on that contract working as staff, like as Federal employees, but we aren’t looking into the management structure of 

that company. 

Mr. ROGERS. Most of the contractors that provide services to the 

22 agencies that make up DHS are what we would call small businesses. Granted, from the Federal perspective—those are some 

pretty big contracts, at least in east Alabama we think they are big 

contracts but still, we would view them as small businesses. Virtually all of these small businesses are going to be a corporate entity or LLC or some variation of that. And if you don’t look behind 

that entity to whoever the officers and the directors are, you are 

really not doing a diligent job in security. Would you agree with 

that? 

Mr. WILLIAMS. I think there are a number of circumstances 

where that would be important to do. If that was a requirement of 

the procurement office, we would vet whoever they request be vetted within that corporation. 

Mr. ROGERS. Do you have the legal authority to do that? 

Mr. WILLIAMS. With nonindustrial security contracts—again, I 

am not an attorney, so I think it is a little questionable. I don’t 

know. 

Mr. ROGERS. I am told by the procurement office you do not have 

that legal authority, and I am also told you do not have the legal 

authority to inquire as to whether or not they are a U.S. citizen. 

I am told that the procurement office does not check their names 

against the terrorist watch list. 

I offer this because I go back to the Shirlington contract—and I 

really don’t want to get immersed in this, but I think it is impor-
35

tant in light of Ms. Dillaman’s statement and some of the inferences from this testimony to make this point—we aren’t doing due 

diligence in these contracts. If we don’t look to who the officers and 

directors of some of these small businesses are, then we are setting 

ourselves up to have somebody who is truly a bad guy. It could be 

somebody like the Chairman of the full committee was referencing, 

it could be some organized crime figures who are actually the officers or directors or manipulating them, or it could be the terrorist 

who owns that small business. If we are not checking to see if they 

are a U.S. citizen or checking them against the terrorist watch 

list—it could be Mr. Baker who actually is hiring the drivers, and 

the drivers may pass the background check, but they are working 

for him, and we don’t know what his ulterior motives are. 

I think it is important in looking at our security practices for 

contractors and personnel that we look at being broader in scope 

and more practical in what we research and what we don’t research. It is a new day, and folks, at a minimum, expect DHS to 

be held to a high standard when it comes to the security of its personnel. 

I see my time has expired and now turn to the Ranking Member 

for any additional questions he may have. 

Mr. MEEK. Thank you, Mr. Chairman. I am glad we are able to 

do a second round of questioning. Based on your questioning and 

the responses that I have heard, Mr. Chairman, I think as we go 

through approaching this hearing, that we must have a closed 

hearing with some of the same panelists so we can really get down 

to the nitty-gritty of why we are in the position that we are in now 

with these kinds of things happening, because I can tell you right 

now, in open hearing we may get confused or who is on first and 

who is on second. 

Again, I will take from my good friend Mr. Pascrell from New 

Jersey, we want to thank you for your service to the country, and 

I know it has to be quite uncomfortable to answer these questions 

on behalf of the Department where the ball has obviously been 

dropped. You want to talk about a paper-shaking experience in the 

morning when you pick up the paper or you watch a news story 

day after day, and it is riddled with incompetence at the Department of Homeland Security. That has a lot to do with attrition. 

And we are in this battle to make sure that we work towards 

straightening that all you out, so all of this is constructive. 

I just also want to say that this subcommittee is on record to 

give, Mr. Prillaman, line authority to people like yourself so that 

when you are dealing with other human resources, I am just going 

to say human resources, human capital managers, the seven that 

you deal with, and you have a mission, you have MAX HR—I keep 

saying that, and it is not my work product, but I am going to say 

you have MAX HR to carry out, it is not a decision by committee 

on implementation. I mean, if you have to do it, you have to do it, 

and you have to have oversight to make sure that it is implemented in a way it is supposed to be implemented. 

Of course, we want the Council to be more inclusive, but at the 

same time, when it comes down to it, guess who is at the hearing? 

You. Same thing with the information officer. We passed legislation 
36

just a couple of months ago to give line authority in areas at your 

level. 

So I think it is important that you understand that we are part 

of the solution and not a part of the problem, but we have to ask 

about the problem. We established a record on the issue of human 

capital, and I am resisting from going into the whole contract issue 

because a part of these hearings is developing a record and hopefully moving on to some legislation. Because I can tell you right 

now, Mr. Chairman, members of this committee, I don’t believe 

that the Department has the ability, even though I have a great 

deal of respect for one of the greatest managers that I believe over 

at the Department, Under Secretary Michael Jackson, who I have 

met with several times, I am glad he is still hanging with the Department, but it is hard when you have few people trying to do the 

right thing, and we have managers that are coming in and out, rotating door, they get their security clearance, they go to the private 

sector, they leave. How would you like going to the private sector 

with, on your resume, Department of Homeland Security, leave 

alone FEMA? It is almost like some of us going to an election season this year saying we are part of the 109th Congress, but that 

is another editorial. 

So I am saying that we are in this thing together. And so I think 

it is important that we look at it from the standpoint of establishing the record on this human capital issue. 

I just want to point to a document that I was looking at a little 

earlier. As you know, the rankings, I know that we try to recruit 

individuals from institutions of higher learning, we try to recruit 

individuals from other ranks of the Federal Government, but the 

Partnership for Public Service and Institute for the Study of Public 

Policy Implementation, the School of Public Affairs over at American University has a ranking of who—I mean, where to go, the 

best places to work. It is entitled: The Best Places to Work in the 

Federal Government 2005. It is a ranking from 1 to 30, and The 

Department of Homeland Security is number 29, 46.7 percent rating, only beating out the Small Business Administration. 

I think it is important that we take this very seriously, and I 

want to thank you, Mr. Prillaman, for being brutally obvious of the 

honest, that we do have a problem. So if we have a problem, we 

have to, A, admit it. And we don’t go to Wednesday meetings like 

the AA meetings and say, hi, my name is Gregg; we go to the meetings—we come to this meeting and start to say, maybe, Congressman, we need to do this or do that. 

We don’t want you to make a career decision here today, but we 

want to send a strong message to Department of Homeland Security you have to share the information with us, because eventually 

we are going to get it, and it is going to be on the front doorsteps 

of our constituents’ front door. And then we are going to have to 

be accountable. 

I take from my good friend Mr. Pascrell once again, we are responsible. If you are riding in first class, and we are in coach, if 

the plane is going down, we are going down together. If I can do 

anything about it, which we all can as Americans, let’s do something about it. 
37

I asked the chief procurement officer—we keep uttering her position here today—we met, and we have been trying to work through 

these issues leading up to the hearing to get a better understanding of what we should do, because we have a genuine responsibility to make sure that we see it through—if there are in-house 

documents that will help push us in the right direction and break 

down this attrition. MAX HR may be the thing hanging on the wall 

saying we will do it, or what is the slogan here around the Capitol? 

I am trying to remember; it will come back to me a little later, I 

know, after the hearing. But the whole—we must stick with a philosophy when there is litigation right now within the Department 

of Homeland Security as relates to MAX HR. 

So my question is, before we run out of time, we may get another 

round before votes if we have any additional comments, what is the 

shining example within the Federal Government of MAX HR to 

show that it has worked and that it has been fair across broad application? Because we are asking a number of people, matter of fact 

thousands of people, to carry out practices of goodwill and understanding of MAX HR. 

Mr. PRILLAMAN. The part that most employees find controversial 

are a broadband compensation system and pay for performance. 

One of the best examples out there is the General Accounting Office. David Walker is a strong believer in having employees have 

a clear understanding of what their responsibilities are and where 

they fit in the organization. He has built a compensation system 

where he can reward his best talent, differentiate them from the 

better performers and lesser performers, and motivate people. He 

may have it right. 

Mr. MEEK. Good question, because now my time ran out. How 

big is the General Accounting Office? 

Mr. PRILLAMAN. Relatively small; 3,000 employees perhaps. 

Mr. MEEK. How many people are in MAX HR right now? 

Mr. PRILLAMAN. We have in the performance management part 

of it about 10,000, 12,000 so far. 

Mr. MEEK. So you are now in the front seat of this MAX HR, far 

beyond the numbers of the greatest example that can be pointed 

to, to say that it actually works; am I correct? 

Mr. PRILLAMAN. Yes, sir. 

Mr. MEEK. So I think it is important if we look at this whole attrition issue that we have to look at it from the standpoint of making sure that we have got to get it right. And it is very hard to 

go through the whole guinea pig piece of saying we already have 

a problem that we have admitted, and now we are going to step 

into another possible sinking boat. We have litigation, we have employees that are saying thank you for having a hearing because we 

have issues that are not being addressed that I think may end up 

hurting us more than helping us. 

What do you think—and this is for the panel, and this is my last 

question for this round. What do you think your chances are in 

court that MAX HR will get an injunction like the Department of 

Defense similar program they have as relates to pay for performance? 

Mr. PRILLAMAN. It right now is already enjoined by the district 

court. We are appealing that decision, and there should be a deci-
38

sion by the court of appeals in, I would say, late May, early June, 

maybe late June. 

Mr. MEEK. What do you think are the chances of the Department 

prevailing in that? 

Mr. PRILLAMAN. My official position is, of course, we are going to 

win. My sense is it will be an interesting decision. 

Mr. MEEK. Then we are going to have to come up with another 

program, correct? 

Mr. PRILLAMAN. There might be a need to change direction, yes, 

sir. 

Mr. MEEK. I don’t want to get into I am going to buy my lunch, 

you are going to buy my lunch, but I can tell you right now this 

issue is so serious. I know we are making some fun of it, but there 

are some people that are being affected by the decisions that have 

been made as relates to personnel, and I think it becomes a point 

when folks say that there are things that we can do now, and there 

are things we can do later, things that we can pilot at a small 

number and research to make sure that it is right before we start 

getting into broad application, and this may very well be one of 

those things. 

Again, we don’t want to micromanage, but we are the oversight 

committee for management and oversight, and I think that it is an 

integration, and it is important that we have an ongoing conversation about some of these issues. So my questions and my statements were along the line of building the record so that hopefully 

we can get to the bottom of trying to do what we can. This is preventive maintenance, not a one-fix thing to deal with our HR issues 

at the Department. I will leave it at that. 

Does anyone else on the panel have anything to say to address 

any of my questions? 

Mr. WILLIAMS. No, sir. 

Mr. MEEK. Good. With that, Mr. Chairman, I will yield back the 

balance of my time that I have already gone over. 

Mr. ROGERS. I thank the gentleman. 

The Chair now recognizes the gentleman from Mississippi, the 

Ranking Member of the full committee, for any questions he may 

have. 

Mr. THOMPSON. Thank you very much, Mr. Chairman. 

Mr. Prillaman, my staff made a request of some information relative to vacancies and what have you, and to some degree you provided it, but there are some additional items that I need, and it is 

around training cost of officers and a number of things. 

Mr. Chairman, if you remember, from time to time we have been 

given some astronomical numbers for which we find hard to believe 

for training many of the people. Can I get assurance from you that 

we can get that information as to the training cost associated with 

our law enforcement people? 

Mr. PRILLAMAN. Yes, sir. 

Mr. THOMPSON. The Chairman also indicated, in a timely manner. 

We have the seven personnel systems. We have already talked 

about that. Now your shop is in the management section; am I correct? 

Mr. PRILLAMAN. Yes, sir. 
39

Mr. THOMPSON. So now as of today who do you report to? 

Mr. PRILLAMAN. The Under Secretary for Management. 

Mr. THOMPSON. That is who? 

Mr. PRILLAMAN. It would be Janet Hale. 

Mr. THOMPSON. Now, you know she has resigned? 

Mr. PRILLAMAN. Yes, sir. 

Mr. THOMPSON. All right. Effective May 1. 

Mr. PRILLAMAN. She actually has remained with the Department. 

I think her effective date of separation now will be this coming 

Sunday. 

Mr. THOMPSON. Okay. Maybe she changed it. 

Mr. PRILLAMAN. She did. 

Mr. THOMPSON. What I am getting at is this committee’s continuing concern about so many vacancies in so many critical positions, and you are charged with trying to make the system work. 

It is utterly impossible, in some of our minds, that you can ever 

elevate morale with what is going on around you. You have my 

sympathies. It is a difficult task, but also we have to somehow help 

fix it. 

I am not sure if MAX HR created this dilemma. A lot of people 

say that created it, but we really need a system that works. I accept the notion that it takes 5 to 7 years to get it right, but to some 

degree some of the missteps along the way, there should be systems in place for those things not to happen. 

I look forward to working with you and doing whatever. Mr. 

Chairman. As you know, we are going to, based on what the Chairman of the full committee said, take up a full authorizing piece of 

legislation, and I think some of this we can try to fix within that 

legislation, but we have to absolutely do something. 

My district was touched by Hurricane Katrina, and when I see 

73 percent, only 73 percent, of the employees in FEMA on board 

this close to hurricane season, I am concerned. When I see the 

number of complaints filed by employees in terms of grievances and 

personnel actions, that tells me we have a problem. 

So, Mr. Chairman, in the interest of time, and wanting to get to 

the second panel, I have the commitment to get the training cost 

information that we did not get with our initial request. And with 

that, I will yield back. 

Mr. ROGERS. I thank the gentleman. 

I also would like to reemphasize to the panelists and the panel 

that follows what the Ranking Member says is exactly accurate. 

We want to be partners in this process. As I said in my opening 

statement, we intend to be vigorous in our oversight activities, but 

we are doing it because we are trying to glean from you all what 

we can do to try to help. We want to see this Department become 

very successful. We want to see these retention problems eliminated and recruitment problems resolved, but we need to know 

what we can do to help you. In addition to shedding light on this 

problem and holding you to a higher standard, we want to be held 

to a higher standard. So, we ask you to at all times share with us 

what you see as far as policy changes we can make that would facilitate your dealing with these problems. 

With that, we will recognize the gentleman from New Jersey for 

any additional questions he may have. 
40

Mr. PASCRELL. Thank you, Mr. Chairman. 

I would like to ask Director Williams a question. I thought it was 

revealing testimony, Mr. Chairman, when you were asking—Members were asking questions about morale within the Department, 

and I listened very carefully to what Mr. Williams had to say. People finding their way, kind of. But if you look at the Federal human 

capital survey, which was conducted by the Office of Personnel 

Management, a majority—they found a majority of the DHS employees participated did not answer favorably when asked about 

promotions based on merit. 

Mr. Williams, do you promote people based on merit? 

Mr. WILLIAMS. Yes, we do merit-based promotions. 

Mr. PASCRELL. So, in other words, these folks, the majority of 

whom say that you don’t, they are mistaken. Your employees are 

mistaken? 

Mr. WILLIAMS. I don’t know that they are mistaken, and again, 

I don’t have all the details of the survey. I can only be anecdotal 

based on the experience within my office. 

Mr. PASCRELL. They also say that personnel empowerment with 

respect to work, that there is no empowerment in the job responsibilities that they have. Do you agree with that? 

Mr. WILLIAMS. Again, I would like to think that I do empower 

the employees within my office to get the job done. 

Mr. PASCRELL. They say in response to fairness and performance 

appraisals, they don’t find fairness in those appraisals. They are 

mistaken there also? 

Mr. WILLIAMS. The performance appraisal systems that we have 

used up to date I think have minimal impact. I don’t know that 

they give you the full picture of the employees. I, for one, was looking forward to MAX HR to have more of an opportunity to fully assess someone. The assessments used prior to that are nominal. It 

is not a very in-depth assessment of their abilities. 

Mr. PASCRELL. Looking at your employees are responding and listening to what you are saying, there is kind of a disconnect here, 

and I think it is worth looking at and addressing. I would make 

that recommendation. We haven’t even heard from employees yet. 

I would like to ask another question, Mr. Williams. Do you believe that an overreliance on contractors leads to ineffective due 

diligence on the part of the Department of Homeland Security? 

What point are you overrelying upon—relying too much on contractors rather than internal personnel? And do you see that as a problem. 

Mr. WILLIAMS. In my office it has not been a problem. My office 

is almost a 50–50 split between contractual staffs and Federal employees. I think a lot of it was developed in the way Homeland Security was evolved and a high reliance on contractor staff. Over 

time I think the percentage is shifting to more of a Federal workforce as opposed to contractual workforce, but, quite frankly, in my 

office I think I would have a difficult time telling who are the Feds 

and who are the contractors. We work pretty much hand in hand. 

Mr. PASCRELL. Do you think that contributes to more stability if 

you can rely on your employees day to day rather than moving out 

to private contractors outside the recommendation of the Federal 

Government? 
41

Mr. WILLIAMS. I think we have a higher degree of a stability 

among the employers in the contractual. 

Mr. PASCRELL. Why? 

Mr. WILLIAMS. I think it probably has to do with, in fact, a lot 

of the contractual staff, a number of them eventually become Federal employees, and I think it has to do with benefits. Then you 

have others that their interests are more job-specific, and they are 

more willing to move for increased benefits. 

Mr. PASCRELL. Thank you. 

Mr. Prillaman, I would like to ask you one question. Hurricane 

Katrina was a catastrophe on many levels. For our purpose I would 

like to talk about the lessons it taught us, taught the Department, 

Department capabilities to execute its procurement program and 

management responsibilities. The Department of Homeland Security pretty much threw up its arms and delegated much of the responsibility, as we have learned, to other Federal agencies during 

that catastrophe. As a result, millions of scarce Federal dollars 

were wasted, and the Government did not get the performance that 

it needed out of its contractors. 

What are you doing to create and maintain a competent procurement shop in the Department? Because that is going to be part of 

the discussions that we have next week. This will be my final question. 

Mr. PRILLAMAN. The procurement is recognized as a serious problem within Homeland Security, and we have established at FEMA 

alone more than 19 new positions for procurement specialists and 

are filling those positions as fast as possible. It is hard to find procurement specialists, quite frankly, around the Washington community, but we are trying to fill those as fast as possible. Across 

the Department’s procurement office, including the main office in 

the Bureau of Management where I work, I know they are providing considerable more oversight to the procurement officers located in the various components. 

Mr. PASCRELL. Just how serious is the problem? Just how serious 

is the procurement problem? 

Mr. PRILLAMAN. Finding qualified procurement talent is a problem governmentwide. I think OPM could speak to that. And we are 

in the same boat that many other agencies are. 

Mr. PASCRELL. Mr. Chairman, through the Chair I want to ask 

this question and all of us to be on board on this question. I am 

going to ask a question, and if it is out of order, tell me it is out 

of order, through the Chair, to Mr. Prillaman. I want to know out of every $50—you have taken a review since 

you have been there for 1 year? 

Mr. PRILLAMAN. Eight months. 

Mr. PASCRELL. Eight months, I am sorry. You have taken a review of contracts, taken a look at them? I am going to make a 

statement; you tell me whether I am using hyperbole, or whether 

it is pretty accurate in terms of what you are found. I have not 

done a universal check. I would say out of every $5 spent, $2 is 

wasted. Is that, in your estimation, an exaggeration? 

Mr. PRILLAMAN. It is going to sound evasive, but I honestly have 

not made that kind of a study. 

Mr. PASCRELL. Thank you, Mr. Chairman. 
42

Mr. ROGERS. I thank the gentleman. 

We are about to be called for a series of votes. I want to ask one 

more question, not a series. I do want to follow up on the question 

I had of Ms. Dillaman about Mr. Ortiz and ask you, Mr. Williams, 

do you feel like the ball was dropped when it was handed off to 

you? 

Mr. WILLIAMS. I would have to look further into that particular 

case. I don’t think it was a DHS headquarters case. Again, we have 

seven or eight individuals, security officers, and I have to examine 

the case within those offices. 

Mr. ROGERS. I would ask you after the hearing to submit for the 

record your thoughts on where the ball was dropped with regard 

to that specific case. 

Mr. ROGERS. With that, what I would point out to the witnesses 

is that one of my many failings is I don’t do what my staff tell me 

to do enough. I am sure that my colleagues on the other side probably suffer from the same problem, in that the staff gives me a series of questions they really want me to ask for the record, and I 

always wind up going down my own little pig trail of questions that 

never include theirs. 

So I would remind you that for the next 10 days the record will 

be left open. If any of the Members suffer from the same problem 

I suffer from and didn’t get the questions they really need to have 

asked for the record, I ask that when you receive these questions 

from us, respond in writing within 10 days so we can get those memorialized for the record. 

Mr. ROGERS. There being no further questions, this panel is excused. Thank you for being here. 

Mr. ROGERS. I would like to call up the second panel now. 

This panel will consist of John Gage, National President of the 

American Federation of Government Employees; Colleen Kelley, 

President, National Treasury Employees Union; and Professor 

Charles Tiefer, Professor of Law at the University of Baltimore 

School of Law. 

Thank you for being with us. Please be seated. 

What we would like to do, given that we know that we are going 

to be called for votes pretty soon, is to try to get in your opening 

statements before we have to recess briefly. So the Chair now calls 

Ms. Colleen Kelley, President of the National Treasury Employees 

Union, for any statement you may have. And again, I remind you 

to try to keep your statement within 5 minutes because your full 

statement will be submitted for the record so you don’t have to 

offer the whole thing, unless you just want to. 

Ms. Kelley. 

STATEMENT OF COLLEEN M. KELLEY 

Ms. KELLEY. Thank you very much, Chairman Rogers, Ranking 

Member Meek. I appreciate the opportunity to testify on human 

capital issues at the Department of Homeland Security. 

NTEU represents over 150,000 Federal employees, and 15,000 of 

those employees work for Customs and Border Protection in Homeland Security. 

The Homeland Security Act that created the Department required that any new human resource management system would 
43

ensure that employees could organize, bargain collectively and participate through labor organizations of their own choosing in decisions that affect them. Because the final personnel regulations 

failed to meet these statutory requirements, NTEU challenged 

those regulations in court. 

Last August the Federal district court ruled that the regulations 

did not provide for collective bargaining or fair treatment of the 

employees as required by the act, and DHS, as we heard, has appealed that decision. 

Despite the court’s injunction, the President’s 2007 budget request has more money requested for designing and implementing 

Homeland Security’s proposed personnel system, MAX HR, than it 

does for frontline, port and border security personnel and for trade 

facilitation employees. The President’s request is $32 million to increase for frontline po- sitions at the 317 ports of entry, but he has asked for $42 million 

for implementation of MAX HR. Now, NTEU is very gratified that 

House appropriators, at NTEU’s urging, has rejected this new 

funding request for MAX HR. 

NTEU had a preview of what the proposed MAX HR pay-for-performance system would look like when Customs and Border Protection unilaterally eliminated the union-management-administered 

performance award system this past year. The prior performance 

award program was a transparent committee process with labor 

and management represented, and every award and every reason 

for the award was made public. Under the system that CBP management has now unilaterally implemented, decisions were made 

behind closed doors, and those receiving awards and the reasons 

for the awards were to be kept secret. NTEU objected, and an arbitrator ruled in our favor, ordering the performance awards program 

to be redone in an open and transparent manner. Homeland Security has appealed that arbitrator’s decision. 

Another area of concern for Customs and Border Protection officers is the One Face at the Border initiative, which was designed 

to eliminate the separation of immigration, customs and agriculture functions at the ports of entry. Congress must ensure that 

expertise is retained with respect to these functions. The One Face 

at the Border initiative does not do that, and thereby it jeopardizes 

our national security. In addition, air, land and seaports are woefully understaffed. 

The Senate has proposed adding at least 2,500 Customs and Border Protection officers in an immigration bill being debated this 

week. While the House called for the addition of 1,200 new CBP 

officers over 6 years in both the safe ports bill and its border security and immigration bill, that number is far short of what is needed. And CBP officers carry weapons, and at least three times a 

year they must qualify and maintain proficiency on a firearm 

range. CBP officers have the authority to apprehend and to detain 

those who are engaged in smuggling drugs and violating other civil 

and criminal laws, yet they have been denied law enforcement status and benefits. 

NTEU strongly supports H.R. 1002, the bipartisan Law Enforcement Officers Equity Act, that has 151 cosponsors including Homeland Security Committee chair Peter King, and full committee and 
44

subcommittee Ranking Members Bennie Thompson and Kendrick 

Meek. This legislation would treat CBP officers as law enforcement 

officers and provide them with a 20-year retirement benefit, long 

overdue for these employees who perform critical law enforcement 

duties every day. 

CBP employees are loyal and dedicated, but they are extremely 

disturbed by the agency’s recent misuse of national and internal security arguments to justify actions that have no security implications, while they are ignoring real threats to our national security. 

This issue was dramatically highlighted when it became known 

that CBP had to raise no security questions about the United Arab 

Emirates-owned Dubai Ports World buying port facilities in the 

United States. Yet the list of actions that CBP has raised security 

concerns about with regard to its employees is long, and it is ridiculous. 

For example, CBP claimed that wearing uniforms with shorts 

threatens security. The Federal Services Impasses Panel found no 

security issue. CBP also outlawed beards and implemented strict 

restrictions on hairstyles, claiming security needs. An arbitrator 

found no merit to this argument. CBP discontinued a practice of allowing pregnant officers to use shoulder holsters rather than waist 

holsters, claiming security concerns. Unfortunately, this needless 

and discriminatory policy has been upheld. These are just a few examples of how CBP continues to misuse security considerations to 

try to justify the unjustifiable. 

It is particularly disturbing to CBP employees that security concerns are falsely raised on these types of minor issues, yet issues 

with real security implications like the Dubai Ports issue and the 

lack of staffing go unquestioned by CBP. 

I look forward to continuing to work with this committee to help 

the Department of Homeland Security to meet its critical missions, 

and I would be happy to answer any questions that you have. 

Thank you. 

Mr. ROGERS. Thank you, Ms. Kelley. 

[The statement of Ms. Kelley follows:]

PREPARED STATEMENT OF COLLEEN M. KELLEY

Chairman Rogers, Ranking Member Meek, I would like to thank the subcommittee for the opportunity to testify on human capital issues at the Department 

of Homeland Security (DHS). 

As President of the National Treasury Employees Union (NTEU), I have the 

honor of representing over 150,000 federal employees, 15,000 of whom are Customs 

and Border Protection (CBP) employees at the Department of Homeland Security. 

I am also pleased to have served as the representative of NTEU on the DHS Senior 

Review Committee (SRC) that was tasked with presenting to then-DHS Secretary 

Tom Ridge and then-OPM Director Kay Coles James, options for a new human resources (HR) system for all DHS employees. NTEU was also a part of the statutorily 

mandated ‘‘meet and confer’’ process with DHS and OPM from June through August 

2004. 

It was unfortunate that after two years of ‘‘collaborating’’ with DHS and OPM on 

a new personnel system for DHS employees that NTEU was unable to support the 

final regulations. While some positive changes were made because of the collaboration between the federal employee representatives and DHS and OPM during the 

meet and confer process, NTEU was extremely disappointed that the final regulations fell woefully short on a number of the Homeland Security Act’s (HSA) statutory mandates. The most important being the mandates that DHS employees may, 

‘‘organize, bargain collectively, and participate through labor organizations of their 

own choosing in decisions which affect them,’’ (5 U.S.C. 9701(b)(4)) as well as the 
45

mandate that any changes to the current adverse action procedures must ‘‘further 

the fair, efficient and expeditious resolutions of matters involving the employees of 

the Department.’’ (5 U.S.C. 9701(f)(2)(C)). 

Because the final personnel regulations failed to meet the statutory requirements 

of the HSA in the areas of collective bargaining, due process and appeal rights, 

NTEU, along with other federal employee unions, filed a lawsuit in Federal court. 

On August 12, 2005, the federal district court ruled the labor-management relations 

and appeals portions of the DHS final personnel regulations illegal and enjoined 

their implementation by DHS. The court found that the regulations did not provide 

for collective bargaining or fair treatment of employees as required by the Act. DHS 

appealed the district court’s decision to the U.S. Court of Appeals for the District 

of Columbia Circuit. Oral arguments were heard by the appeals court on April 6, 

2006. If NTEU’s challenge is sustained, as we expect, DHS will be required to rewrite the regulations to conform to law. If not, Congress should act to ensure that 

DHS complies with its clear directives regarding collective bargaining, due process 

and appeal rights. 

As the subcommittee is aware, the HSA allowed the DHS Secretary and the OPM 

Director to make changes in certain sections of Title 5 that have governed the employment rights of federal employees for over 20 years. In the first part of my testimony, I will focus my comments on three areas of the final personnel regulations 

that fell short of protecting federal employees’ rights: labor relations/collective bargaining, due process rights, and the pay for performance system.

DHS PERSONNEL REGULATIONS ISSUES 

The Homeland Security Act requires that any new human resource management 

system ‘‘ensure that employees may organize, bargain collectively, and participate 

through labor organizations of their own choosing in decisions which affect them.’’ 

NTEU believes that the final regulations do not meet this statutory requirement in 

the following ways.

Labor Relations/Collective Bargaining 

Under the final personnel regulations, the responsibility for deciding collective 

bargaining disputes will lie with a three-member DHS Labor Relations Board appointed by the Secretary of the Department of Homeland Security. Senate confirmation will not be required, nor is political diversity required among the Board members. Currently, throughout the federal government, collective bargaining disputes 

are decided by the Federal Labor Relations Authority (FLRA), an independent body 

appointed by the President and confirmed by the Senate. A true system of collective 

bargaining demands independent third party determination of disputes. The final 

regulations do not provide for that, instead creating an internal system in which 

people appointed by the Secretary will be charged with deciding matters directly impacting the Secretary’s actions. The district court ruled this section of the regulations illegal. 

Under the final regulations, not only will management rights associated with 

operational matters (subjects that include deployment of personnel, assignment of 

work, and the use of technology) be non-negotiable, but even the impact and implementation of most management actions will be non-negotiable. In other words, employee representatives will no longer be able to bargain on behalf of employees concerning the procedures that will be followed when DHS management changes basic 

conditions of work, such as employees’ rotation between different shifts or posts of 

duty, or scheduling of days off. 

The final regulations further reduce DHS’ obligation to collectively bargain over 

the already narrow scope of negotiable matters by making department-wide regulations non-negotiable. Bargaining is currently precluded only over government-wide 

regulations and agency regulations for which a ‘‘compelling need’’ exists. The new 

DHS personnel system would also allow management to void existing collective bargaining agreements, and render matters non-negotiable, simply by issuing a department-wide regulation. The district court ruled this section of the regulations illegal. 

A real life example of the adverse effect of the negotiability limitations on both 

employees and the agency will be in the area of determining work shifts. Currently, 

the agency has the ability to determine what the shift hours will be at a particular 

port of entry, the number of people on the shift, and the job qualifications of the 

personnel on that shift. The union representing the employees has the ability to negotiate with the agency, once the shift specifications are determined, as to which 

eligible employees will work which shift. This can be determined by such criteria 

as seniority, expertise, volunteers, or a number of other factors. 

CBP Officers around the country have overwhelmingly supported this method for 

determining their work schedules for a number of reasons. One, it provides employees with a transparent and credible system for determining how they will be chosen 
46

for a shift. They may not like management’s decision that they have to work the 

midnight shift but the process is credible and both sides can agree to its implementation. Two, it takes into consideration lifestyle issues of individual officers, such as 

single parents with day care needs, employees taking care of sick family members 

or officers who prefer to work night shifts. The new personnel system’s elimination 

of employee input into this type of routine workplace decision-making has had a 

negative impact on morale.

Due Process and Appeal Rights 

One of the core statutory underpinnings of the HSA was Congress’ determination 

that DHS employees be afforded due process and that they are treated in a fair 

manner in appeals they bring before the agency. In fact, the HSA clearly states that 

the DHS Secretary and OPM Director may modify the current appeals procedures 

of Title 5, Chapter 77, only in order to, ‘‘further the fair, efficient, and expeditious 

resolution of matters involving the employees of the Department.’’ (5U.S.C. 9701 (f) 

(2) (C)). Instead the final regulations undermine this statutory provision in a number of ways. 

The final regulations undercut the fairness of the appeals process for DHS employees by eliminating the Merit Systems Protection Board’s (MSPB) current authority to modify agency-imposed penalties. The result is that DHS employees will 

no longer be able to challenge the reasonableness of penalties imposed against them, 

and the MSPB will now only be authorized to modify agency-imposed penalties 

under very limited circumstances where the penalty is ‘‘wholly unjustified,’’ a standard that will be virtually impossible for DHS employees to meet. 

The final regulations exceed the authority given in the HSA to the Secretary and 

OPM Director, by giving the Federal Labor Relations Authority (FLRA) and the 

MSPB new duties and rules of operation not set by statute. The FLRA and the 

MSPB are independent agencies, and DHS and OPM are not authorized to impose 

obligations on either independent agency, or dictate how they will exercise their jurisdiction over collective bargaining and other personnel matters. 

In the final regulations, the FLRA is assigned new duties to act as an adjudicator 

of disputes that arise under the new labor relations system and the regulations also 

dictate which disputes the FLRA will address and how they will address them. 

In addition, the final regulations conscript the Merit System Protection Board as 

an appellate body to review, on a deferential basis, findings of the new Mandatory 

Removal Panel (MRP). Chapter 12 of Title 5, which sets out MSPB’s jurisdiction, 

does not authorize this kind of action by the Board and the DHS Secretary and 

OPM Director are not empowered to authorize it through regulation. A similar appellate role is given to the FLRA. It is tasked with reviewing decisions of the Homeland Security Labor Relations Board (HSLRB) on a deferential basis. There is no 

authority for assigning such a role to the FLRA and the district court has ruled 

these provisions illegal. 

The final regulations also provide the Secretary with unfettered discretion to create a list of Mandatory Removal Offenses (MRO) that will only be appealable on 

the merits to an internal DHS Mandatory Removal Panel (MRP) appointed by the 

Secretary. 

The final regulations include a preliminary list of seven potential mandatory removal offenses but are not the exclusive list of offenses. The final regulations also 

provide that the Secretary can add or subtract MRO’s by the use of the Department’s implementing directive mechanism and that the Secretary has the sole, exclusive, and unreviewable discretion to mitigate a removal penalty. 

By going far beyond the statutory parameters of the HSA, and drastically altering 

the collective bargaining, due process and appeal rights of DHS personnel, the district court ruled these sections of the proposed regulations illegal. The overreaching 

by DHS in formulating these personnel regulation and the subsequent court ruling 

leaves CBP employees with little or no confidence that they will be treated fairly 

by the agency with respect to labor-management relations, appeals or pay by the 

department. 

MaxHR Pay-for-Performance Proposal 

While not a part of the lawsuit filed by NTEU and other federal employee representatives, the final regulations as they relate to changes in the current pay, performance and classification systems of DHS employees must be brought to the attention of this subcommittee. While the final regulations lay out the general concepts of a new pay system, they remain woefully short on details. 

Too many of the key features of the new system have yet to be determined. The 

final regulations make clear that the agency will be fleshing out the system’s details 

in management-issued implementing directives while using an expensive outside 

contractor that will cost the agency tens of millions of dollars that could be used 
47

for additional front line personnel. Among the important features yet to be determined by the agency are the grouping of jobs into occupational clusters, the establishment of pay bands for each cluster, the establishment of how market surveys 

will be used to set pay bands, how locality pay will be set for each locality and occupation, and how different rates of performance-based pay will be determined for the 

varying levels of performance. 

And, much to the consternation of short staffed frontline CBP employees, the 

President’s FY 2007 Budget requests an additional $41.7 million for implementation 

of MaxHR. This request is a 133% increase from $29.7 million in FY 2006 to $71.4 

million in FY 2007 including $15 million for establishment of pay pools; $22 million 

in implementation and operational costs; and $4.75 million to fund the Homeland 

Security Labor Relations Board, the creation of which the District Court ruling has 

enjoined. The President’s budget funds an additional 16 FTEs to administer 

MaxHR. In contrast, the FY 07 budget request for salaries and expenses for Border 

Security, Inspection and Trade Facilitation at the understaffed 317 Ports of Entry 

(POEs) is $32 million—adding only 21 FTEs. 

NTEU is especially mindful of the fact that the more radical the change, the 

greater the potential for disruption and loss of mission focus, at a time when the 

country can ill-afford DHS and its employees being distracted from protecting the 

security of our homeland. However, before any changes are made to tie employees’ 

pay to performance ratings, DHS must come up with a fair and effective performance system. 

CBP employees got a preview this past winter as to how DHS will administer a 

new pay-for-performance program when it unlawfully terminated the negotiated 

Awards and Recognition procedures and unilaterally imposed its own awards system. At the conclusion of the FY 2005 awards process, CBP, contrary to the parties’ 

seven year practice of publicizing the names and accomplishments of award recipients as determined by a joint union-management committee, embarked on a policy 

of refusing to reveal the results of its awards decisions, the amount of the awards, 

and the accomplishments that resulted in the granting of the award so that employees in the future could emulate these accomplishments and too win an award. 

Not only were the unilaterally decided award results not publicized, but NTEU 

Chapters report that some employees were specifically told not to reveal that they 

had received an award. CBP has refused to provide NTEU at the national level with 

the results of its awards decisions. NTEU has informed DHS that CBP’s strenuous 

efforts to hide its awards decisions make a mockery of DHS’s promise that any payfor-performance system it implements will be transparent and trusted by its employees. 

NTEU has received a favorable arbitration decision concluding that CBP unlawfully terminated the joint union-management Awards and Recognition program and 

unilaterally imposed its own awards system. The arbitrator ordered CBP to return 

to the prior joint awards process and to rerun the fiscal year 2005 awards process 

using the negotiated procedure. CBP has delayed the ultimate resolution of this 

issue by appealing the arbitrator’s decision to the FLRA asking the Authority to 

overturn the arbitrator’s decision ‘‘in order to improve employee morale.’’ 

The disarray in the formulation of the new pay-for-performance program at DHS 

continues. DHS was slated to move headquarters, Information Analysis and Infrastructure Protection, Science and Technology, Emergency Preparedness and Response and Federal Law Enforcement Training Center employees into the MaxHR 

pay-for-performance system by February 2006, but has delayed this move until January 2007. MaxHR initial pay changes have been bumped from January 2007 to 

January 2008. 

The proposed pay system lacks the transparency and objectivity of the General 

Schedule. If the proposed system is implemented, employees will have no basis to 

accurately predict their salaries from year to year. They will have no way of knowing how much of an annual increase they will receive, or whether they will receive 

any annual increase at all, despite having met or exceeded all performance expectations identified by the Department. The ‘‘pay-for-performance’’ element of the proposal will pit employees against each other for performance-based increases. Making 

DHS employees compete against each other for pay increases will undermine the 

spirit of cooperation and teamwork needed to keep our country safe from terrorists, 

smugglers, and others who wish to do America harm. 

One thing is clear. The proposed pay system will be extremely complex and costly 

to administer. A new bureaucracy will have to be created, and it will be dedicated 

to making the myriad, and yet-to-be identified, pay-related decisions that the new 

system would require.
48

IMPEDIMENTS TO MISSION ACCOMPLISHMENT 

The second part of my testimony addresses DHS staffing and personnel policies 

that have deleteriously affected CBP employee morale and threaten the agency’s 

ability to successfully meet its critical missions.

OPM Survey Results 

A recent OPM survey of federal employees revealed that employees rated DHS 

29th out of 30 agencies considered as a good place to work. On key areas covered 

by the survey, employees’ attitudes in most categories were less positive and more 

negative than those registered by employees in other federal agencies. Employee answers on specific questions revealed that 44% of DHS employees believe their supervisors are doing a fair to a very poor job; less than 20% believe that personnel decisions are based on merit; only 28% are satisfied with the practices and policies of 

senior leaders; 29% believe grievances are resolved fairly; 27% would not recommend DHS as a place to work; 62% believe DHS is an average or below average 

place to work; only 33% believe that arbitrary action, favoritism, and partisan political action are not tolerated; over 40% are not satisfied with their involvement in 

decisions that affect their work; 52% do not feel that promotions are based on merit; 

and over 50% believe their leaders do not generate high levels of motivation and 

commitment. On the other hand, most employees feel there is a sense of cooperation 

among their coworkers to get the job done. 

The results of this OPM survey raise serious questions about the department’s 

ability to recruit and retain the top notch personnel necessary to accomplish the 

critical missions that keep our country safe. According to OPM, 44 percent of all federal workers and 42 percent of non-supervisory workers will become eligible to retire 

within the next five years. If the agency’s goal is to build a workforce that feels both 

valued and respected, the results from the OPM survey clearly show that the agency 

needs to make major changes in its treatment of employees.

Staffing Shortages at the Ports of Entry 

The President’s FY 2007 budget proposal requests about $4.4 billion for the Department of Homeland Security’s (DHS) U.S. Customs and Border Protection Bureau. This is a 12 percent increase in CBP’s budget, but the bulk of the new money 

is to fund the hiring of 1,500 Border Patrol agents. For salaries and expenses for 

Border Security, Inspection and Trade Facilitation at the 317 Ports of Entry (POEs), 

the budget calls for an increase of only $32 million, adding just 21 Full Time 

Equivalents (FTEs). 

According to the GAO, ‘‘as of June 2003, CBP has not increased staffing levels [at the POEs]’’ (see GAO–05–663 page 19) and ‘‘CBP does not systematically assess the number of staff required to accomplish its mission at ports 

and airports nationwide or assure that officers are allocated to airports with the 

greatest needs. . .CBP is developing a staffing model. . .however the new 

model. . .will not be used assess optimal level of staff to ensure security while facilitating travel at individual port and port facilities, including airports.’’ 

It is instructive here to note that the former U.S. Customs Service’s last internal 

review of staffing for Fiscal Years 2000–2002 dated February 25, 2000, known as 

the Resource Allocation Model or R.A.M., shows that the Customs Service needed 

over 14,776 new hires just to fulfill its basic mission—and that was before September 11. Since then the Department of Homeland Security was created and the 

U.S. Customs Service was merged with the Immigration and Naturalization Service 

and parts of the Agriculture Plant Health Inspection Service to create Customs and 

Border Protection and given an expanded mission of providing the first line of defense against terrorism, but also to make sure trade laws are enforced and trade 

revenue collected. 

Staffing Shortages at the Airports: According to GAO–05–663: International 

Air Passengers Staffing Model for Airport Inspections Personnel Can Be Improved,

July 2005, there is much evidence that airports are experiencing staffing shortages. 

This report was prepared at the request of the House Subcommittee on Immigration, Border Security and Claims, Committee on Judiciary. 

CBP has two overarching and sometimes conflicting goals: increasing security 

while facilitating trade and travel. Prior to 9/11 there was a law on the books requiring INS to process incoming international passengers within 45 minutes. The 

Enhanced Border Security and Visa Protection Act of 2002 repealed the 45 minute 

standard; however, ‘‘it added a provision specifying that staffing levels estimated by 

CBP in workforce models be based upon the goal of providing immigration services 

within 45 minutes (page 12–13).’’ NTEU believes that staffing levels are not adequate to meet the 45 minute rule while enforcing necessary security measures. 

Staffing Shortages at the Seaports: The Dubai Ports sale has recently put a 

spotlight on the issue of seaport security. The Administration states that the Con-
49

tainer Security Initiative (CSI) and the Customs-Trade Partnership Against Terrorism (C–TPAT) program are ensuring that 100% of foreign cargo is being scanned 

for WMD or other terrorist contraband either at the foreign departure port or at 

the POE. According to GAO–05–557 on Container Security, ‘‘CBP has developed a 

staffing model to determine staffing needs but has been unable to fully staff some 

ports. . .As a result, 35 percent of these shipments were not targeted and were 

therefore not subject to inspection overseas.’’ (see highlights page.) 

In another GAO report (GAO–05–466T) on Key Cargo Security Programs, GAO 

found ‘‘several factors limit CBP’s ability to successfully target containers to determine if they are high-risk. One factor is staffing imbalances. . .’’ (see highlights 

page.) At port security hearings in both the House and Senate last month, GAO testified that staffing issues continue to impede the effectiveness of CSI and C–TPAT. 

NTEU is gratified and wholeheartedly supports the provisions in the Housepassed immigration and border security bill and SAFE Ports Act that authorize the 

hiring of 1250 new CBPOs at the POEs over the next five years. Without an appropriation to fund these new positions, CBP will continue to be plagued with staffing 

shortages at the POEs. 

Staffing Shortages in Trade Enforcement: When CBP was created, it was 

given a dual mission of not only safeguarding our nation’s borders and ports from 

terrorist attacks, but also the mission of regulating and facilitating international 

trade; collecting import duties; and enforcing U.S. trade laws. In 2005, CBP processed 29 million trade entries and collected $31.4 billion in revenue.. 

Section 412(b) of the Homeland Security Act of 2002 (P.L.107–296) mandates that 

‘‘the Secretary [of Homeland Security] may not consolidate, discontinue, or diminish 

those functions. . .performed by the United States Customs Service. . .on or after 

the effective date of this Act, reduce the staffing level, or reduce the resources attributable to such functions, and the Secretary shall ensure that an appropriate 

management structure is implemented to carry out such functions.’’

When questioned on compliance with Sec. 412(b), then-CBP Commissioner Bonner 

stated in a June 16, 2005 letter to Representative Rangel that ‘‘While overall spending has increased, budget constraints and competing priorities have caused overall 

personnel levels to decline.’’ The bottom line is that DHS is non-compliant with Section 412(b) of the HSA. As stated in the June 16, 2005 letter, ‘‘CBP employed 1,080 

non-supervisory import specialists in FY 2001 and 948 as of March 2005.’’ CBP’s 

most recent data shows 892 full-time, plus 21 part-time Import Specialists—913 

total employed by CBP. 

On March 30, 2006, NTEU-supported legislation was introduced in the House and 

Senate, S. 2481 and H.R. 5069, that would require the Department of Homeland Security to comply with Section 412(b) of the Homeland Security Act (P.L. 107–296). 

NTEU urges the Committee to inquire of CBP their plans to become compliant with 

Section 412(b) and their timeline to become compliant.

One Face at the Border Initiative 

The One Face at the Border (OFAB) initiative was designed to eliminate the pre9/11 separation of immigration, customs, and agriculture functions at US land, sea 

and air ports of entry. In practice the OFAB initiative has resulted in diluting customs, immigration and agriculture inspection specialization and the quality of passenger and cargo inspections. 

Under OFAB, former INS officers that are experts in identifying counterfeit foreign visas are now at seaports reviewing bills of lading from foreign container ships, 

while expert seaport Customs inspectors are now reviewing passports at airports. 

The processes, procedures and skills are very different at land, sea and air ports, 

as are the training and skill sets needed for passenger processing and cargo inspection. 

It is apparent that CBP sees its One Face at the Border initiative as a means 

to ‘‘increase management flexibility’’ without increasing staffing levels. Congress, in 

the Immigration and Border Security bill passed by the House last year, HR 4437, 

section 105, requires the Secretary of Homeland Security to submit a report to Congress ‘‘describing the tangible and quantifiable benefits of the One Face at the Border Initiative. . .outlining the steps taken by the Department to ensure that expertise is retained with respect to customs, immigration, and agriculture inspection 

functions. . .’’ NTEU believes such a report will reveal the serious negative impact 

on national security of this misguided program. 

Law Enforcement Status 

The most significant source of consternation for CBPOs, is the lack of law enforcement officer (LEO) status for CBP officers. LEO recognition is of vital importance 

to CBP officers, CBP Officers perform work every day that is as demanding and 
50

dangerous as any member of the federal law enforcement community, yet they have 

long been denied LEO status. 

Within the CBP there are two classes of federal employees, those with law enforcement officer status and its benefits and those without. Unfortunately, CBP officers and Canine Enforcement Officers fall into the latter class and are denied benefits given to other federal employees in CBP who they work with at 317 ports-ofentry across the country. 

A remedy to this situation exists in an important piece of legislation involving the 

definition of law enforcement officer introduced in this Congress, H.R. 1002, Law 

Enforcement Officers Equity Act of 2005. NTEU strongly supports this bipartisan 

legislation introduced by Representatives Bob Filner (D–CA) and John McHugh (R–

NY) and has 151 cosponsors to date, including Homeland Security Committee Chairman Peter King (R–NY) and full Committee and Subcommittee Ranking Members 

Bennie Thompson (D–MS) and Kendrick Meek (D–FL). This legislation would treat 

CBP Officers as law enforcement officers for the purpose of 20-year retirement. 

When law enforcement officers from different agencies join forces on a drug raid 

or to search a boat for armed smugglers or terrorists, CBP officers are often the only 

officers on the scene who are not considered law enforcement personnel for retirement purposes. They all face the same dangers and the risk of death or injury, but 

they don’t all have the same rights and status. 

CBP Officers carry weapons, and at least three times a year, they must qualify 

and maintain proficiency on a firearm range. CBP Officers have the authority to apprehend and detain those engaged in smuggling drugs and violating other civil and 

criminal laws. They have search and seizure authority, as well as the authority to 

enforce warrants. All of which are standard tests of law enforcement officer status. 

Every day, CBP Officers stand on the front lines in the war to stop the flow of 

drugs, pornography and illegal contraband into the United States. It was a legacy 

Customs Inspector who apprehended a terrorist trying to cross the border into 

Washington State with the intent to blow up Los Angeles International Airport in 

December 1999. 

On February 28, 2006, another deadly shooting occurred at a U.S. border crossing, 

the third in a little more than a month, at Brownsville, Texas, when CBPOs were 

forced to open fire on the driver of a stolen vehicle who was attempting to flee 

across the border. At least two CBPOs were involved as the suspect turned the vehicle toward them and tried to run them down in an effort to escape. Earlier in 2006, 

similar shootouts occurred between CBPOs and fugitives at the U.S.-Canada border 

in Blaine, Washington, and at the southwest border in Douglas, Arizona. 

As in the case of the other two recent border shootings, when local law enforcement officers needed help to capture or stop a suspect, they reached out to CBPOs. 

CBPOs at our borders are required to carry firearms, are trained in their use and 

have arrest authority, there is simply no justification for continuing to deny them 

law enforcement officer status. Terrorists, drug smugglers and fugitives do not hesitate to use violence to avoid being caught and arrested. 

Many people do not recognize the sacrifices that CBPOs and Canine Enforcement 

Officers make for the CBP. Their lives are controlled by their jobs. They rarely work 

regular 9 to 5 schedules and they have little control over the schedules they do work 

in any given two-week period. Staffing levels are not adequate to meet the needs 

of most ports, so Inspectors are frequently asked to work on their days off or to work 

beyond their regular shifts. The constant strain of performing dangerous, life-threatening work on an irregular and unpredictable schedule has a profound impact on 

the health and personal lives of many CBPOs. They must maintain control and authority, sometimes for 16 hours a day, knowing that a dangerous situation could 

arise at any moment. 

Given the significance of these jobs, it is vitally important for CBP to be competitive with other state and local law enforcement agencies in the recruitment and retention of first-rate personnel. Recruitment and retention of capable personnel was 

a preeminent consideration behind Congress’ establishment of the twenty-year retirement option for other law enforcement officers and firefighters. NTEU believes 

the same compelling reasons exist here. 

Newer hires to CBP are highly susceptible to the pull of twenty-year retirement 

benefits and higher salaries offered by state and local law enforcement agencies. 

They have received costly training and on-the-job experience within CBP, but they 

know they deserve to be rewarded for the dangers and risks they are exposed to 

every day. All too often, talented young officers treat Customs as a stepping-stone 

to other law enforcement agencies with more generous retirement benefits.
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No Pay for Saturday Training 

Customs Inspectors and CBPOs who received basic training at the Federal Law 

Enforcement Training Center (FLETC) between January 1, 2002, and October 1, 

2004, were not compensated for the sixth day of training for each week during that 

period. After four years of persistent efforts, NTEU has reached a favorable financial settlement with CBP that will provide appropriate compensation to employees 

who worked unpaid Saturdays during their basic training at FLETC. But, why 

would CBP want to get its new recruits off to such a negative start? It is this kind 

of unnecessarily cavalier treatment of employees that has earned DHS the distinction of being one of the worst places to work in the federal government. 

Misuse of National Security Considerations 

CBP employees are extremely disturbed by the agency’s misuse of national and 

internal security arguments to justify actions that have no security implications, 

while ignoring real threats to our nation’s security. This issue was dramatically 

highlighted when it became known that CBP had raised no security questions about 

the United Arab Emirates owned, Dubai Ports World, buying port facilities in the 

U.S. Yet, the list of actions that CBP has raised security concerns about is long and 

ridiculous. Some examples of CBP’s misuse of security considerations include: 

Warm weather uniforms: CBP argued that wearing uniforms with shorts in 

very warm climates threatened internal security. The Federal Service Impasses 

Panel (FSIP) found there was no security issue. 

Awards: CBP argued that continuing to implement separate negotiated agreements on awards, rather than its preferred single policy would ‘‘increase the risk 

that potential terrorist, terrorist weapons or components would be 

undeterred and go undetected resulting in real or perceived harm to our 

nation’s economic stability and /or its citizens.’’ An arbitrator found no merit 

to CBP’s argument. 

Grooming Standards: CBP unilaterally imposed new personal grooming standards that prohibit beards, limit the length, style and color of hair, set standards for 

fingernail grooming and the amount and type of jewelry. CBP argued that these 

rules were based on internal security needs and necessary for the successful 

functioning of the Agency. An arbitrator ruled against CBP. CBP has appealed 

the decision. 

Alternative Holsters for Pregnant Officers: CBP discontinued a practice of allowing pregnant CBP officers to use shoulder, rather than waist holsters, arguing 

it was a matter of internal security. CBP’s action was upheld. 

These are just a few examples of how CBP continues to misuse security considerations to try to justify the unjustifiable. It is particularly disturbing to CBP employees that security concerns are falsely raised on these types of minor issues, yet 

issues with real security implications, like the Dubai Ports World issue and lack of 

staffing go unquestioned by CBP.

CONCLUSION 

Each year, with trade and travel increasing at astounding rates, CBP personnel 

have been asked to do more work with fewer personnel, training and resources. The 

more than 15,000 CBP employees represented by the NTEU are capable and committed to the varied missions of DHS from border control to the facilitation of trade 

into and out of the United States. They are proud of their part in keeping our country free from terrorism, our neighborhoods safe from drugs and our economy safe 

from illegal trade. These men and women are deserving of more resources and technology to perform their jobs better and more efficiently. 

The American public expects its borders and ports be properly defended. Congress 

must show the public that it is serious about protecting the homeland by fully funding the staffing needs of the CBPOs at our 317 POEs. I urge each of you to visit 

the land, sea and air CBP ports of entry in your home districts. Talk to the CBPOs, 

canine officers, and trade entry and import specialists there to fully comprehend the 

jobs they do and what their work lives are like. 

Again, I would like to thank the committee for the opportunity to be here today 

on behalf of the 150,000 employees represented by NTEU to discuss these extremely 

important federal employee issues.

Mr. ROGERS. The Chair now recognizes Mr. John Gage, National 

President of the American Federation of Government Employees, 

for your statement. Thank you, Mr. Gage. 
52

STATEMENT OF JOHN GAGE 

Mr. GAGE. Thank you, Mr. Chairman. I just—in my travels I visited Anniston two weeks ago, and I must say it was very heartening to see a strong labor relations commitment there, and my 

2,700 members down there, and the president, Everett Kelly, wanted me to thank you for your staff work and your just great support 

for the mission and the employees of Anniston. 

Now, DHS. I am beyond giving this Department the benefit of 

the doubt. I have traveled the country, talked to hundreds of officers, and there is no question, there really shouldn’t be any question, why morale is so bad. It starts off with the stupid. 

You know, there was a guy—I was out in Houston, and they just 

did a 10 percent—put up on the board 10 percent of the people 

have to go over to Customs, 10 percent of the Customs have to go 

to Immigration. Okay, they put all the senior people on the list, or 

they went in seniority the wrong way. So a guy comes up to me 

and says, I am retiring in a month, I am the senior guy on immigration, I am training my replacement on the specific thing that I 

do. So I said, let me see what I can do. 

I had a meet-and-greet with the boss, and so I brought it up with 

him, and I said, did you know-why did you do this on this inverse 

seniority? No reason. I said, you know, a guy is retiring in a 

month, another guy is retiring in 2 months, the training won’t even 

be over before they are retiring, and you have volunteers to do this. 

And he goes, no, I didn’t know that. I said, well, you know it now; 

can we work something out with this? I have made my decision, 

that is it. And that was just the story that went around the whole 

port about how dumb this type of management is. 

But the real issues are on money. This agency is nickel and 

diming these employees every chance it gets. For instance, senior 

inspectors, they had a provision, AUO, an overtime provision, because they, off their tour, they are investigating and the prosecution of detainees, et cetera, and they have had this benefit for 

years. And the agency comes in when the Department was formed 

and said, well, we are taking that away, but we are going to give 

you this thing called LEAP, which is similar. Then they go and 

they completely renege on it, give them no AUO, no LEAP. These 

guys are taking a 15–to 30,000 hit in their yearly earnings. 

Now, why the agency goes on these things—for instance, FLAP, 

which is bilingual pay, and some of our Immigration and Customs 

people, especially on the southern border, I mean, that is an integral part of their work. They do it more than any other employee, 

I would say, in the Federal Government. Well, the Customs people 

have had bilingual pay; the Immigration people did not. We are in 

litigation with the agency fighting every step of the way not to give 

this benefit. Similarly, the Immigrations people have a Saturday 

overtime provision which NTEU and Customs do not, and they 

dragged NTEU through long litigation, which they finally won, to 

get this benefit. 

These ‘‘other than permanent people’’ who they use for—some of 

them have worked at the agency 12, 15 years; they are paid a 

grade 7, yet they are used to do the full range of the job of Immigration Customs, and they say, well, we can’t pay you because you 

are not qualified, but we can order you to do the work. Now, these 
53

folks are saying, if I can do the work, and I have been doing it for 

12 years, why am I not being paid for it? 

And the inadequate pay that we see across the board, especially 

when see get to San Diego, Fort Lauderdale, these high-rent places, 

we are seeing our officers having their families 100 to 200 miles 

away doubling up and getting small apartments during the week 

because they cannot afford the price of a house, and yet they are 

essential employees, and they just can’t afford it. The same goes for 

our agriculture technicians and our agriculture specialists. 

But the real answer that has to be put in right now, which our 

people don’t understand, here is my gun, here is my badge, here 

is my arrest record, tell me why I am not afforded law enforcement 

status in 6(c) coverage. Now, that one thing would improve morale 

tremendously, and that one thing would really stop the turnover 

because that is what the officers are going for. We can’t compete 

in pay with local law enforcement, and they have the benefit of the 

6(c) retirement coverage. 

And if there is one thing that should be done is that Congresswoman Jackson-Lee’s bill really ought to move. This agency can do 

it right now. They have the authority, and they just bring up nickel, dime reasons why they are not providing these benefits to these 

very valuable people. 

So, Mr. Chairman, I think these three or four issues, really, more 

communication with people about why decisions are made, and quit 

fighting them on true law enforcement pay issues that the agency 

should be willingly giving to these folks instead of making the 

unions fight, you know, go through lengthy litigation. 

So finally I just to want say, this is before MAX HR is instituted. 

I dread to think what is going to happen when they have increased 

rights and especially a pay-for-performance scheme that has never 

worked in law enforcement, and our law enforcement officers, as 

well supervisors, dread the day when that is going to break up 

their teamwork in the way they get business done. 

Thank you, Mr. Chairman. I would be happy to answer any questions. 

Mr. ROGERS. Thank you, Mr. Gage. That was very worthwhile. 

[The statement of Mr. Gage follows:]

PREPARED STATEMENT OF JOHN GAGE

Mr. Chairman and Subcommittee Members: My name is John Gage, and I am the 

National President of the American Federation of Government Employees, AFL–CIO 

(AFGE). On behalf of the more than 600,000 federal employees represented by 

AFGE, including 60,000 who work in the Department of Homeland Security (DHS), 

I thank you for the opportunity to testify here today on the current serious problems 

at DHS. 

As you know, the Office of Personnel Management (OPM) conducted its Human 

Capital Survey of Federal Agencies from August to December 2004 and released the 

results in May 2005. An analysis of the results of that survey by the Center for 

American Progress found that DHS came in dead last of the 30 agencies for employee satisfaction, adequate resources, leadership, working conditions and many 

other factors. DHS employees have the lowest morale of any group of Federal employees. 

This does not come as a surprise to AFGE. In 2004, we had the Peter D. Hart 

Research Associates conduct a survey of CBP employees for us. That survey found 

that: 

1. Most frontline CBP personnel do not believe they have been given the tools 

to fight terrorism. 

2. Most believe that DHS could be doing more to protect the country. 
54

3. Most have serious concerns about DHS strategies related to their jobs; the 

majority felt that the ‘‘One Face at the Border’’ initiative has had a negative 

impact. 

4. Most believe that the changes in personnel regulations will make it harder 

to accomplish their mission. 

5. Three in five respondents say that morale is low among their co-workers. 

We shared these findings with DHS, but our survey was dismissed as just a union 

survey—not important. Instead of being alarmed by the results and working with 

us to address the concerns, DHS instead ignored us and its own frontline employees. 

The OPM Human Capital Survey reinforced and validated what we already knew 

from our own poll of the people we represent and from our ongoing communication 

with them. In addition to the concerns above, CBP employees feel strongly that 

there are significant inequities within the Department, including the disparity in 

DHS? recognition of Law Enforcement Officer status.

INTRODUCTION 

Since its inception, DHS has not been straightforward or honest in its dealings 

with its employees, the public, or the Congress. Looking back, we cannot point to 

a single thing DHS has done right regarding its frontline employees. 

Since September 11, 2001, the Bush Administration has taken every opportunity 

available to advocate for a profound erosion of civil service protections and collective 

bargaining rights for federal employees. In 2002, the Bush Administration reluctantly agreed with Senator Joseph Lieberman (D–CT) that the creation of a Department of Homeland Security (DHS) was necessary. However, the Bush Administration insisted on a quid pro quo for that acquiescence; specifically, that federal employees who were transferred into the new department would not be guaranteed the 

collective bargaining rights they had enjoyed since President Kennedy was in office. 

In addition, the Bush Administration insisted that the legislation that was eventually signed into law exempt the DHS from compliance with major chapters of Title 

5 of the U.S. Code, including pay, classification, performance management, disciplinary actions and appeal rights, as well as collective bargaining rights.

DEPARTMENT OF HOMELAND SECURITY 

On November 25, 2002, President Bush signed the bill creating the Department 

of Homeland Security (DHS). This law has combined 22 federal agencies and 

170,000 employees, 60,000 of whom are represented by AFGE. Most of these employees had been working for the Immigration and Naturalization Service (INS) as 

Border Patrol Agents, Immigration Inspectors, Special Agents, and Detention and 

Deportation Officers. AFGE-represented employees from the Coast Guard, the Federal Emergency Management Agency, the Animal and Plant Health Inspection Service (formerly under the Department of Agriculture), the Federal Protective Service, 

the Chemical, Biological, Radiological and Nuclear Response Assets division of the 

Department of Health and Human Services, and the Plum Island Animal Disease 

Center were also brought into DHS.

The Right to Organize 

One of the most contentious issues in the Congressional debate on the creation 

of the DHS related to the authority of the President to deny collective bargaining 

rights to employees, subdivisions and agencies engaged in national security work. 

President Bush used this authority early in 2002 to prevent employees of the U.S. 

Attorneys’ offices from organizing. Both because of this action, and fears that the 

President would abuse this power by excluding all unions from the DHS, AFGE 

spearheaded an effort in Congress to limit this authority. After a protracted debate, 

the Congress agreed with the Administration’s position on this matter. Since enactment, President Bush has exercised the power to exclude unions from all or part 

of the Department through his December 2005 Executive Order eliminating collective bargaining rights for all employees of the Office of Investigation in Immigration 

and Customs Enforcement (ICE).

Personnel Flexibility Provisions 

An equally contentious issue during the debate on homeland security in 2002 concerned the supposed need for additional personnel flexibilities in connection with 

managing employees of the DHS. Section 841 of the Act authorizes the establishment of a new Human Resource Management System and provides the Administration with the ability to modify Chapter 5 of the United States Code in each of the 

following areas: pay, classification, performance, disciplinary actions, appeals, and 

labor†management relations. The rationale was to put all 170,000 of the agency’s 

employees under one set of rules and policies. Conveniently ignored was that 60,000 

of the 170,000 (more than a third) of those employees, the TSA screeners, would be 

outside the supposedly department-wide system. 
55

The new law created a process for employee collaboration in the development of 

the new system, but left the Secretary of DHS with the final authority to impose 

changes over objections from unions or other employee representatives. In 2003, 

AFGE and representatives from OPM and DHS spent six months exploring options 

and debating proposals to address pay, classification, performance, disciplinary actions, appeals and labor-management relations. This was followed by a statutory 

‘‘meet and confer’’ process over the regulations DHS proposed. DHS published its 

final regulations, called ‘‘MAXHR,’’ on February 1, 2005. AFGE and others sued to 

block implementation, and in August 2005, Federal Judge Rosemary Collyer ruled 

that major portions of the DHS regulations, including those involving collective bargaining, were an illegal violation of the terms set forth in the Homeland Security 

Act. DHS has appealed the judge’s rulings, and thus the fate of the DHS personnel 

system remains unknown.

Pay System 

The DHS personnel regulations provide very little detail about the new pay system for DHS employees, and leave broad discretion in every area. DHS has not yet 

issued any directives about pay. This raises the real possibility that the salaries of 

some employees will unfairly lag behind those of other employees in the Federal 

Government, making it extremely difficult to attract and retain high-quality employees. Everything we have seen to date indicates that this is a ploy to reduce pay for 

most DHS employees, resulting in lower standards of living and lower morale. Once 

this system is implemented and experienced employees start heading for the exit 

doors, it will be impossible to replace their expertise. The employees of the DHS will 

quietly, one by one, leave to pursue careers in other agencies that will treat them 

with the dignity and fairness that they deserve. The real losers in this ill-advised 

experiment will be the American citizens who are looking to their government for 

protection. We call on this Committee to revoke DHS’ authority for MAXHR and use 

the funds for better purposes—to increase staff and strengthen frontline border protection.

Collective Bargaining 

Under the DHS personnel regulations, the scope of bargaining is so limited that 

unions will no longer be permitted to bargain over any issues that are even remotely 

related to operational matters, even though they often profoundly affect these employees who possess a great deal of knowledge about them. In addition, the final 

DHS personnel regulations reduce DHS’ obligation to collectively bargain over the 

already narrowed scope of negotiable matters by making department-wide regulations non-negotiable. Collective bargaining is currently precluded only over government-wide regulations and agency regulations for which a ‘‘compelling need’’ exists. 

The final DHS personnel regulations would allow management to void existing collective bargaining agreements, and render matters non-negotiable, simply by issuing 

any department-wide regulation. The result is that employees will be deprived of 

their voice in most workplace decisions. 

In addition, the DHS personnel regulations transfer responsibility for adjudicating 

collective bargaining disputes from the Federal Labor Relations Authority (FLRA) 

and the Federal Service Impasses Panel (FSIP) to an internal DHS Labor Relations 

Board, whose members are hand-picked by the DHS Secretary with no Senate confirmation. These members are removable only by the Secretary. Meaningful collective bargaining must have independent review and resolution of disputes. 

Judge Rosemary Collyer ruled against DHS and found that the final regulations 

impermissibly limit bargaining and do not provide for an independent third party 

for dispute resolution, and, therefore, do not ensure collective bargaining as required 

by the Homeland Security Act.

Employee Appeal Rights 

The Homeland Security Act gave the Secretary and OPM Director authority to 

modify the appeals procedures of Title 5, but only in order ‘‘to further the fair, efficient and expeditious resolution of matters involving the employees of the Department.’’ Instead, the final regulations virtually eliminate due process by limiting the 

current authority of the Merit System Protections Board (MSPB), arbitrators and 

adjudicating officials to modify agency-imposed penalties in DHS cases to situations 

where the penalty is ‘‘wholly without justification,’’ a new standard for DHS employees that will rarely, if ever, be met.

DHS Went Beyond Congressional Authorization 

As mentioned earlier, District Court Judge Collyer agreed that DHS has gone beyond the latitude that the law allowed in both labor relations and appeals. That decision is currently being appealed by DHS. 
56

DHS has claimed that it created a new personnel system that ensured collective 

bargaining, as required by Congress. But the Court has ruled that it has not ensured collective bargaining, but eviscerated it. DHS has claimed that its regulations 

are fair, as required by Congress. But the Court has ruled that they are not fair, 

because they would improperly prevent the MSPB from mitigating a penalty it considered to be too harsh or out of proportion to the offense. 

AFGE has no confidence that DHS will be less deceptive or do a better job with 

the other parts of MAXHR and create and implement fair, credible and workable pay, 

performance management and classification systems. DHS employees also have no 

confidence and a great deal of anxiety and distrust about these new systems.

COLLABORATION WITH UNIONS 

This distrust did not happen overnight. Let me give you a little background on 

our involvement in the whole process of developing MAXHR. As you will see, the 

process was a charade in which employees? views, and the views of their representatives, were collected, and then ignored. 

Under the Homeland Security Act, the Secretary of Homeland Security and the 

Director of OPM were authorized to issue regulations jointly that would establish 

and describe the new personnel system. 

The development of the personnel system involved both a formal statutory collaborative process between unions representing the agencies’ rank-and-file employees 

and agency operational managers and an earlier design process created by the Secretary and the Director.

The Statutory Collaboration Process 

The Homeland Security Act required that the new personnel system be created 

with full participation by elected representatives of the employees. 

Under section 9701(e)(1)(A), the Director and Secretary were required to provide 

their proposal to the employee representatives. The unions would then have 30 days 

to review the proposal and make recommendations to improve it. After receiving 

these recommendations, the Director and Secretary were required to give them ‘‘full 

and fair consideration in deciding whether or how to proceed with the proposal.’’ 

After deciding how much of the employee representatives’ recommendations to 

adopt and how much to reject, the Secretary and Director were required to tell Congress what recommendations were rejected. The Secretary and Director then were 

to meet and confer for at least 30 days with the unions, in order to attempt to reach 

agreement on the points in dispute. The Federal Mediation and Conciliation Service 

was to assist. 

Ultimately, the Secretary and Director adopted regulations over the employees’ 

objections.

The Pre-statutory Design Process 

Rather than launch right into the statutory process, the Secretary and Director 

established a preliminary design process, which included substantial union involvement from April through approximately October 2003. 

During this time, AFGE participated in developing options for the new personnel 

system along with management representatives from DHS, OPM, and other unions. 

The group, called the Design Team, divided into two sub groups—one focused on 

Pay, Performance and Classification while the other focused on Labor Relations, Adverse Actions and Appeals. Over the six months that the group operated, it heard 

from experts in personnel system design from academic institutions, federal agencies, non-profits, and private firms. The members of the group read from the extensive body of literature on human resource systems and contacted organizations in 

the private sector, the non-profit sector, federal agencies, and state and local governments to learn more about their personnel systems. 

In addition to the Design Team, a Field Review Team was established, comprised 

of union representatives and managers from DHS facilities around the country. The 

Field Review Team and the Design Team shared ideas and criticisms of the developing materials at these times.

Site Visits, Focus Groups, and Town Hall Meetings 

During the summer of 2003, members of the Design Team and top DHS, OPM 

and union officials traveled to eight cities around the country to hold Town Hall 

meetings for DHS employees in the area and to conduct focus groups with both 

management and non-management employees. These visits took place in Norfolk, 

New York, Detroit, Seattle, Los Angeles, El Paso, Miami, and Atlanta. During the 

Town Hall meetings, employees were free to ask questions, make comments or express their concerns. And they did, in city after city, speak up and say what was 

on their minds. 
57

In the focus groups, DHS workers were asked to discuss pay, classification, performance management, labor relations, adverse actions, and appeals—specifically to 

talk about what works, what doesn’t and what might be an improvement. Employees shared their ideas, told us about rumors circulating in their workplaces, and 

voiced their deep concerns about radically changing a system the vast majority felt 

needed only small changes to work better. 

In fact, the Design Team heard over and over again, both in the Town Hall meetings and in the focus groups, that if the current system were properly funded and 

carried out, it would work well. DHS employees said it was important for working 

people to be able to have some confidence in the stability of their income so they 

could plan for their families? futures. They said that their performance appraisal 

systems did a poor job of accurately and fairly making distinctions among employees 

about their performance. They said that favoritism and poor management were big 

problems where they worked and that giving supervisors and managers more control over their pay was a bad idea. They said they feared what pay-for-performance 

would do to cooperation, teamwork, and the sense of pulling together for a common 

mission. They said they wanted to be protected from erroneous or vengeful management actions against them. 

While the members of the Design Team were in these eight cities, they also visited several DHS workplaces in the area. This gave the Team insights into the variety of jobs DHS employees perform and an increased appreciation of the vital work 

done by the Department. At several of the sites, Team members had an opportunity 

to talk with employees. Once again, the overriding themes were concerns about putting pay decisions, based on subjective performance evaluations, into the hands of 

managers, pitting employee against employee to win the prize of a higher payout, 

losing protections against wrongful management actions, and losing the right to 

have a meaningful say about conditions in their workplaces.

Personnel System Options 

Once the Design Team members were back home, work on developing the options 

started in earnest. The Team brainstormed ideas for options, grouped similar ideas 

together, and set up committees to begin the work. Out of this process came the 

fifty-two options that went forward to the Senior Review Committee and then to the 

Secretary of DHS and the Director of OPM. Regrettably, there was no rigorous attempt to derive the options from the actual research that was done nor to show evidence that such options were likely to be successful or solve real problems in the 

Federal workplace. 

The Senior Review Committee (SRC) included me in my capacity as AFGE National President, as well as the presidents of the National Treasury Employees 

Union (NTEU) and the National Association of Agricultural Employees (NAAE), top 

officials from DHS and OPM and technical advisors from universities and the private sector. The SRC met first in July to approve the guiding principles and the 

process developed by the Design Team. In October, we held a two-and-a-half-day facilitated meeting to discuss the options and various ideas and concerns we all had 

about personnel reform. While the discussions were lively and informative, there 

was no attempt to winnow down the number of options to those most palatable to 

the SRC as a whole; rather, all fifty-two went forward to the Secretary and the Director. In other words, this high level committee was not asked to do the real work 

of collaboration and try to come up with ideas we could all live with. Instead, it was 

all for show. 

AFGE insisted on being able to participate in this endeavor, as we were assured 

that the work of the Design Team and the Senior Review Committee would be heeded when DHS and OPM made decisions regarding the new DHS personnel system. 

In fact, both DHS and OPM involved AFGE well before the statutory collaboration 

process began. Substantial resources were devoted to establishing and supporting 

the Design Team, the Field Review Team, and the Senior Review Committee, as 

well as carrying out the ambitious schedule of Town Hall meetings and focus groups 

around the country. During the Design Team process there was a genuine sense of 

collaboration. 

That is why we are so angry with the outcome of the process. This anger goes 

beyond our fundamental disagreement with many of the decisions that made their 

way into the regulations. We also are outraged that the regulations do not reflect 

the research that was done by the Design Team, the views and preferences of the 

overwhelming majority of Town Hall and focus group participants, the bulk of academic research in the field, the more than 3500 comments (a record at the time) 

sent in by employees and members of the public, or the ideas and objections raised 

by the Unions during the Meet and Confer process. Ultimately, none of this 

mattered to DHS and OPM when they developed their regulations.
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Employees’ Views 

As mentioned above, the Design Team heard over and over again, both in the 

Town Hall meetings and in the focus groups, that if the current system were properly funded and carried out, it could achieve everything the advocates of change professed to want. Both managers and non-managers made it clear that they did not 

believe that there were terrible problems that could only be solved by radical 

change. If anything, DHS employees said they feared that problems and disruptions 

would result from, not be resolved by, such change. Employees said it would harm 

morale and recruitment for workers to have no stability in their income. By far the 

vast majority of workers did not believe their appraisal systems or their managers 

could do a fair and accurate job of paying good employees different amounts based 

on their performance. They feared that such a system would create a cutthroat environment among employees and harm the Department’s ability to carry out its mission. There was absolutely no call from the employees the Design Team researched 

to make the changes found in the regulations.

Review of Other Employers 

Even if one looks hard, one would find little, if anything, in the research done 

by the Design Team that supports the proposed or final regulations. It is telling that 

in the introductory explanations to the proposed regulations, the authors do not 

even pretend that any proposals were drawn from the research or cite any research 

to support them. Instead they allude to undocumented and unproven allegations 

about the inability of federal managers to do their jobs under the current system. 

Indeed, the regulations reinforce the fears employees expressed to us during the site 

visits and in other communications, namely that the outcome was, for the most part, 

predetermined and based on the ideological wish lists of certain segments of management and the Administration rather than on any study of the facts. 

What does the research documented by the Design Team actually show? It shows 

that in all the organizations researched by the Team, only New York State has any 

system in place to evaluate the success of its labor relations program. It shows that 

the Australian Customs Service has a pay-banding system in which pay, performance and classification plans are negotiated with the employees’ unions and become 

part of the contract. It shows that in Great Britain’s Her Majesty’s Customs and 

Excise, there is a pay banding system with 11 bands and pay increases are negotiated with the two unions that represent the employees. 

The Design Team research shows that the Kings County Washington Sheriff’s Department Personnel Manager does not recommend pay-for-performance for public 

sector employees. He says it creates three or four months of chaos and resentment 

and there is no return on investment. It is hard to measure things objectively and 

counting things like arrests can backfire. It is often the luck of the draw—one employee can have many cases that each take only a short time while another gets 

a case that takes years to resolve. How do you equalize employees’ opportunities to 

do the things that get them pay increases? 

In North Carolina, the Design Team learned that the State Department of Transportation implemented a competence-based system. Unfortunately, the state legislature failed to provide a general increase for state workers so everyone in the Department was given a one-time bonus of $550 and 10 bonus leave days. The research 

showed that in New York State, pay is negotiated with the employees’ unions and 

there is no pay-for-performance system. In Philadelphia, four different unions negotiate the systems for white collar, blue collar, police, and fire fighters. Classification 

and pay changes are subject to review by a joint labor-management committee. In 

the state of Pennsylvania, bargaining unit pay is negotiated and, while employees 

are not required to join the union, they must pay a fair share if they do not join. 

There are no pay-for-performance systems. 

In Hampton, VA, there is a pay-for-performance system, but it doesn’t include police, fire or rescue employees, jobs similar to the core jobs in DHS. They get increases based on training and certification in required skills. In Pierce County in 

Washington State, half of an employee’s pay increase is based on seniority and half 

on performance. Here too, however, police and firefighters get competency adjustments instead. Riverside County, California has a competency-based pay system for 

500 Information Technology employees, which must be negotiated prior to implementation in bargaining units. Employees with more than five years on the job are 

eligible for a ?Historical Knowledge? competency, similar to a longevity increase, in 

order to recognize the importance of experience and loyalty. 

St. Paul, Minnesota has 26 bargaining units that negotiate pay, performance appraisal systems, and other conditions of employment. Most employees are under a 

step system similar to the current General Schedule system. Attorneys, however, 

are under a collectively bargained performance progression system. The Washington 
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State Legislature recently passed a law that expands the scope of bargaining to include economic issues. At the same time, the legislation called for changing the civil 

service system. They have rejected the idea of a pure pay-for-performance system 

as too onerous and contrary to their culture. They plan instead to have a mix of 

performance awards, incentives, skill-based systems, gainsharing, etc. They said 

that pay-for-performance should be the last thing implemented, if at all. First you 

have to have sound classification, pay and performance management systems in 

place. 

According to the Design Team research, the Federal Aviation Administration has 

a Core Compensation Plan, which is negotiated in bargaining units, including pay. 

Since the completion of the Design Team process an additional bargaining unit 

reached agreement on the Plan, but it calls for any Organizational Success Increase 

determined by the Administrator to be divided equally among the employees rather 

than more being given to some based on their appraisals. Employees may grieve virtually all pay-setting actions through the MSPB, negotiated grievance procedures 

for bargaining unit employees, or through what FAA calls its ‘‘Guaranteed Fair 

Treatment Process,’’ in which the employee and management jointly select a neutral 

third party. We have since learned that 2000 FAA employees filed a lawsuit because 

they had not received a pay increase for three years. 

The Bureau of Alcohol, Tobacco, Firearms and Explosives has a pay-banding, payfor-performance demonstration project that involves only its scientific, technical and 

engineering positions. The FBI has a pass/fail system and no pay banding. 

The Federal Deposit Insurance Corporation (FDIC) has a pay system that is collectively bargained. They used to have a pay-for-performance system tied to appraisals but abandoned it and replaced it with a pass/fail system. They found that the 

amount of pay differences based on differences in performance was too small to justify the administrative costs of running the program. They are replacing it with a 

program in which at least one-third of the employees will be recognized as top contributors and receive additional 3% increases. The Board of Governors of the Federal Reserve System has a pay-for-performance system that covers mostly professional employees. The Government Accountability Office has a pay banding system 

in which employees are evaluated on their performance in core competencies. They 

have since moved to a market-based system. There have been recent reports in the 

press of dissatisfaction among GAO employees, with some leaving the Office. The 

Internal Revenue Service has a pay-banding system for managers. 

Several small independent agencies have pay-for-performance systems, such as 

the National Credit Union Administration, the National Security Agency, and the 

Comptroller of the Currency, the Office of Thrift Supervision, and the Securities and 

Exchange Commission. Some of the employees of these agencies are represented by 

unions while others are not. The Design Team research has no information about 

whether or not any of these systems are successful. The Transportation Security Administration has a core compensation system for non-screeners based on the FAA 

system. Because of problems with the performance appraisal system, employees received increases equivalent to the GS increase in January 2003 rather than increases based on performance. 

The Boys and Girls Clubs of America aims for a bell curve distribution of their 

performance ratings and bases its employees’ pay on them. Boeing has broad bands, 

with merit pay increases based on performance. In bargaining units, the unions negotiate how much of the increase is guaranteed and how much is subject to performance pay. General Electric has a pay-for-performance banding system for managers—the bulk of the workforce is not included. IBM has a market-driven pay system that allows the top 20% of performers to get increases as much as three times 

the amount given to the bottom 20%. IBM told the Design Team that it is easy to 

differentiate the top and bottom performers but it is very difficult to make distinctions among their good employees in the middle. In the Union Pacific Railroad, 

about 70% of employees get performance cash awards. At PepsiCo, executives and 

non-union employees are in a pay-for-performance system. The research for Verizon 

only deals with managers who are in a pay-for-performance system. 

None of the research backs up the final DHS regulations or shows that 

pay-for-performance works in the sense of improving employee performance, lowering costs, and improving recruitment or retention. Not surprisingly, there was no attempt to try to demonstrate any of the alleged virtues of pay 

for performance. In fact, in response to AFGE requests for any evidence that payfor-performance improves the quality or productivity of an organization, we were 

told that this was not the goal. OPM claimed that performance pay was a ‘‘fairness’’ 

issue. Apparently, according to both OPM and DHS senior leaders on the Design 

Team, employees resent working hard and having a co-worker, who they believe is 

not working quite as hard get the same amount of pay. 
60

Maybe this is a problem in headquarters offices. We don’t hear this concern from 

our members who work at the ports and borders, and other federal facilities. Most 

employees don’t waste time stewing about their co-workers. People at the frontlines 

know who can’t do the job (very few) and who can. Beyond that, they know who 

is better at certain things, who is the go-to person for certain questions, etc. They 

know that some days you do something heroic and weeks can go by just doing routine things. Add pay for performance to most frontline jobs, and you WILL make 

that belief that workers resent each other come true. 

Why implement an entire pay system whose sole justification is to accommodate 

employees who pout about what a co-worker is paid? What about teamwork and 

agency mission? Even OPM admits that adopting agency-wide pay for performance 

is not a solution to managers’ disinclination to address the much-hyped problem of 

poor performers. However, they are basing their recommendations on good employees’ supposed belief that they are better than other employees and grousing about 

not getting a little more money. 

AFGE does not believe that poor performers should continue in jobs they cannot 

or will not do right. Our members do not want to work with poor performers. We 

believe that managers should bring sub-par performance to an employee’s attention, 

try to find out what is causing it, provide training or other resources, and give the 

employee time and encouragement to improve. Ultimately, however, if the employee 

is unwilling or unable to improve, action should be taken to demote, reassign or terminate that employee. We don’t see anything in MAXHR that gives us confidence 

that this will happen any better than it does currently. Of course, there should be 

fair and independent appeals processes for the employee to challenge the decision. 

But it is wrong to make the kind of radical and disruptive change DHS is planning 

because it believes that some good employees worry about what other good employees are making. This is an absurd and puerile basis for imposing a potentially destructive pay system on an entire agency.

Meet and Confer 

As required by Congress, DHS and OPM met with the three unions in order to 

attempt to reach agreement on the points in dispute with the proposed regulations. 

Rather than enumerate those things that DHS agreed with the unions about and 

those that were in dispute, DHS chose to withhold that information, thus making 

the Meet and Confer process less efficient—we weren’t able to focus on the most important disagreements. In addition, we weren’t able to use the time to deal with the 

details of the new pay, performance management and classification systems, because DHS had put only vague ideas in the proposed regulations. Ultimately, the 

final regulations did not reflect the ideas, concerns or suggestions of the unions in 

any meaningful way. Once again, the process was a sham. 

ANALYSIS OF THE PAY, PERFORMANCE MANAGEMENT AND 

CLASSIFICATION SYSTEMS 

Any new pay and classification system should support, not undermine, the mission of DHS. This is only possible with a system that promotes teamwork, rather 

than penalizes it. Unfortunately, the DHS system fails this basic test. 

DHS plans to establish occupational clusters composed of four bands—(1) entry 

and developmental, (2) full performance, (3) senior expert, and (4) supervisory. With 

proper design and safeguards we see potential benefits in the establishment of an 

entry and developmental band. Although it is not clearly specified how such a band 

would function, we believe that it could be modeled after the current career ladder 

system, which also is an entry and developmental system leading to a full performance level. With negotiated safeguards, which ensure fairness in moving within and 

between bands, availability of appropriate training and assignments to demonstrate 

competence, we could support flexibilities that allow faster movement for those who 

demonstrate readiness for the next level sooner than a year. If bargained collectively, this is the type of reform AFGE would support as a means of enhancing the 

operation of DHS. 

The current classification system provides a good framework for insuring the important principle of equal pay for substantially equal work. There is absolutely no 

indication of how these new clusters and bands will meet this important goal. To 

date, we have not seen even a draft management directive regarding clusters or 

bands. We do know that the regulations propose that an employee’s assignment to 

a particular cluster or band will not be subject to an as yet unspecified DHS reconsideration process. The regulations also state these matters will be barred from collective bargaining. Whether this system will be fair and equitable is anyone’s 

guess—based on what we have seen so far from DHS, we have grave doubts. 

We have many concerns about the system of pay adjustments, but foremost is 

whether or not the adjustments will be funded. Will the Administration and the 
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Congress fund the increases next year? If they do, will they fund them in the succeeding years? As we all know, today’s Congress cannot bind the next one. This is 

especially troublesome in the DHS proposal for annual performance based pay increases, which, if not properly funded, will only produce a ruinous zero sum game 

with the perverse incentive to promote a coworker’s failure. 

The payout system described in the regulations would establish a point system 

for each employee depending upon his or her appraisal. The system is set up in such 

a way that one employee does better if more of his or her co-workers do poorly. The 

value of a payout point is determined after employees have been evaluated. If the 

aggregate amount of ‘‘performance’’ is high, the value of a point is low. If the aggregate amount of ‘‘performance’’ is low, the value of a point is high. The incentive is 

both perverse and clear: The lower the performance of the organization as a whole, 

the bigger the raise an employee judged to be a high performer will receive. Someone motivated to work hard for the promise of a big raise will only achieve his goal 

if management judges the majority of his coworkers to be losers. 

The example given in the proposed regulations describes a group of 100 employees 

for whom the performance pay pool is determined to be $84,390. In this hypothetical 

group, 30 employees receive a ‘‘meets expectations’’ rating valued at 1 point, 46 employees receive an ‘‘exceeds expectations’’ rating valued at 2 points, and 24 employees receive a ‘‘meets excellence’’ rating valued at 3 points. The total number of 

points for the group is 194, which is divided into the performance pay pool to come 

up with $435 as the value of a point. Thus a ‘‘meets expectations’’ employee would 

get $435, an ‘‘exceeds expectations’’ employee would get $870, and a ‘‘meets excellence’’ employee would get a $1,305 pay increase. But what if there were more 

‘‘meets expectations’’ employees or employees who fail to meet expectations and 

fewer ‘‘meets excellence’’ employees or those who ‘‘exceed expectations’’? We call this 

system ‘‘compensation cannibalism.’’ It is a dysfunctional environment that encourages backstabbing rather than teamwork, and fairness is nowhere to be found. 

We are still waiting for more of the actual details. To date, DHS has only issued 

a draft Management Directive (MD) on Labor Relations, which was put on hold due 

to the Court decision, and a final Management Directive on Performance Management, which will not affect bargaining unit employees. We submitted extensive comments on the draft MD and made numerous suggestions that were largely ignored. 

We can only speculate that the MD that will affect our bargaining units will be 

similar to the first MD. At this point, we have little confidence that our ideas and 

concerns about the system as it will apply to bargaining unit members will receive 

any more serious consideration from DHS than we have seen since we first became 

involved. 

Human Resource literature is full of articles about how difficult and counter-productive pay-for-performance is. Bob Behn of Harvard University’s John F. Kennedy 

School of Government wrote about the pitfalls of pay-for-performance, particularly 

for government agencies, which cannot promise that their systems will be consistently and adequately funded over time. Behn argues that one risks demoralizing the 

majority of good workers by singling out a few for rewards—and then finds that, 

usually, employers cannot pay those employees enough to make it worth the problems. Behn says further, ‘‘Government needs to pay people enough to attract real 

talent. Then, to motivate them, it needs to use not money but the significance of 

the mission they are attempting to achieve.’’ 

The DHS regulations also call for market-based pay. DHS has had a hard time 

attracting law enforcement officers because often the local police and sheriff’s departments offer higher pay, so we understand the attractiveness of the idea to agency management. Our support for the Federal Employees Pay Comparability Act 

(FEPCA) is well known, and it is above all a market-based system. Indeed, it is odd 

that the crusaders for pay for performance routinely introduce ‘‘market-based’’ factors as if they were a ‘‘new’’ or ‘‘modern’’ idea that that the current system lacks. 

But what is the principle of comparability if not market-based pay? And why do pay 

for performance zealots disparage comparability and then suggest market-based pay 

as its alternative? 

The answer is that market comparability is expensive, and difficult to administer 

with accuracy because so many federal jobs are unique to the government. One crucial and costly administrative factor is the collection of data that matches federal 

jobs with jobs in the private sector. Notwithstanding the Administration’s insistence 

that half of all federal jobs are ‘‘commercial’’ in nature and ought to be contracted 

out since firms already doing similar work are listed in the Yellow Pages, the truth 

is that job matches for federal jobs are extremely scarce. Most federal jobs are not 

‘‘commercial,’’ they are inherently governmental and simply do not exist outside the 

government. For example, the FAA has a market-based system that excludes its 
62

core employees, the air traffic controllers, because, of course, there is no comparable 

job outside the federal government. 

The market also is volatile. The Design Team saw systems in which an employee, 

whose job is no longer valued as highly in the market as it once was, is left to languish, with little or no pay increases until the market changes, the employee drops 

below it and needs an increase to catch up, or decides to seek employment elsewhere. 

Market studies also can be manipulated to get the results an employer wants. 

DHS chose not to use the United States Bureau of Labor Statistics (BLS) to do the 

studies, we believe, because it feared it would not get the answers it wanted. Instead, DHS is using a private contractor to do these studies. The studies are made 

even more complex because so many diverse jobs are put in the same clusters and 

bands. Deciding which benchmark jobs to study can skew a band higher or lower 

in the market. 

While AFGE strongly opposes so-called pay for performance, the fact is that it can 

actually be made worse by allowing some employees to move ahead in terms of pay 

because of high appraisals, while other employees, with equally high appraisals, are 

held back because they or their entire occupation are considered to be ‘‘over market.’’ This is a worst of all worlds outcome, and one the DHS system seems designed 

to create.

CONTINUING COLLABORATION 

Since the final regulations were published, AFGE has participated in periodic continuing collaboration meetings. These meetings are primarily briefings during which 

DHS Human Resource staff and contractors tell us where they are in developing the 

new performance management, classification and pay systems. We were given the 

opportunity to involve our members in part of the validation process for core competencies in the performance management system last year, and appreciate that involvement. There should, however, be more genuine participation. 

Last October, we were invited to attend workshops during which the market 

matching of benchmark jobs to the private sector were to be validated. These benchmark jobs would be used for the labor market studies that would help inform the 

determinations of the rate ranges of pay bands, future adjustments of those ranges, 

and local supplements. 

We were eager to be involved and to communicate with our members who hold 

the jobs in question, because this is such an important key factor in their future 

compensation and we have a lot at stake in ensuring that it be done right. We were 

told that we would be advised of when the workshops would be held. After that 

meeting in October, there was no continuing collaboration meeting until January of 

this year. At that meeting, we were shocked to find that the workshops had taken 

place without us, and that the validation process was going forward without our involvement or the involvement of the employees who actually do the benchmarked 

jobs. 

We were told that the decision to involve us directly in the validation process had 

been reversed. I wrote to the Chief Human Capital Officer objecting to this decision 

and said: 

Not only is this necessary to carry out Congress’ mandate that the new DHS 

personnel systems be designed and implemented in collaboration with us, but 

the credibility of the validation process itself is gravely compromised by the lack 

of involvement of frontline workers. DHS employees already are wary and skeptical about the big changes coming in their pay system. Excluding them is the 

wrong way to get their buy-in and the wrong way to ensure a valid and credible 

product. 

In response, the Chief Human Capital Officer wrote, ‘‘When the time is appropriate, we will share information with AFGE. . .’’ 

Our disappointment and anger with the process of developing MAXHR goes back 

over three years now. We participated energetically on the Design Team, the Field 

Review Team, Focus Groups, Town Hall Meetings, and the Senior Review Committee, only to find proposed regulations published in the Federal Register that ignored almost all of the research, our ideas, and the views expressed by management 

and non-management employees alike. 

We participated vigorously in the Meet and Confer process required by the law, 

only to find our proposals almost entirely ignored in the final regulations. DHS employees, their unions, other employee organizations, and the public sent over 3500 

comments in response to the proposed regulations—it has been acknowledged by 

DHS that the vast majority of them were negative—only to find their views almost 

entirely ignored in the final regulations. This has been collaboration in name only.
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Homeland Security Compensation Committee 

As we have stated, our experience with the continuing collaboration since publication of the final regulations has been that it is cordial and informative, but not the 

substantive involvement we believe Congress meant for this process. In addition to 

our disappointment at not being involved in the early stages of market matching, 

we are deeply concerned about the failure to establish the joint committee that was 

supposed to be overseeing the entire process of designing these systems. The final 

regulations call for a Homeland Security Compensation Committee, which includes 

four Union Officials as members that will: 

. . .provide options and/or recommendations for consideration by the Secretary 

or designee on strategic compensation matters such as Departmental compensation policies and principles, the annual allocations of funds between market and 

performance pay adjustments, and the annual adjustment of rate ranges and 

locality and special rate supplements. 

This Compensation Committee has not yet been established—we have not even 

been made aware of any draft Management Directive establishing its rules or membership. AFGE understands that some of the responsibilities of the Committee will 

come into play later, such as the annual decisions regarding pay adjustments and 

allocations. But we do not understand how or why the Department has been able 

to spend time, resources and money working on compensation matters before a 

Homeland Security Compensation Committee, including the four Union Officials, 

has been established and has recommended to the Secretary the compensation policies and principles that will be the foundation of the system. 

The MSPB submitted a report to the President and Congress earlier this year entitled Designing an Effective Pay for Performance Compensation System. The MSPB 

report discusses the importance of an agency evaluating its readiness for pay for 

performance, including key decision points the agency should consider. These essentially equate to the policies and principles of the system, such as goals—is it to improve organizational and individual performance? Is it to better recruit and retain 

employees? Is it to have a fairer compensation system? Who should be covered by 

the system and will the same system work in all components of the organization? 

Where in the market does the organization want to pay—in the middle or be a market leader? These are just some of the policies and principles the Compensation 

Committee should have considered and made recommendations to the Secretary 

prior to so much work going into designing the system. 

We fear that as we have seen so many times before with the Department’s approach to involving its employees’ representatives, the Homeland Security Compensation Committee will just be a body that rubber stamps the work of the contractors and Human Resources staff, with the union members allowed to submit a minority report that will be ignored.

DHS EMPLOYEE MORALE AT DEVASTATING LOW 

The MSPB report outlines important factors necessary for an organization to succeed in pay for performance. In assessing their readiness for pay for performance, 

the Report suggests that agencies look at whether: 

• Open, two-way communication is valued and pursued. 

• Trust exists between employees and supervisors/managers. 

• Human resources management (HRM) systems such as selection, training, and performance evaluation have clear and consistent objectives and 

support pay for performance. 

• Employee efforts support organizational goals. 

• Work assignment, evaluation of performance, and distribution of awards 

are fair. 

• Assessment of employees is fair and accurate. 

• Employees receive timely, accurate, and meaningful feedback. 

During the Design Team process, the focus groups and Town Hall meetings, the 

comments to the proposed regulations, and in our own more recent meetings with 

our bargaining units, employees of DHS have answered a resounding ‘‘NO’’! And, 

in OPM’s Human Capital Survey of Federal Agencies in 2004, DHS came in last 

of the 30 agencies surveyed on these very factors. The Center for American 

Progress, which analyzed the OPM data, said: 

Less than 40% of the department’s employees agreed or strongly agreed with 

the statement, ‘‘My organization’s leaders maintain high standards of honesty 

and integrity.’’ Less than one-third of the employees agreed that ‘‘Arbitrary action, personal favoritism and coercion for partisan political purposes are not tolerated,’’ while only a little more than a quarter concurred with the statement, 

‘‘In my Organization, leaders generate a high level of motivation and commitment in the workplace.’’
64

Only four in 10 DHS employees felt that they could ‘‘disclose a suspected violation of any law, rule or regulation without fear of reprisal’’ while less than onethird felt that ‘‘Complaints, disputes or grievances are resolved fairly. . .’’ Less 

than half of DHS employees felt that ‘‘Discussions with my supervisor/team 

leader about my performance are worthwhile.’’

It is hard to imagine an organization less well suited to moving to a pay for performance system. Clearly, gutting collective bargaining and diminishing employee 

rights will only push DHS even further in the wrong direction. The Center for 

American Progress goes on to say: 

Managers at DHS appear to have failed completely in developing rapport with 

the agency workforce. The level of employee discontent evidenced by this survey 

creates the type of situation in which those federal workers with the highest 

skill levels, who are most attractive to other employers, are likely to leave the 

department and perhaps the federal workforce.

Concerning the revised personnel rules, the Center said: 

Whatever one might think about the merits of these proposals in theory, it is 

painfully obvious that the enhanced administrative authorities that were granted to departmental administrators were handled poorly, not only to the detriment of DHS employees, but the public, and in particular the taxpayer. 

As mentioned above, our own survey of CBP employees showed the same results 

as the OPM survey. Is it any wonder that morale is so low among DHS employees?

RECRUITMENT AND RETENTION 

When all is said and done, what matters most to the American people is that the 

Department of Homeland Security carry out its critical mission and prevent further 

terrorist attacks on U.S. soil. The details of how that mission gets accomplished 

must be worked out here: in the halls of Congress and at DHS. And we need to 

get it right. 

In our view, most of what has been discussed in connection with the MAXHR program will have the effect of forcing out the longest serving, most experienced and 

most capable individuals now serving in the U.S. government. They will be replaced 

by young and inexperienced people, whose most important skill will be the ease with 

which they fit into the ‘‘command and control’’ environment DHS management seeks 

to emulate. Such a structure may breed good soldiers, but on U.S. borders, the war 

on terrorism is fought best by experienced, independent thinking law enforcement 

officers. 

AFGE proposes a different approach. Instead of forcing a system on employees 

without their agreement, why not try creating a system that maximizes the talent 

and experience of front line workers? Instead of treating people like inanimate gears 

in a machine, why not utilize the common sense, on the ground, day-to-day experience of these men and women to create a truly effective model of government efficiency and effectiveness? Unless there are fundamental changes in the Administration’s approach to managing its employees, both hiring new employees and keeping 

valuable, experienced workers on the front lines will become impossible. These people are free to leave an unsatisfactory situation. It is our job to keep their jobs competitive. 

In that context, it should be noted that as recently as March 27, in an article entitled ‘‘Police Finding it Hard to Fill Jobs,’’ the Washington Post reported that Police 

departments around the country are contending with a shortage of officers and trying to lure new applicants with signing bonuses, eased standards, house down payments and extra vacation time. These benefits and bonuses are all in addition to 

the law enforcement retirement benefits most state and local police departments 

offer. 

In my own travels around the country meeting with DHS employees, I have been 

struck by the extreme difficulty many are encountering in trying to live and raise 

their families in high cost areas on pay that is not competitive. Dedicated employees, who work for DHS, have told me that in order to find affordable housing for 

their families, they are forced to live so far away from their duty stations that they 

live out of their cars for days in order to be at work on time. This is a critical problem that needs immediate solutions, such as housing allowances to attract and retain the workers we need. 

As a first step, AFGE urges this committee to take a hard look at legislation introduced last year by Rep. Sheila Jackson-Lee (D–TX). This bill, H.R. 4044, the 

Rapid Response and Border Protection Act of 2005, would address long-standing 

problems that have hampered the effectiveness of front line Border Patrol Agents, 

CBP Officers and other federal law enforcement employees. It also would allow for 

a new beginning in labor relations with the Department of Homeland Security by 

repealing those sections of the Homeland Security Act that called for the promulga-
65

tion of the MAXHR regulations. This would provide all parties with a fresh start in 

developing a system that can truly be called a visionary plan for the 21st century.

Law Enforcement Officer Status 

The bill includes the text of legislation long advocated by Rep. Bob Filner (D–CA) 

in H.R. 1002 to provide full law enforcement retirement benefits (6c Coverage) to 

all federal officers required to carry a gun and wear a badge. In the case of DHS 

Customs and Border Protection Officers, I can assure you their role goes far beyond 

that. 

According to statistics released by CBP in 2004, in 2003 CBP Officers intercepted 

483 suspected terrorist/security violators, arrested 17,618 criminal aliens, and seized 

72,398 fraudulent documents. In all, CBP Officers arrested and detained over one 

million people seeking to enter the U.S. illegally in that year. Every one of those 

detentions and arrests is fraught with the risk of physical danger, which is why 

CBPOs are armed and fully trained to handle dangerous situations. It is also why 

the names of forty-three courageous U.S. INS and Customs Inspectors are on the 

wall memorializing federal law enforcement officers killed in the line of duty. It is 

unconscionable for CBPOs, who are armed, enforce federal law, and have arrest 

powers, to be denied law enforcement officer status for retirement purposes.

Equipment, Training, and Working Effectively 

H.R. 4044 also includes a long list of items that will guarantee that U.S. Border 

Patrol Agents and CBP Officers are the best equipped, best trained, most experienced and most motivated work force in the U.S. Government. These include: • Improved body armor, weapons, night vision goggles and other equipment 

necessary to carry out the work of federal law enforcement officers responsible 

for defending the borders; 

• Improved training and operational facilities designed to effectively integrate 

the large numbers of new hires expected in both the Border Patrol and among 

CBP Officers; 

• Repeal of the Administration’s failed ‘‘One Face at the Border’’ initiative, 

which is based on the false assumption that the complex laws and regulations 

for customs, immigration, and agriculture products can be easily administered 

by the same people; and 

• Elimination of the fixed deployment strategy in which Border Patrol Agents 

are deployed to fixed positions and required to remain in place regardless of 

what they observe in their area of operation.

Other Than Permanent (OTP) 

OTPs are employees of long-standing, who work part-time schedules and fill in 

when needed because of high workloads or to allow full-time employees to take vacations or deal with family needs. Some of them came out of Customs while others 

were former Immigration and Naturalization Service employees. There are about 

500 of these employees across the country. They are paid at a lower grade than the 

full-time employees, and some have other jobs. They are experienced and dedicated 

and provide an invaluable service by coming on board when needed to relieve fulltime employees or augment their number. CBP is attempting to do away with these 

employees, forcing them to be retrained for jobs they are already doing and putting 

them in permanent jobs that many do not want. By doing this, CBP is hurting these 

valuable employees, making it harder for full-time employees to take vacations 

when it works for them and their families, and removing a workforce that actually 

helps CBP be more flexible. This is wrong. OTPs should be kept on and allowed to 

continue to do the work they have been doing. 

Taken together, these provisions will move us a long way toward what we need 

to achieve at the Department of Homeland Security ? a Federal agency that carries 

out its most critical mission and prevents future terrorist attacks on U.S. soil.

‘‘One Face at the Border’’

CBP has attempted to establish what it calls ‘‘One Face at the Border.’’ The idea 

was to take the experience and skills of former INS, Customs and Agriculture employees and combine them into one position. In reality, this has been difficult to 

do—each discipline is very complex—combining them threatens to weaken expertise 

in all three. In fact, we are starting to see CPB Officer positions offered with specialties in, for example, Immigration law—a tacit recognition of the need for the experience and education of these legacy organizations. 

Although on paper DHS advocates for ‘‘one face’’ at the border, many of its actual 

personnel practices continue to emphasize the differentiation between ‘‘legacy INS’’ 

and ‘‘legacy Customs’’ officers. Instead of raising CBP employees to the best of the 

various benefits they enjoyed before, DHS has created a confusing morass of procedures and policies that take away income and rights without replacing them with 
66

anything of comparable value. CBP Officers may be called ‘‘One Face at the Border,’’ 

but they are acutely aware that they are not treated equally, nor do they share the 

same benefits. For example: 

• Foreign Language Award Program (FLAP)—AFGE recently filed two 

grievances on behalf of employees who are not receiving additional pay for having foreign language skills. The Foreign Language Award Program guarantees 

foreign language proficiency pay for those employees who use language skills 

on the job in languages other than English. While many officers from legacy 

Customs have been awarded foreign language pay, the majority of legacy INS 

officers have not. 

• Administratively Uncontrollable Overtime (AUO)—When DHS consolidated different groups of employees it re-classified former INS Senior Inspectors 

as CBP Officers and eliminated their right to a lump sum payment for working 

overtime. Although the Senior Inspectors? duties have remained the same, their 

pay has been drastically reduced. 

These are just a couple of examples of the differences CBP employees continue 

to see in their work places, while they are told they are ‘‘One Face on the Border.’’

TRANSPORTATION SECURITY ADMINISTRATION (TSA) 

After September 11, 2001, the Bush Administration reluctantly agreed that the 

terrorist attacks necessitated federalizing airport security functions, but they also 

insisted that the legislation not allow security screeners the protections normally 

provided to federal employees. Consistent with this position, then Under Secretary 

of TSA Admiral James Loy issued a decision on January 8, 2003 which denied the 

right to collective bargaining to all federal airport security screeners. AFGE subsequently filed suit in federal district court to protest this action, but the courts have 

to date upheld the Bush Administration. TSA was given the ability to prevent independent oversight of decisions affecting employees, which has left workers with no 

alternative but to seek remedies from the very management that created the problem in the first place. The power of TSA management is almost totally unchecked. 

A statutory footnote in the legislation creating TSA and federalizing the jobs of 

airport screeners, the Aviation and Transportation Security Act (ATSA), allows the 

TSA Administrator to create unique personnel policies for the largest portion of the 

TSA workforce?42,000 airport screeners. Striking examples of the pervasiveness and 

extent of airport screeners? lack of labor rights include: 

• TSA’s refusal to honor the First Amendment right of freedom of association, 

resulting in screeners being fired for simply talking about the union and posting 

and distributing AFGE union literature during break times. 

• TSA has refused to hold itself accountable to the Rehabilitation Act and is 

therefore not required to make reasonable accommodations for workers with 

disabilities. This results in discrimination against workers on the basis of their 

disability. 

• Although Congress clearly indicated that the veteran’s preference honored by 

the rest of the federal government also applied to screeners, the TSA has failed 

to apply veteran’s preference in promotion and reduction-in-force decisions. 

Moreover, even though other federal agencies apply the veteran’s preference to 

both those who retired from the military and those who leave active duty, TSA 

has redefined what it means to be a veteran—only retired military personnel 

are awarded whatever veteran’s preference TSA management chooses to give. 

• Disciplining screeners for using accrued sick leave benefits for documented illnesses. 

• Paying screeners thousands of dollars less than promised at the time of hire, 

because screeners do not have an employment ?contract? with the government, 

and therefore, no contract protections. 

• Denial of enforceable whistleblower protections. 

TSA has argued in federal court, before the Federal Labor Relations Authority, 

and before the MSPB that the language of the footnote does not require the agency 

to follow the FAA personnel policy or later, after becoming part of DHS, the DHS 

personnel system with respect to airport security screeners, the overwhelming percentage of the agency’s workforce. It is impossible that any legitimate security consideration precludes airport screeners from enforcing their labor rights when current law allows privately—employed airport screeners performing the same duties 

the protection of the very labor laws denied federal airport screeners, including the 

right to bargain collectively. Even though federal airport screeners are denied the 

ability to bring workplace disputes before the MSPB for a fair hearing by a neutral 

third party, their management supervisors—from screening managers to Deputy 

Federal Security Directors to Federal Security Directors themselves—can readily 

avail themselves of the due process afforded by the MSPB. 
67

Screeners should be guaranteed the same workplace securities that other DHS 

employees and other federal employees enjoy. Denial of the meaningful ability to enforce the most basic of worker rights and persistent inadequate staffing have taken 

their toll on the screener workforce. Screeners are subject to extensive mandatory 

overtime, penalties for using accrued leave and constant scheduling changes because 

of the failure of the TSA to hire adequate numbers of screeners. It is not surprising 

that TSA has among the highest injury, illness and lost time rates in the federal 

government. In fiscal year 2004, TSA employees? injury and illness rates were close 

to 30%, far higher than the 5% average injury and illness rate for all federal employees. As a result of continuing mistreatment of the screener workforce, the ability 

of screeners to do their jobs is greatly hampered, and public safety jeopardized. 

Without the comprehensive protections offered by labor laws—including the right to 

bargain collectively, an established personnel system, and the right to an independent review of adverse personnel actions—airport screeners are subject to the 

often arbitrary and constantly changing personnel policies dictated by the Federal 

Security Directors working at 425 airports across the country. Congress should repeal immediately the ATSA footnote and restore to federalized screeners the labor 

rights afforded to all other federal workers—at the very least, they should have the 

same rights as all other DHS employees.

FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) 

Currently, FEMA is bearing the brunt of harsh criticism for its response to Hurricane Katrina. There are even calls for it to be dismantled. In 1992, FEMA came 

under attack for its handling of Hurricane Andrew. Instead of being dismantled 

then, a professional emergency manager, James Witt, was appointed to rebuild the 

agency. Witt turned the agency around. In fact, the name ‘‘FEMA,’’ which had come 

to symbolize incompetence and bureaucracy at its worst, soon came to denote excellence in the public’s mind. FEMA was used as an example of a high-performance 

agency and Witt was invited to speak about the remarkable transformation of his 

agency at conferences. 

What are the factors that Witt used to build an effective, responsive agency that 

worked so well? Here are a few: • Disaster prevention, preparedness, response, and recovery were grouped together in one agency so that staff of those functions could quickly work together 

in a crisis. 

• The top positions at FEMA were held by experienced emergency managers. • The Federal Response Plan was clearly written in plain English and allowed 

FEMA to draw on every agency of the Federal Government in an emergency. 

• The FEMA Director had direct access to the President. • An emphasis was placed on training and keeping experienced staff who would 

be ready to respond to an emergency on a moment’s notice. 

There is no doubt that more recently there has been a crisis of leadership at 

FEMA. It is this crisis that led to the woefully inadequate response to Hurricanes 

Katrina, Rita and Wilma last summer. It is also true that many FEMA employees 

are demoralized and some have left. But the agency still is staffed by some of the 

most dedicated, motivated, and talented professionals in government, who want to 

be able to do their jobs and protect American lives and property. 

We know what works. We saw what was able to be done in the 1990’s. Rather 

than do away with FEMA, we should restore it to its past excellence by getting it 

out of Homeland Security, making it an independent agency, and giving it the leadership and resources it needs to once again be a model government agency.

CONCLUSION 

AFGE calls on Congress to restore to DHS employees the important rights and 

protections eliminated by the new personnel regulations promulgated by the Department. In particular, we urge you to restore due process and collective bargaining 

rights to DHS employees. In addition, Congress must ensure that overall pay levels 

for DHS employees are not reduced compared to those under the General Schedule 

in other federal agencies. 

It would be a grave mistake to view the new DHS personnel system regulations 

simply as an arcane set of rules governing such mundane issues as pay rates, civil 

service protections and collective bargaining rights for employees. To do so greatly 

diminishes the importance of these changes on the readiness of the nation to prevent another terrorist attack or respond to natural disasters like Hurricane Katrina. 

Unlike most federal agencies, the core mission of DHS is the safety of the American 

public, and the fundamental changes to the personnel system for DHS workers must 

be viewed through that prism. The funds going to develop and implement MAXHR

would be far better spent ensuring adequate staffing, training, and equipment to 

protect public safety. 
68

Without a doubt, dedicated and experienced personnel are America’s most invaluable resource in the war on terror. No technology can replace their perseverance, 

expertise, and ingenuity. Keeping these employees motivated to remain in the service of our country is not simply a matter of fairness to them, but is also absolutely 

essential to the protection of our nation against the threat of terrorism and the consequences of natural disasters. The new DHS personnel system completely fails to 

achieve that goal and it must be repealed or substantially modified by Congress in 

the interest of homeland security.

Mr. ROGERS. The Chair now recognizes Mr. Charles Tiefer, professor of law at the Baltimore School of Law, for his statement. 

Welcome. 

STATEMENT OF CHARLES TIEFER 

Mr. TIEFER. Thank you, Mr. Chairman, and I thank the committee for the opportunity to testify. 

I have written on Federal personnel and procurement policy as 

a professor for the last 11 years, and for the 11 years before then 

I was acting general counsel and solicitor of the U.S. House of Representatives and took part in oversight on personnel and procurement such as you are doing today. 

For this testimony I reviewed many studies, including the scholarly studies about pay-for-performance implementation, and these 

showed four major ways that the problem of creating an entirely 

new procurement system, MAX HR, from scratch sets back integrating DHS. And some of them have been talked about by the first 

panel already today. 

First, MAX HR throws away one of the few aspects that the diverse unit that came together in this Department had in common. 

To the extent relevant, they were all under the same governmentwide personnel system, the General Schedule, the GS, and that 

was and has been a unifying element. MAX HR will take away the 

unity, the transparency and the security of having that particular 

consistent personnel system, and, instead, the employees will receive a bewildering and insecure for them personnel policy situation. 

Second, DHS has larger organizational problems that it should 

be paying attention to, and that will keep it from being able to implement anything as challenging as MAX HR. The statements 

about the high level of management vacancy by the Chair and by 

the Ranking Member and the questions of the first panel show that 

you are already on top of this, and I don’t even need to say what 

I have intended to say. They have a big problem in filling management vacancies, and they should be paying attention to that rather 

than changing their personnel system. 

Third, MAX HR is trying to launch pay-for-performance without 

many of the elements that are needed for success of such a system. 

I have cited in my testimony the leading survey by the Kennedy 

School of Government of the literature on the subject of pay-forperformance. These are elements like a period of mission stability 

to develop a set of performance criteria and to work them out between managers and employees so that they will address the employees’ very natural concerns of shifting to this. DHS is the opposite of a stable situation where that can be worked out. 

And fourth, MAX HR is drawing away the vital, but limited, attention and funding that DHS managers can devote to personnel 
69

1These include sections of GOVERNMENT CONTRACT LAW: CASES AND MATERIALS 

(Carolina Academic Press 2d edition 2004)(co-authored with William A. Shook). In 1984–1995 

I was Solicitor and General Counsel (Acting) of the U.S. House of Representatives, and participated in numerous oversight investigations of federal personnel and procurement policy.

needs. And the questioning by the members of this committee of 

Mr. Prillaman brought that out very strongly. The particular example that I focus on is procurement officers. It is the area of law that 

I specialize in. 

During your questioning, Mr. Prillaman admitted that they are 

trying to find procurement officers to hire. I will tell you I have 

been hearing this for years now. DHS has been saying for years—

it is going to almost sound like they have been saying it before it 

was DHS. Let’s just say for as many years as it has been DHS, 

they have been saying, we are trying to hire, we are trying to hire, 

and they have not made progress. I have some statistics I brought 

together in my testimony that show that they are extremely thin, 

that they have a much lower ratio of procurement officers to millions of dollars spent on procurement than comparable agencies. So 

they can’t do oversight, they can’t do competition when they let out 

contracts, they can’t do oversight when they bring them in. That 

is what they need to be spending their personnel attention on. 

I ticked off a few of the striking examples of procurement problems in DHS. The fact that FEMA had to partly abdicate its procurement to the Department of Defense after Hurricane Katrina. 

The eMerge2 problem that this committee studied; the TSA’s billion-dollar telecom contract with Unisys that was ended last December because, in short, it was a flop, and the $3.3 billion ACE 

system for Customs, which is long overdue and has cost overruns, 

that is what they need be to turning their attention to. 

Thank you, Mr. Chairman. 

Mr. ROGERS. I thank you. 

[The statement of Mr. Tiefer follows:]

PREPARED STATEMENT OF PROFESSOR CHARLES TIEFER

CONTINUING ON WITH MAXHR WOULD FURTHER SET BACK THE 

CHALLENGE OF PULLING DHS TOGETHER 

Thank you for the opportunity to testify on the subject of the human capital 

issues in the Department of Homeland Security (DHS). I am Professor of Law at 

the University of Baltimore Law School since 1995, and the author of a number of 

pertinent law review and journal studies, and book sections, on federal personnel 

and procurement policy.1

I. Executive Summary 

II. MaxHR Will Set Back DHS Integration 

III. Hiring and Training at DHS, Especially As to DHS’s Troubled Procurement, 

Could Use the Attention and Funding Overly Diverted to MaxHR.

I. Executive Summary 

DHS faces a central daunting challenge of ‘‘integrating’’ itself—pulling itself together from many units—in just a few years. DHS is the largest department to come 

together since the Department of Defense in the late 1940s, and it consists of almost 

a dozen principal units of different natures originating in many different departments. Recent developments have made increasingly clear how seriously it sets DHS 

back in this goal of integrating itself, to saddle DHS also with the problem of creating a wholly new personnel system, MaxHR, based on pay-for-performance, from 

scratch. 

For this testimony, I have reviewed a number of studies of DHS by the DHS Inspector General, the General Accounting Office, and outside observers, as well as 

the scholarly studies of pay-for-performance implementation. These show that 
70

2 A good review of how the General Schedule works is in Major John P. Stimson, 

Unscrambling Federal Merit Protection, 150 Mil. L. Rev. 165 (1995). 

MaxHR and DHS have recently shown many problematic aspects which mean that 

implementing MaxHR has been, and will be, particularly setting back the task of 

integrating DHS. First, MaxHR throws away one of the few aspects that all the diverse precursor units of DHS have in common: all those units, to the extent relevant, were hitherto under the same government-wide personnel system, the ‘‘General Schedule’’ (GS) for the civil service.2 By continuing on with MaxHR, DHS 

throws away that one unifying constant, and obliges its employees to set off on a 

bewildering and insecure personnel policy venture. Second, MaxHR tries to launch 

pay-for-performance in a situation missing many of the elements needed to have any 

chance for even minimal success, like a period of mission stability to carefully develop performance criteria, and to work them out between managers and employees 

so as to damp down the employees’ very natural concerns about the dangers of arbitrary and even punitive pay changes. 

Third, MaxHR draws away precisely those resources—the vital but limited attention and funding that DHS managers can devote to personnel matters—that DHS 

desperately needs to use, not to redo the existing pay system, which is not a particular priority, but to fill serious shortfalls in training and hiring, which should 

have the highest priority. Fourth, the increasingly delays as the courts throw out 

some flatly illegal aspects of MaxHR mean it has become an even more long-lasting 

source of uncertainty and morale damage in DHS than ever imagined. 

These problems and drains by MaxHR fall upon a department experiencing many 

other problems, doubling the downsides. For example, DHS, particularly in certain 

of its most critical subunits, is suffering a major problem with management vacancies. Take a look at the FEMA organization chart and count the boxes essentially 

vacant and just occupied by acting figures, from the (Acting) FEMA Director himself 

not yet confirmed by the Senate, and his empty chief of staff post, to the acting directors of the recovery and response divisions and five of the ten regions. Who can 

afford attention and funding to reinvent the pay system in a department when there 

are so many vital posts that do not even have anyone with more than ‘‘acting’’ status occupying them? 

To address DHS’s situation concretely, I have chosen to use the big-money subject 

of DHS’s procurement, and how it has fallen prey to dysfunctional management and 

workforce problems, to illustrate how little DHS can afford to squander its limited 

personnel policy resources on MaxHR and how much it should focus instead on the 

urgent needs of hiring and training. A number of studies and investigations of 

DHS’s procurement have shown the prevalence of those urgent needs: shortages of 

personnel, inadequacies of training, weak project management, and a feeble Central 

Procurement Office. The procurement problems particularly show up from reviewing 

some particular examples: FEMA’s having had to abdicate procurement, partially, 

after Katrina; the fiasco of e-Merge2, the department’s computerized finance system, 

as to which the contractor was recently discontinued; excessive contracts with Alaska Native Corporations, which reflect at best a slack attitude toward competition, 

if not a thinly-disguised effort at sole-sourcing; and the delay and schedule overruns 

with ACE, Customs’ $3.3 billion long-overdue IT system. These all reflect a department struggling, with a lot of failures, to do its own competitive procurement. What 

DHS procurement shows is that if ever a new and struggling department could ill 

afford to squander the attention and funding on an ideological venture like MaxHR 

that ought to be going to hiring and training in needy areas like procurement, DHS 

now is that department.

II. MaxHR Will Set Back DHS Integration

A. Deployment of MaxHR Will Do the Opposite of Its Main Claim: Far From Helping to Unify a Diverse Department, It Will Fragment One of DHS’s Existing Unities

The proponents of MaxHR argue that it will help unify a diverse department. By 

making its nine occupational clusters, such as technical or law enforcement, the unit 

of pay-banded personnel treatment, MaxHR is supposed to ‘‘build a unified DHS culture,’’ as the DHS Chief Human Capitol Officer puts it. 

There was always less to this claim than meets the eye. Before units came from 

different departments into DHS, there were many disparate aspects of their culture 

and nature. But, they had an existing unity by their civil service being classified 

on the government-wide General Schedule. To be specific: units such as what is now 

Customs and Border Protection, and what is now Immigration and Customs Enforcement, were created by merging elements of the Justice Department and the 

Treasury Department. These elements certainly had many dissimilarities. But, their 

managers and employees shared the common understanding of how the General 
71

3From DHS, ‘‘Overview of the MaxHR Human Capital Program’’ (May 2006). 

4 Iris Bohnet & Susan C. Eaton, Does Performance Pay Perform? Conditions for Success in the 

Public Sector, in John D. Donahue and Joseph S. Nye Jr., eds., For the People: Can We Fix 

Public Service? (2003). 5 Id. at 250. 6 Id. at 246. 

Schedule worked, what it meant for their prospects for pay increase and promotion, 

and how to compare status when put together on assignments. In other words, a 

GS–12 from one unit might have many challenges figuring out how to work with 

a GS–13 from another unit, but at least they each understood relatively well where 

the other fit in the personnel system, and what it would take for the GS–12 to ascend in pay to be in line with the GS–13. MaxHR does not create unity and integration, it fractures one of DHS’s existing unities. The predictability and structure of 

the existing personnel systems, which could translate via the GS’s universal language, will now yield to a babble of uncertainty and confusion both within and between units. 

Now, however, the plan for deployment of MaxHR prepared by the DHS CHCO 

shows that MaxHR will not even replace the existing unity of the General Schedule 

with a new unity, but only with disunited pieces. Of 185,000 DHS employees (when 

the department was formed), MaxHR will only apply to about 84,000.3 It will not 

apply to the TSA screeners; some staff at FEMA; the Secret Service’s uniformed division; or the Coast Guard’s military personnel. Moreover, it will not apply to the 

SES employees, who have an existing system separate from the General Schedule. 

So, MaxHR will ‘‘unify’’ less than half of DHS. That is more fragmenting than unifying. 

For those provisions involved in the pending litigation, the disunity is even greater. Most observers assume that Judge Collyer’s ruling, which I found fairly straightforward as statutory interpretation, will be largely affirmed on appeal. In that 

event, the rollout of MaxHR’s aspects related to labor bargaining, and adverse actions and appeals, will be limited. The Phase I rollout of MaxHR in 2006–2008 to 

HQ, FLET, ICE, and USCG will extend those limited aspects (the ones struck down 

by Judge Collyer) only to 15,000, with the aspects that apply more generally including pay-banding, extending to 25,000. The Phase II rollout of MaxHR in 2007–2009 

to CBP, CIS, FEMA, and USSS will extend those limited aspects (again, the ones 

struck down by Judge Collyer) only to 20,000, with all aspects, including pay-banding, extending to 59,000—for a total over the two phases, as to the more generally 

applying aspects, including pay-banding, of 84,000. Thus, of the less than half of 

DHS which will have MaxHR, only a fraction will have the aspects challenged in 

the litigation; and all this will be coming in different ways to different units at different times. MaxHR is an engine for disunity.

B. DHS Increasingly Shows Itself the Worst Place to Experiment with Pay-forPerformance on a Large, Unheralded Scale 

The policy studies on pay-for-performance show many reasons for caution, and 

many specific conditions needed for it to succeed, while DHS increasingly shows 

itself the worst place to experiment with meeting those conditions. A comprehensive 

review of the literature was done in 2003 at the Kennedy School of Government at 

Harvard by two leading professors.4 The Kennedy School review concluded that the 

‘‘conditions’’ for ‘‘[p]ay for performance’’ to be effective ‘‘are often not met in the public sector, in part because of the complexity of the typical government product. . . .the increasing role of. . . cross-agency collaboration, and the social comparisons and internal motivational dynamics of. . .public employees in particular.’’ 5

What could provide more ground for doubting the conditions for pay for performance 

to be effective will be met, than the conditions today at DHS? DHS has an immensely complex product to produce—not goods or even simple services, but the 

complex balance of multiple missions of, say, a customs inspector (who will now 

have immigration duties too) or a Secret Service officer. Cross-agency collaboration 

is a basic part of the work of many in DHS. And, the motivational dynamics at DHS 

depend heavily, not upon a pure piecework-minded interest in wages, but upon precisely the ‘‘public service motivation’’ as to which the Kennedy School review said 

‘‘the reduction of intrinsic motivation through performance-based pay will be a correspondingly bigger problem.’’6 DHS is the poster-child example of the place not to 

launch a sweeping experiment with pay-for-performance. 

Let us look at just how DHS plans to implement MaxHR. DHS holds out no promise that it will obtain large appropriated sums to provide MaxHR performance bonuses, and also offers no protection against denials of bonuses or even individual 

pay cuts. Moreover, DHS units include a fair fraction of relatively senior personnel 

who are already at the upper end of their civil service pay. This gives little reason 
72

7 Id. at 248. 8Florence Olsen, ‘‘Ticked Off’’ About Pay at GAO, Federal Computer Week, May 15, 2006. 9Stephen Barr, Pentagon Workers Able to Get a Boost Under New Pay Tables, Wash. Post, 

May 11, 2006. 10Department of Homeland Security Learning and Development Strategic Plan. 11General Accounting Office, Department of Homeland Security: Strategic Management of 

Training Important for Successful Transformation (Sept. 2005). 12 Airport Screeners Need to Be Empowered, Not Privatized, Government Employee Union Says,

47 Gov’t Cont. 243 (May 25, 2005). 

for DHS’s vital experienced echelons to think that pay scale conversion to MaxHR 

will precede pay raises. If anything, MaxHR could well generate an exodus from 

DHS of such experienced employees. That exodus might be the kind of development 

welcomed in the private sector, where offloading experienced employees from denial 

of pay raises, and even pay cuts, can raise profit margins by cutting payrolls and 

replacing senior better-paid employees with junior low-pay ones. However, I seriously doubt whether America will feel safer if MaxHR has that same effect, i.e., less 

and less experience, and more and more turnover, in its customs and immigration 

inspectors or in those backing up its Coast Guard or handling emergencies at 

FEMA. 

The current implementation process for MaxHR is particularly worrisome because 

it is so divorced from employees. DHS has been devoting about $30 million/year to 

the contract with Northrop Grumman and others to devise the system, an amount 

cut back from what it requests from appropriators—leaving little reason to think it 

will have large amounts in hand left over for bonuses. Incidentally, this particular 

contract was set up as a BPA, a very open-ended basis which means it may well 

siphon off an increasing share of the funds needed to try to reduce MaxHR’s intrinsic unattractive risks for DHS employees. Northrop Grumman is, of course, one of 

the Big 3 defense contractors. It has been trying to parlay its experience just as a 

producer of hardware like airplanes for federal defense into handling other matters 

as well. So it does not bring any long history of experience, or a rich network of 

contacts, with the personnel systems of Immigration and Customs Enforcement, or 

Customs and Border Protection, or FEMA. 

The Kennedy School review found that ‘‘[e]mployees feel losses with disproportionate intensity,’’ just as they feel about comparisons with peers whose pay rises 

while theirs does not. There is a grave risk in public organizations that ‘‘performance can be negatively affected if the process through which the outcomes are 

achieved is perceived as unfair.’’ 7 Two press reports just this week highlight this 

problem in trying to have pay-for-performance for federal agencies. The new payfor-performance system at GAO received adverse comment, because of the negative 

evaluations: ‘‘25-year GAO veterans feel insulted and unappreciated by a ranking 

system that implies that half of the analysis in his cohort are performing below a 

satisfactory level despite receiving good performance evaluations.’’ 8 At the Department of Defense, according to a report in the Washington Post’s Federal Diary column, the pay conversion tables have created a ‘‘tricky’’ problem about ‘‘the perception of equity in the workplace’’ because it limits some converted GS–14s (supervisors) to $106K while other converted GS–14s (technical experts) may earn close 

to $125K.9 In sum, the Kennedy School review was on solid ground in foreshadowing that the shift to pay-for-performance being devised by Northrop Grumman may do more harm than good to DHS employee morale and performance. 

III. Hiring and Training at DHS, Especially As to DHS’s Troubled Procurement, 

Could Use the Attention and Funding Overly Diverted to MaxHR. 

A. Training, Hiring, and Other Personnel Needs as to DHS Procurement Compete 

with MaxHR 

The real cost of MaxHR to DHS can only be appreciated from seeing DHS’s other, 

more pressing needs for the scarce attention and funding for personnel matters 

spent on changing the pay system. Let us start with the training shortage. DHS did 

accomplish the making of a human capital strategic plan, in October 2004, and a 

departmental training plan, in July 2005.10 However, this dealt largely in generalities: as a GAO evaluation found, ‘‘The DHS training strategic plan contains few 

specific performance measures for its goals or strategies and all of these are output 

measures.’’ 11

Meanwhile, a tour through DHS turns up many training or hiring shortfalls: 

—A 2005 report by the DHS Inspector General said the Transport Security Administration must improve its training for airport screeners.12 A TSA training 

program for screeners was handicapped, a GAO study found, by insufficient 
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13GAO, Aviation Security: Screener Training and Performance Measurement Strengthened, but 

More Work Remains (May 2005). 14The GAO report was classified. It was first aired on NBC Nightly News on March 16, 2006, 

followed by a number of print press discussions. See http://www.msnbc.msn.com/id/11878391/; 

Critics: Mismanagement to Blame for TSA Lapses, Federal Times, March 27, 2006, at 8. 15DHS OIG, Major Management Challenges Facing the Department of Homeland Security

(Dec. 2005), at 112. 16 Aimee Curl, Senate Panel Unlikely to Recommend Taking FEMA Out of DHS, Federal 

Times, March 13, 2006, at 9 (discussing testimony at Senate hearing about the need for better 

FEMA training); Stephen Losey, FEMA Ignored ’04 Memo, Lost Ground in Katrina Response,

Federal Times (Dec. 12, 2005), at 4 (discussing testimony that a FEMA coordinating officers had 

circulated a June 2004 memo that ‘‘raised concerns that FEMA’s national emergency response 

teams were unprepared and ill-trained’’). 17Mollie Ziegler, Federal Volunteers Cite Flaws in Katrina Effort, Federal Times, Jan. 30, 

2006, at 1 (about faulty training given to volunteers from DHS and from other agencies to help 

after Katrina). 18DHS OIG, A Performance Review of FEMA’s Disaster Management Activities in Response to 

Hurricane Katrina 122 (March 2006). 19DHS OIG, Department of Homeland Security’s Procurement and Program Management Operations (Sept. 2005), at 2, 20. 20 Id. at 3. 21Developments: Rules on Blended Workforce Lack Clarity, Acquisition Experts Say, 42 Gov’t 

Cont. para. 473 (Nov. 9, 2005). 

staffing at many airports coupled with a lack of high-speed Internet availability.13

—The GAO found bomb-making materials could be sneaked thru all 21 airports 

tested, suggesting screeners were not receiving the right kind of training (or 

equipment).14

—A report in December 2005 report by the DHS Inspector General on DHS’s 

major management challenges found that DHS had ‘‘a shortage of certified program managers to manage the Department’s 110 major programs.’’ 15

—Studies by the GAO, the DHS IG, Congressional committees,16 and the 

press 17 all found striking training deficiencies underlying FEMA’s flawed response to Hurricane Katrina. Notably, an April 2006 comprehensive IG study 

found a steep decline in FEMA top-level training: ‘‘Overall, FEMA enrollments 

in professional developed courses, which include leadership and managerial 

training, decreased significantly in the past ten years. For example, in 2005 

only 25 percent of its employees were enrolled in such programs when compared 

to 1995 levels.’’ 18

Procurement is a legitimate focus for looking at personnel problems at DHS, considering the scale of DHS’s procurement activity—DHS purchased almost $9.8 billion of goods and services in fiscal year 2004, in almost 60,000 procurement actions 

(not including credit card buys).19 The DHS IG found: ‘‘DHS’s close relationship 

with the private sector resulting from its many partnership arrangements, raises 

concerns that the minimal initial and annual Government ethics training may be 

insufficient to address standards of conduct issues as they apply to procurement.’’ 20

A well-known former senior procurement figure of the current Administration, Angela Styles (formerly administrator of the Office of Federal Procurement Policy), told 

of an experience as to how weak DHS training was leading to weak DHS ethics: 

Styles recounted her experience with an employee from a large IT firm who, 

while meeting to discuss the company’s bid for a Department of Homeland Security contract, mentioned casually that he had drafted the DHS statement of 

work. ‘‘Everybody in the room except this person was shocked,’’ Styles said. 

‘‘They knew it was a problem for the same company to draft the statement of 

work and bid on the contract.’’ . . . . DHS needed the contractor to draft its 

statement of work, according to Styles, because no federal employee was capable 

of drawing specifications for the particular IT project.21

Some may question whether to view MaxHR as truly competing with hiring and 

training for scarce personnel resources at DHS. Unfortunately, there is no other way 

to view the radical step of replacing the existing personnel system with a new one, 

particularly a new one that is intensely draining, both permanently and especially 

in its initial years, of supervisors’ attention. MaxHR requires both supervisors and 

employees to be quite re-trained, the supervisors in how to rate and to communicate 

with employees so that the pay-controlling performance ratings will generate the 

least friction, the employees so that they will accommodate themselves to the 

strange new system. 

Moreover, as it goes into effect, MaxHR requires supervisors to give high levels 

of attention to the kind of rating and communication required for pay decisions. In 

fact, an article this week noted that supervisors at the Defense Department thought 
74

22Leslie Wayne, Expedited Contracts for Cleanup Are Testing Regulations, New York Times 

(Sept. 13, 1005), at C4. 23Kevin McCoy, Contract for Portable Classrooms Scrutinized, USA Today (Oct. 21, 2005), at 6b (contract review requested of GAO for $39.5 million no-bid Katrina contract; Army Corps 

passed up local contractors willing to supply the classrooms for half the price, in favor of Alaska 

Native Company). 24 Renae Merle, 4 Firms Hired to Clear Debris in Gulf Coast, Wash. Post (Sept 16, 2005), at 

A20. 25 Chris Gosier, OMB Eyes Hurricane Relief Contracts, Federal Times (Oct. 17, 2005), at 4. 26DHS OIG, Department of Homeland Security’s Procurement and Program Management Operations (Sept. 2005), at 7. 27 Id. at 7. 28 Id. at 7. 29 Id. at 8.

they should get a pay raise just for the increased amount of such supervisory work 

the new system demanded. Supervisors and employees alike have just so many 

hours in the week for training and personnel matters apart from their regular work. 

They can either spend them training and dealing with MaxHR, or, they could spend 

them on training and hiring for such needs as screeners’ need for more security 

training on bomb-making materials, FEMA officials’ needs for more training on 

emergency handling, or contract managers’ need for more training on competitive 

and ethically honest procurement.

B. Dysfunctional Procurement 

A few concrete examples will show the kinds of dysfunctional procurement at 

DHS resulting from its deficit of hiring and training. 

Quite a number of hearings have already been held just on the procurement problems in FEMA’s response to Hurricane Katrina. In the week after the hurricane, 

FEMA awarded a series of large no-bid contracts (on the order of $100 million) to 

companies with political connections. Thereafter, FEMA began shifting the burden 

of a sizable amount of its contracting to Defense Department personnel, in two respects. It immediately turned $1.5 billion in contracting over to the Army Corps of 

Engineers,22 ostensibly involving engineering, although it also turned out to involve 

basic commodities and even portable classrooms.23 And, the Army Corps tapped into 

contracts of other military services.24 Second, the Defense Department assigned 

some contract management support staff to FEMA.25 FEMA simply could not do its 

procurement job; it had to turn its job over to the Defense Department. 

Some might excuse that as just a super-emergency situation, not representing a 

DHS problem with broader implications. However, the indications in the studies by 

the DHS Inspector General of the procurement personnel problem are that this 

problem is hardly isolated. For its September 2005 study of procurement operations, 

the DHS IG compared levels of procurement staffing among the different units of 

DHS, and between DHS and other departments. It found average procurement 

spending per employee ratios, according to two outside studies, of $5.3 million (one 

study), or alternatively $6.3 million to $8.8 million (another study), in other federal 

agencies with similar buying profiles. ‘‘DHS’ average spending per procurement employee of $12—$13 million is significantly higher than either of these studies with 

some DHS offices spending an average of $25—30 million per person.’’ 26 That is an 

alarmingly thin level of DHS procurement personnel. 

The DHS IG confirmed the disturbing implications of this inadequate level of 

DHS procurement personnel from what he had been repeatedly told by the procurement personnel themselves. ‘‘Many procurement offices have reported that their lack 

of staffing prevents proper procurement planning and severely limits their ability 

to monitor contractor performance and conduct effective contract administration.’’ 27

Adding to the dangers of DHS’s inadequate procurement workforce is DHS’s inadequate Office of Chief Procurement Officer (OCPO). The subheading of the September 2005 DHS report on this subject says it all: ‘‘OCPO Lacks Sufficient Staff 

and Authority to Conduct Effective Oversight.’’ 28 At one recent time, the GAO found 

that OCPO had only two people to conduct oversight on the eight separate procurement offices in DHS. It was supposed to obtain five more, but even if that occurs, 

both GAO and IG found that OCPO ‘‘has unclear authority to ensure compliance 

with DHS procurement policies and procedures.’’29 So, the move to MaxHR means 

DHS management must devote its precious capacity to exert central leadership to 

changing the department’s personnel/pay system, instead of trying to get oversight 

over a set of overwhelmed very-high-risk non-centrally-supervised procurement offices handling large sums of money. 

C. Examples of Procurement Workforce Problems, Outside FEMA 

eMerge2
75

30 By Sarah Posner, in The American Prospect (Jan. 2006). 31 Id. 32 Id. 33 Id. 34Paul de law Garza, Critics Question Federal Contract, St. Petersburg Times, Oct. 7, 2004 35Wilson P. Dizard III & Mary Mosquera, ERP’s Learning Curve, TechNews (Feb. 16, 2006). 36Statement of McCoy Williams Before the Jt. Hearing of the Subcomm. On Government 

Management, Finance and Accountability of the House Government Reform Comm. and the 

Subcom. On Management, Integration, and Oversight of the House Homeland Security Comm. 

(March 29, 2006). 37 U.P.I., DHS Financial Management Plan Collapses (April 3, 2006).

A detailed press article this year entitled ‘‘Security for Sale,’’ had the subheading: 

‘‘The Department of Homeland Security has a Section on Its Web Site Labeled ‘Open 

for Business.’ It Certainly Is.’’ 30 The article assembled many examples, some wellknown within the procurement community, of contractor exploitation, often facilitated by lobbyists, of lax standards at DHS. Its examples draw on, and mesh with, 

the previously-quoted studies by the DHS IG, GAO, and Congressional Committees. 

For example, earlier a recent IG report was quoted about the inadequate controls 

and personnel in DHS’s central procurement office. Security for Sale quotes Clark 

Kent Ervin, who served as DHS inspector general until the end of 2004 as follows: 

The controls recommended by Ervin included hiring more procurement staff 

with deeper experience. The DHS procurement office, he said, had ‘‘so few people expert in contract procurement, the private sector was able to take the department for a ride.’’ Referring specifically to contracting abuses at TSA, Ervin 

added that there was a ‘‘loose attitude regarding money.’’ 31

Security for Sale develops usefully one particular example about which this Committee has recently held important hearings. It describes how the company 

BearingPoint, formerly known as KPMG Consulting, obtained the ‘eMerge2’ contract. ‘‘In 2004, after signing on with Blank Rome, the company won three major 

DHS deals: a $229 million contract for its ‘eMerge2’ software, designed to integrate 

the financial management of the department’s 22 component agencies [and 2 other 

contracts].’’ 32 Blank Rome was a Philadelphia lawyer-lobbyist firm extremely well 

connected to the DHS Secretary, Tom Ridge of Pennsylvania.33

There was reason from the beginning to be skeptical of the BearingPoint contract. 

At the very moment that DHS awarded the eMerge2 contract to BearingPoint, another federal agency, the Department of Veterans Affairs, was canceling a computer 

systems integration contract with BearingPoint for a Florida VA medical center 

after paying BearingPoint $117 million, and the State of Florida was canceling a 

similar $173 million with BearingPoint and Accenture.34 More broadly, the technical 

procurement world grouped BearingPoint’s eMerge2, as an enterprise resource 

project (ERP), as one of the ‘‘well-known ERP implosions’’ as to which ‘‘the history 

of failed ERP projects [are] dotting the federal landscape.’’ 35

It seems rather blithe for DHS just to walk away from that failure without asking 

some hard questions of BearingPoint and of its own project workforce. DHS has a 

painful history of material weaknesses in its component financial statements and 

financial management systems precisely in the context that the BearingPoint contract was to fix, as GAO reported to this Committee at its March 29, 2006 hearing.36

DHS depended on that contract for a solution, having chosen the BearingPoint proposal over a rival proposal by established solution-provider IBM—and over simply 

implementing the internal solution of the Coast Guard’s much-praised system. It 

seems BearingPoint’s failure was apparent ‘‘within weeks,’’ 37 yet DHS, having 

stayed several years with BearingPoint, now finds itself having lost years in this 

key effort. The failure points up the need for more of its personnel efforts to be devoted to hiring and training so that it can make wise procurements and then manage them effectively, rather than devoting its personnel attention and funding to 

MaxHR. 

Alaska Native Corporations 

There has been an emerging problem—some would call it a scandal—in several 

government departments, as the exception to competitive bidding for Alaska Native 

Corporations (ANCs), some of which would not be considered true ‘‘small’’ businesses, is overused as a loophole for these departments to make noncompetitive, 

even sole-source awards. Unfortunately, there are signs that the DHS procurement 

workforce, with its shortfalls in staffing and training and with some evident vulnerability to political and lobbying pressure, has been yielding to the temptation to 

make excessive use of the ANC loophole in competition. 

Examples include a $500 million Customs Service contract awarded to Chenaga 

Technological Services Corp., for maintenance of scanning machines at ports and 
76

38 Investigation of Alaska Native Corporation Contracts Sought, 47 Gov’t Cont. 114 (March 9, 

2005). 39Kevin McCoy, Contract for Portable Classrooms Scrutinized, USA Today (Oct. 21, 2005), at 

6B. 40GAO, Contract Management: Increased Use of Alaska Native Corporations’ Special 8(a) Provisions Calls for Tailored Oversight (April 2006), at 18. 41DHS OIG, Transportation Security Administration’s Information Technology Managed Services Contract (Feb. 2006), at 2. 42GAO, Information Technology: Customs Automated Commercial Environment Program Progressing, but Need for Management Improvements Continues (March 14 2005). 43GAO, Homeland Security: Progress Continues, but Challenges Remain on Department’s Management of Information Technology (March 2006). 44 R. G. Edmonson, Slow Going: Funding and post-Sept. 11 Security Features Slow Completion 

of Customs Computer System, J. of Commerce, June 28, 2004, at 12 (quoting official of Retail 

Industry Leaders Association, Jonathan Gold).

borders; 38 and the $39.5 million no-bid post-Katrina contract for portable classrooms by Akima Site Operations (technically arranged by the Army Corps, because 

FEMA abdicated).39

Interestingly, the GAO recently reported on a particular example, a sole-source 

award by the immigration service to an ANC for operation and maintenance of a 

detention facility. Apparently, ‘‘the contracting officer [said] that awarding to an 

ANC firm was the quickest and easiest method and avoided competition.’’ 40 That 

comment speaks volumes about the workforce problems underlying the procurement 

problem. 

TSA-Unisys 

Another recently completed audit concerns the Transportation Security Administration (TSA)’s billion-dollar airport telecommunications contract with Unisys Corp. 

This was the vital contract to rollout an infrastructure so TSA could operate at 

headquarters and airports nationwide. Unisys’ performance was so disappointing 

that the IG recommended, and TSA agreed, to terminate the contract at the end 

of the base period and re-bid it.41 The IG reported that ‘‘TSA officials said that they 

originally estimated that the contract could exceed $3–5 billion, but set the contract 

ceiling at $1 billion.’’ The contractor ran through 83% of the contract ceiling ($834 

million) in less than half the allotted time, and failed to provide TSA with many 

of the critical deliverables. The shortfalls in procurement officer capacity to oversee 

the contract are only too clear. 

ACE 

Customs and Border Protection (CBP) has a program to modernize trade processing for border security called Automated Commercial Environment (ACE), with 

a lifecycle estimate of $3.3 billion, and which had received almost $1.7 billion by 

March 2006. ACE has a history of cost and schedule overruns, with GAO examinations in past years identifying the likelihood that the program would continue to fall 

short of expectations.42 A recent GAO overview in March 2006 of DHS’s lagging IT 

showed the ACE problems persist due to weak DHS program oversight. To meet 

deadlines—ACE had just come out with its release #4—increments (releases) that 

were supposed to be successive were being developed and deployed with what GAO 

called ‘‘significant concurrency’’ (i.e., more overlap in time than is advisable). 

GAO explained the risks with both this ‘‘concurrency’’ and the problem that ‘‘the 

ACE program was passing key milestones with known severe system defects—that 

is, allowing development to proceed to the next stage even though significant problems remained to be solved.’’ Both of these lead to ‘‘schedule delays and cost overruns,’’ ‘‘premature deployment,’’ and ‘‘a groundswell of user complaints and poor 

user satisfaction scores with the release. 43 That means that ACE will end up costing more billions, and taking more years, that planned for. A trade association once 

made the comment about ACE: ‘‘Is it ever going to get done? It’s beginning to look 

like the Big Dig in Boston.’’ 44 Now it appears that while it may get done, the shortfalls in procurement oversight will lead to overruns, delays, and customer dissatisfaction. 

Mr. ROGERS. Those were great opening statements. I hate that 

we have to go vote. We will be back in 30 minutes to begin the 

question and answer period. So thank you very much, and I apologize for the inconvenience. We are in recess. 

[Recess.] 

Mr. ROGERS. I apologize again for the delay. 
77

Ms. Kelley, I understand that you have a plane that you need to 

catch, so we will let you address questions first. 

And I would just generically throw at you the question I posed 

first and foremost to the first panel, and that is, what do you think 

we can do to deal with retention problems in particular, recruitment problems in particular, and morale problems generally? 

Ms. KELLEY. You know, I think staffing and the need for more 

funding for staffing is a huge issue. Everywhere I go employees are 

working a lot of extra shifts, a lot of extra hours with not much 

relief— 

Mr. ROGERS. So it is the volume of staff— 

Ms. KELLEY. Yes, the quantity. 

Mr. ROGERS. You need a larger volume of staff. 

Ms. KELLEY. And I actually see not so much the recruiting problem as the retention problem. Once employees begin to work at 

CBP, they recognize a couple of things pretty quickly. They feel 

that they are not supported in the work they are trying to do, they 

feel that their ideas and their suggestions of how the Department 

can do its work better are not tapped into and not listened to. They 

find themselves in an environment where they are told to do what 

they are told to do when they are told do to it and how to do it 

without any recognition of the expertise that they have. And just 

the zeal and commitment and love of the job that they do—I mean, 

these are just very dedicated, talented and committed employees 

with a wealth of background that they bring to this agency, and it 

is not tapped into. They feel that they are treated not with dignity 

or respect by their line managers, they are treated more as— 

Mr. ROGERS. Do you have objective data to verify that, or is that 

just anecdotal? 

Ms. KELLEY. Well, I have a lot of anecdotal, and I would say it 

is consistent. If this was coming from one or two places, I would 

not be making it as a general statement. I travel a lot, and I meet 

with frontline employees a lot, and everybody I go, without exception, they tell me they are looking for another job, they are actively 

looking for other jobs where they will be provided with the law enforcement officer retirement status, the 20-year retirement that 

they look around and see so many others having, and while they 

have the same responsibilities, they are not given that. They are 

given the title of law enforcement officer in death if they are killed 

in the line of duty, and they are given—they are called law enforcement officers all the time. You will hear the Department refer to 

them as law enforcement officers, but they do not give them the 

designation under the law. 

So they would also tell you that the job they were hired to do 

is not the job they are being asked to do today. They are being—

the Department has decided to cross-train them on Customs and 

Immigration and agriculture work and expecting them to be an expert in all. And each of them came into the Department with an 

interest in and an application for a certain kind of work, and it is 

a large body of law that each of those encompasses, so they consider themselves, rightly so, experts in their fields, and they see 

that expertise being diluted. 

And the training they are being given to do these other responsibilities is not proper training. They are given a 2-week course, in 
78

some cases they are given a CD to go and watch on a computer, 

and then they are expected to be experts in immigration law. And 

if their body of knowledge is Customs law, it is absolutely inappropriate to expect them to be experts in everything. And they don’t 

feel like they are being given the tools and the resources to do the 

job that they know the country is depending on them to do. They 

are very frustrated. 

Mr. ROGERS. Tell me what category these Border Patrol folks you 

are saying don’t qualify for the pension fall into. 

Ms. KELLEY. Actually, Border Patrol employees do, the agents do. 

These are called Customs and Border Protection officers, CBPOs. 

They were formerly Customs inspectors, immigration inspectors. 

Now they are called CBPOs— 

Mr. ROGERS. How many of them are there? 

Ms. KELLEY. There are over 14,000 of them. And like I said, the 

Department refers to them as law enforcement officers all the time 

very conveniently, but they do nothing to give them the status that 

they deserve. 

Mr. ROGERS. And what role do they fill. What functions do you 

generally see them pursuing? 

Ms. KELLEY. They do everything at every port of entry in the 

country, whether it is a seaport, airport or a land border crossing. 

They do primarily inspections; they do secondary inspections. They 

are all armed. They apprehend those who are trying to run the borders. They catch the drug smugglers, they catch the drugs and the 

individuals, whether it is human smuggling down on the Southwest 

border. I mean, they are involved in all of those law enforcement 

activities. 

Mr. ROGERS. And there are 14,000 of them? 

Ms. KELLEY. Over 14,000. That is just the front line, then you 

have the supervisors; but, yes, over 14,000. 

Mr. ROGERS. Thank you. 

The Ranking Member is recognized for any questions he may 

have. 

Mr. MEEK. Thank you very much, Ms. Kelley. What I will do is—

President Kelley, I am sorry, this is a building where people believe 

in titles. 

But let me just run along the lines of what the Chairman was 

asking because I think it is very, very important that people understand the difference. I have had the taste of both worlds, being a 

member of the Florida Highway Patrol, being on the road for 3 

years, being a member of the PBA at that time, hearing ‘‘gripe sessions’’ out on the road when two or three people get together to talk 

about what is wrong. I am glad that you brought about some clarity as it relates to what one may say chatter out there, to say it 

is a legitimate concern geographically and across the board. And 

this is the kind of stuff that is hard to really—once the study comes 

out, I mean, once we get the professor in—and I to want ask him 

some questions—once we start going along those lines, 9 times out 

of 10 it is too late. 

Now we are looking to expand Custom-border protection as it relates to more officers. And we have individuals that are carrying 

out law enforcement functions—I am getting ready to ask you a 
79

loaded question because we are about solutions here, hopefully, at 

this committee. 

In State government you have a number of wildlife officers, you 

name it, across the board, outside of what you may call State troopers, uniformed State police or what have you. In the Federal Government you have different tiers of law enforcement agencies. One 

may say that the threat level—and it is usually a collective bargaining unit—I mean, just everyone that falls into that category 

moves up to the next ladder. Some folks may argue that—and I 

don’t want to call an agency’s name out, but one agency’s level may 

not be as high as the next. 

And I think it is important as we start looking at this debate of 

making sure not only if a person is carrying out law enforcement 

functions—badge, gun, handcuffs, immigration, pocket field guide 

of statutes to enforce and policies, writing reports, going to court, 

testifying, quote/unquote, law enforcement professional, but not 

seen as a law enforcement officer because you have folks that will 

leave, A, for more money; B, for the respect that they are a law 

enforcement officer; and retirement. 

So we are asking people to commit—because, you know, as we 

speak right now, 11,000 National Guard troops are being trained 

to go just to the Southwest border, but that is another editorial for 

a different day. 

I want to ask you, is there a discussion within groups that are—

and, Mr. President, you can answer this, too, if you care to do so—

is there a discussion amongst those that want to move it up? I am 

not familiar—I am familiar with it, but I am not familiar with the 

debate within the 150 law enforcement agencies to bring them up 

to the level of parity. Is there a debate there? Because usually one 

agency may carry another agency’s will to move up and get the status. 

Ms. KELLEY. As far as I know, there has not been that debate; 

no one has opposed or said that these CBPOs do not deserve the 

law enforcement officer status. I mean, they are—from one day to 

the next, you see incidents of shootings, and in the last 2 months 

there have been 3 shootings that CBPOs were involved in at the 

northern border in Blaine, Washington—

Mr. MEEK. Let me just say, when you say CBPOs, just for the 

folks who don’t understand what that means. 

Ms. KELLEY. The Customs and Border Patrol officers. And these 

are different than the Border Patrol agents. The CBP officers work 

at the ports of entry, land border crossings, seaports, airports, the 

authorized ports of entry. The Border Patrol agents cover the area 

between the ports of entry. 

Mr. MEEK. I am sorry if I misstated. I understand that part; I 

am sorry if I misstated that. I am just saying as it relates to increasing those numbers there, when we talk about the parity, is it 

just for those officers only? 

Ms. KELLEY. Well, at this point the CBPOs are the only ones who 

do not have it. The Border Patrol agents have law enforcement status, the ICE agents have law enforcement status. So within the Department of Homeland Security, the only employees who are armed 

and conducting law enforcement officer duties every day who do 

not have that status are the CBP officers. And that is why they are 
80

the focus of the legislation that I mentioned in my testimony and 

that everybody is working towards. 

I mean, I have not heard of any dispute that they don’t serve it. 

What I have heard, and what the administration has proposed, is 

an interest in looking at a different kind of law enforcement officer 

designation that would change the definition that exists today. 

Mr. MEEK. Okay. I guess what I am trying to get down to—because I am doing what the Chairman does, I am asking my own 

question versus the questions they have written down to ask. Who 

are they comparing themselves to? 

Ms. KELLEY. They are comparing themselves to local and State 

police officers that they work with every day conducting their duties, with the Border Patrol agents, with the ICE agents— 

Mr. MEEK. Okay. Now, that is where I am going. As it relates 

to the parity issue, I know that out there, like we have this debate 

in Armed Services, an enlisted marine versus a reservist or a National Guard Army person versus an enlisted person, they are getting two sets—two different sets of benefits, but if you ask the enlisted person should the National Guard person, soldier, get what 

they—get the same, they would say yes; but when you get up here 

as it relates to policymaking, there is a price tag on that. And so 

I am just—so they are comparing themselves. The officers are comparing themselves to border protection—Border Patrol protection 

officers saying that we do the same—pretty much the same job that 

they are doing; am I correct? 

Ms. KELLEY. Yes. 

Mr. MEEK. Okay. So that is what I am trying to get to. I am 

sorry if I was going around, singing without my song sheet, but I 

want to make sure that that is clear and we have clarity there. Because the missions are very similar; am I correct? 

Ms. KELLEY. Yes, they are. 

Mr. MEEK. Okay. Now, one other question I want to ask here—

and, Professor, if I can, you mentioned something on procurement, 

and I think it is very important, and I know that we have—Mr. 

Chairman, I want to ask for a little latitude here because I want 

to get this question out before Ms. Kelley leaves because I may—

President Kelley—because I may have another question there. 

In your testimony you indicated that outside studies have shown 

an average procurement spending per employee ratio from 5.3 million to 6.3 million to 8.8 million in other Federal agencies with 

similar profiles to DHS; but you also stated DHS average spending 

per procurement employee is at 12 million. And I guess I want to 

ask the question, why does this matter? Because—if you can tell 

me in a short blast, that would be good, because we have to set 

forth all of this for the record. 

And I think it goes hand in hand with—what I am trying to do, 

Madam President and Mr. President, what I am trying to do is 

build the record because we have wasteful spending that is going 

on in the Department, and folks better yet are saying that we can’t 

upgrade these officers to build morale and stop attrition. If we were 

to put a stop to the wasteful spending, then maybe, just maybe, 

there would be dollars available to be able to say this is a reward 

as we start to lift our whole Department up, especially our frontline people. 
81

Mr. TIEFER. You have the numbers exactly right. And the numbers were developed by the inspector general of DHS, who I guess 

is used to looking at failed procurements and was doing an overall 

study to show why is it occurring on a general basis rather than 

procurement by procurement. 

The comparison, the fact that DHS—each DHS procurement officer has many more millions of dollars in procurement that he is 

both doing the initial awarding of the contracts out, and later on 

doing the supervising, the oversight of the contract as it is performed, much more than comparable contracting officers, say, for 

the armed services. That affects both those stages. At the awarding 

stage it means that the contracting officer is under great pressure 

to do things the quick and easy way, which is less competitive, to 

use one of these methods of which the simplest is when you just 

go to an existing interagency contract, and instead of saying, I will 

put this out for bids and I will get some competition, you just say, 

let me see, does the Interior Department buy this kind of thing, 

does some other department buy this kind of thing? I will jump on 

their governmentwide contract, and I will just take it under their 

contract, missing out on the chance to compete. So that is one thing 

is there is—there is it means much less competition. 

And then at the stage of the actual performance of the contract—

and this is true at contracts this committee has looked at like 

eMerge, when they are being performed, the contractor gets away 

with not meeting the milestones, not meeting the schedule, having 

cost overruns, and maybe not even performing in the end, providing the deliverable to a contract that it was supposed to, because the contracting officer has too many things to do, too many 

balls in the air, too many of these to watch over, and can’t give it 

the attention that would bring it in as expected. You saw this in eMerge2. I gave an example of ACE, this $3.3 

billion crucial contract by which Customs is going to try to keep 

track at the borders of incoming trade. There have been complaints 

about this all along: It keeps missing its schedule, it keeps coming 

in at high charges. That is because the contracting officers are not 

able to sit on top of it, they don’t have enough of them. 

Mr. MEEK. Thank you, Professor Tiefer. 

I guess we get one more round. 

I really want to go down the road of the whole contracting and 

how does that kick into the lack of morale there at the Department, because I know that it must be difficult. You heard me say 

in the first panel that it is hard to say that, you know, I am looking—I would love to work for you, private sector or public sector, 

and coming from the Department of Homeland Security, because 

the black eye, the big black eye, is in the area of procurement, and 

it has to have something—beating down employees as they go to 

serve; they want to come out with a good name, they want to be 

in with the good name. 

And I am thinking of some of the cost savings if we were to deal 

with the issue of making sure—we are going to have a procurement 

chief hopefully before this committee soon. That is going to be one 

of my questions based on your testimony, which I had an opportunity to read prior to the hearing, to hopefully be used along with 

the inspector general’s report, that can talk about how we can save 
82

money and be more efficient and not have some at the next hearing 

or the hearing that we are going to have on this whole limo issue. 

The bottom line is if we had the people that really would take 

the time to do the job, maybe, just maybe, we will be able to save 

money. Maybe we will be able to show a cost savings where we will 

be able to upgrade our officers to law enforcement status. So I will 

leave it at that. 

And, Mr. Chairman, I just want to prepare Madam President, 

Mr. President, my next question is going to be about the merger 

of the department of ICE and department of Customs and Border 

Protection. I just want to ask you what you may be hearing out 

there amongst the rank and file, because I know there is chatter 

out there on it. 

With that I yield back. 

Mr. ROGERS. I thank the gentleman. 

The Chair now recognizes the gentlelady from Texas Ms. Jackson-Lee for any questions she may have. 

Ms. JACKSON-LEE. Thank you very much. 

If I have not said it before, let me thank the Chairman and the 

Ranking Member. I frankly believe that this subcommittee is probably one of the more pointed cornerstones of the success or failure 

of this Department. The oversight, so that we can construct a functional securing band around America, clearly will come about when 

we eliminate the warps, the confusion, the disjointedness and the 

frustration. 

Let me thank all of the witnesses on this panel, particularly because they do represent a different perspective, and one that deals 

with the base employees, both Mr. John Gage and Ms. Colleen 

Kelley, and Professor Tiefer for your focus. 

I do want to spend my time engaging you, Mr. Cage—and thank 

you for your testimony. In fact, allow me to put on these glasses, 

that symbolize wisdom and not age, to be able to read, if you will, 

the points that you made and I think are extremely important. 

Most frontline CBP personnel do not believe they have been 

given the tools to fight terrorism. Most believe the Department of 

Homeland Security could be doing more to protect the country. 

Most have serious concerns about the DHS strategies related to 

their jobs, and the majority feel that the One Face at the Border 

initiative has had a negative impact, and that will go to the question I think that the Ranking Member will ask. Most believe that 

the changes in the personnel regulations will make it harder to accomplish their mission, and three out of five respondents say that 

morale is low among their coworkers. 

I think one of the points that I want to emphasize is there seems 

there is no tension between Ms. Kelley and who she is representing 

and some of the issues that she has concern with and what you 

have, and I think we need to make that point. And I think that 

the various entities, the personnel, they want to work together, 

they want to make things work. And I support the Filner legislation; and, Mr. Gage, you can tell me whether you oppose it, but I 

support it. I think that those who I have seen at the front lines, 

who I have watched as the inspectors have worked as I have been 

at the various entry ports around the nation, certainly there is that 

kind of merit. 
83

But I want to go through, Mr. Gage, and I want this committee—

because I would like in particular—and I thank you for studying 

the rapid border protection legislation. And I would commend to 

the Chairman and the Ranking Member, I really would like the 

pieces that are addressing the concerns that Mr. Gage has raised 

and also this whole issue of second-class citizenship for Homeland 

Security Department professionals and staff really to be addressed 

in this committee. I would like a hearing, because we made this a 

partisan issue when we were confronting this in the last election 

about collective bargaining for Homeland Security. It became a 

cause for the defeat and the victory of some various candidates. 

But what I want to do is what we have said. We work in a bipartisan manner here. If we believe this is a constructive approach to 

help rebuild morale, if we believe that these personnel, as others, 

have not taken advantage—right now the controllers, the air traffic 

controllers, have said blatantly, we are not going to strike. We are 

engaged in negotiations; we know that we cannot. And I believe our 

Federal employees are not going to engage in anything that would 

undermine the security of this Nation, but we have undermined 

them. 

Mr. Gage, tell me specifically as we talk to—I am looking at section 307. I think that specifically restores in this particular legislation those rights to the employees, I think, that you are mentioning. But I—as you are talking about that, I want to go to your 

testimony. I want you to talk more directly about the pay system 

and why that is confusing to you. I want you to talk about the difficulty of employees not having appeal rights, or the fact that they 

don’t have any collective bargaining provisions, and then the fact 

that the Department of Homeland Security has actually violated 

court law, they have actually gone beyond a decision by a Federal 

court, as I understand it. Help us understand how this committee 

can be effective in at least fixing some of the terrible morale problems in the individuals that we are asking to be on the front line 

of border security and immigration reform in America. 

Mr. GAGE. That is a wonderful question. First of all, I think on 

the litigation, we said that what Homeland Security was doing in 

the area of labor relations and employee rights and civil service 

protections was wrong, and we have proven it illegal, and I think 

that will stand up on appeal, the way I read the judge’s decision. 

But if you really get down to it, Congresswoman, about what 

these people need on the front line, the TSA employees I hadn’t 

mentioned. Now, the agency—the Department has the right that 

you all gave them to determine what rights TSA employees would 

have on the job, and they have determined that they will have no 

rights. And when you talk to these folks about how their shifts are 

changed from day to day, and there is no way that they can have 

a normal life; that their leave is restricted, for 6-month periods 

they are told that they can take no leave; now, collective bargaining clearly would address that without harming in any way the 

mission in TSA. 

But I think the frustration comes by when people say, for instance, bilingual pay, they ought to have it, they don’t have it, why 

don’t we have it? And the Department will say absolutely nothing 

and force the issue into litigation, when senior inspectors see their 
84

overtime just taken away. And these are law enforcement provisions that you all have passed, that an agency is to use these as 

a tool for employees who have these tours of duties that run over 

normal tools. And the Department doesn’t try to solve it, they simply wipe it out. 

And these officers are not children. I think you go a long way 

when you sit down and you talk to them and you have reasons, 

they all want to do a good job, they all really are trying to love 

their jobs. There is a lack of communication; it is my way or the 

highway. They post something on the bulletin board, that is it. People talk, can’t understand it, and it just builds, it festers. 

But I think what you all could really do is correct these pay problems, FLAP, AUO, overtime, the grades right now in that Department. As well as your bill on the 6(c); this is something that I think 

cures a lot of problems, but you can’t even get the Department to 

address it. They simply say no, and the employees say, well, you 

are asking me to do all these extra things, and you are nickel and 

diming me on these paid benefits that I should have. 

So I think they understand a certain amount of stupidity in some 

of the Department’s policies, but they don’t understand how they 

are asked to do so much. They are cooperating, they are doing their 

part, and the Department is fighting against them on these pay 

benefits that they absolutely deserve. 

Ms. JACKSON-LEE. Mr. Chairman, if I could follow on this last 

line of thinking and share with you a comparable situation. 

Across America local police departments and fire departments 

have collective bargaining. In the city of Houston we meet and confer, and other aspects, to have our public employees the opportunity for discussion give and take. I can’t recall a shutdown in my 

city—I know there have been a number of other incidences, but by 

and large you will find that everyday public employees on the local 

level get up, put on their uniform and do their job. And I can’t 

imagine that we would not have the same semblance of situation, 

given the opportunity to review this. I think a hearing would be appropriate. 

And I would just add that in H.R. 4044, sections also include establishment of specialized inspector occupations, the language 

training, the language awards, professional development that goes 

on that gives the incentive for employees, and as well, I think, fixing this merit system that I hope maybe in our next line of questioning you will get. 

But the idea, if you could just finish, that what we think enhances performance in this stressful responsibility of homeland security, is it your view that what the Department may feel enhances 

performance actually turns down or dumbs down excellent performance, including what you said about TSA? Because I would prefer 

the TSA staffing to be trained at such an acute level that they 

don’t have to be examining people with metal hips or stripping 

down elderly people in wheelchairs, though we want them to be secure; but they have the finite training that they need that they can 

actually make sure they get the guns and the knives and whatever 

else that they are supposed to be trying to get, the bombs, as opposed to what they are being made to do now. Can you just finish 

on that point? 
85

I thank the Chairman. 

Mr. GAGE. I think you are hitting on something there. I know 

when I was out in one place and the officers got together and they 

said, they publish these shift schedules, they don’t ask us about 

anything. Someone might have a graduation, be able to get a co 

worker who could take that shift for him. And that really is a part 

of collective bargaining, an employee voice. And they just rule all 

that out. It is, this is your assignment, that is it. And it really destroys the teamwork in law enforcement. 

And that is the fear that I have, that they are taking all the good 

things that we have developed about these officers working together, really looking out for each other, doing the job, and they 

are killing the good things and replacing it with, you know, a management style that is coercive and intimidation. And I scratch my 

head why? It would certainly be a lot easier and a lot more profitable and, I think, efficient to go the other way and recognize the 

employees’ voices and how that could be a very positive thing on 

the work site. By this Department is very disjointed, and just basic 

things like that seem to be lost in the shuffle, and I think it is really hurting them. 

And all these officers, most of them, have criminal justice degrees. These are not inexperienced people that you have to treat 

like they are children and that they are stealing something. And 

that is what a lot of the officers feel; they feel like they are the 

enemy. 

Ms. JACKSON-LEE. I thank the Chairman and Ranking Member. 

Mr. ROGERS. I thank you. 

I would like to, again, remind Ms. Kelley, we hope you can stay, 

but if you have got a flight, we will understand if you have to part 

company with us. But I hope can you stay. 

We would like to pick up with Mr. Gage and Professor Tiefer 

about the same subject matter I was talking about with Ms. Kelley. 

That is, what do you suggest—she talked about staffing concerns 

that affect retention. What do you suggest are some areas where 

we can make improvements that would deal with this morale? I 

know in your opening statement you made some pretty good observations, but generically with that, and retention in general. 

I was surprised to hear—I cannot remember which one of you 

said that you didn’t really think it is as big a problem as recruitment. Border Patrol folks are telling us the opposite. They are trying to get folks in these training programs, they are spending huge 

sums of money to try to get applicants, and they are having trouble. But in any event, tell me, Mr. Gage, what do you think? 

Mr. GAGE. I think the first thing that has to be done is these inconsistencies in the Department have to be cured right away. Some 

of these pay differentials where some people get it, some people 

don’t, completely arbitrary, these officers don’t understand that. 

The bilingual pay, getting the overtime straightened out, getting 

the grades really looked at. 

Mr. ROGERS. I am sorry to interrupt you, but you brought up 

something I wanted to ask earlier when I heard Ms. Kelley talking. 

Talk about the pay—the pay that we are offering Border Patrol 

agents and Customs and Border Protection Officers. How does it 
86

compare with what they see in other areas of law enforcement, and 

does it have an effect at all on their retention? 

Mr. GAGE. I think it has a huge effect. The ones who do get hired 

and trained by the Department are now looking to move quickly 

with that training into— 

Mr. ROGERS. Where could they go? 

Mr. GAGE. Look at San Diego, I think they start off their police 

force there at something like $65,000 and our agents and our CBP 

officers can be started off at a grade 5. Now there is about a 

$25,000 change right there, and it is just simply not competitive. 

Now the Department clearly can start these people. Now, the Department can clearly start their people at it a career ladder, 5, 7, 

9, 11, the grades that currently exist. They can hire at a higher 

rate. Why they don’t, I don’t know. 

Mr. ROGERS. Let me ask, and again, excuse my ignorance here, 

don’t they get additional pay? 

Mr. GAGE. Locality pay. 

Mr. ROGERS. A $45,000 base salary then what would they get on 

top of that? Locality and scheduling? 

Mr. GAGE. It is an extra percentage they get on their structural 

pay raise that you all give them at the end of the year. If you are 

in a high rate, high rent district like San Diego or Ft. Lauderdale, 

you may get 2, 3, 4 percent more on your raise. Congressman, it 

doesn’t even touch the real estate. It is just completely ineffectual. 

There was a woman out there who runs the Federal managers 

association who did a study of this thing and interviewed people, 

officers who were living in their cars, family were 200 miles away 

and her solution is a housing allowance similar to the military. 

Now that may sound a little way out there, but when you look at 

this problem, those people have to be agent those essential ports. 

Now the other stupid thing that the Department just did, and 

these affect our people up on the northern border. Some of them 

live in Canada. They come out and say all right, by July 1st, you 

have to live in the United States. And I talked to one woman, she 

said I have to quit. I am an 18-year employee, I am a veteran of 

the military, I have nothing but outstanding appraisals. Now they 

are saying because I live in Canada, and I just bought a new 

house, I can’t work on my job. And she said what is the nexus, 

what is the connection with working in Canada or living in Canada 

a couple miles from the border and working there, and the agency 

just puts out this blast that you can’t do it any more with no 

grandfathering in, no consideration for the people who are really 

affected and no relocation expenses, nothing. 

Now that woman is going to get the agency, and there they just 

drove off another valuable employee. 

Mr. ROGERS. I would like to hear from Mr. Tiefer as well. What 

would you suggest we could do to combat this morale problem, and 

retention in particular? 

Mr. TIEFER. There is supposed to be, there has, for years, been 

a pay comparability statutory structure that the Federal Government has committed to doing surveys and getting the page in a locality in a specialty paid under the general schedule, the GS comparable to the local pay. That is why there as locality pay system. 
87

What you are, in effect, trying to do in this room here is make up 

for what hasn’t been done by the systematic process. 

I would say that the big problem for the Department of Homeland Security is that its statutory commitment to MAX HR takes 

it off of the comparability process. The contractor who is doing 

MAX HR is trying to do, if I understand what he is trying to do, 

Northrop Grumman, what it is trying to do, it is trying to reinvent 

a different form of locality pay comparability that will make the 

pay bands comparable to what is paid locally. That is a disaster. 

If the government simply went back to what it was doing, which 

was trying to achieve parity, that would go a long way. 

Mr. ROGERS. Thank you. My time is up. I now yield to the Ranking Member for any additional questions he may have. 

Mr. MEEK. You know, President Gage, I have the question on the 

merger of Custom Border Protection and ICE. I just want to ask 

you, because we are talking about morale, because we have had—

did we have two hearings or one? We had a hearing on it and I 

think we have had a couple of hearings on this issue of Custom 

Border Protection versus ICE. We just had one last week. Three 

hearings, thank you for correcting me. We have heard testimony 

that there is a 50–50 assessment out there on making it happen, 

and mainly it has been surrounded around some of the things that 

you and Madam President Kelley mentioned earlier, individuals 

having a very low morale and also as relates to investigations, ICE 

not willing to take some Custom Border Protection investigations. 

They go outside the Department of Homeland Security for followup on cases. 

What are you hearing? There has to be some chatter out there 

amongst the rank and file on this. 

Mr. GAGE. I think that what I am hearing is that from the rank 

and file they definitely all feel there has to be more communications between CBP and ICE, and they feel that there isn’t. They 

look at it really as a management problem. 

I think our ICE personnel are a little hesitant about going into 

CBP simply because they are afraid they are going to lose their law 

enforcement status and some of the benefits that they have. 

But from what I have been hearing is that they really see—and 

you get anecdotal stuff on the snafus between but really a basic 

lack of communication between the two agencies and the Department. Now whether merging one into the other corrects that, I 

don’t know. I don’t see why—first of all, they ought to communicate 

a hell of a lot better, and I think that would go a long way to really 

answering the logical and operational problem that they are experiencing. 

Mr. MEEK. There is an attempt. There are some memorandum of 

understanding. They have a similar working group as you heard in 

the panel before you as relates to MAX HR. They call it their 

human capital council. They have something similar within the Department. It seems to be a breathing philosophy in the Department 

of having top level managers sitting there kind of coming up with 

an interpretation of what is best for the rank and file. 

I wanted to ask you, do you think that there is a place for rank 

and file individuals or some representative on this human capital 

council to give the kind of input that must be needed at that level? 
88

Mr. GAGE. I think it is crucial. There has been really a lack of 

communications between this Department and the unions. It has 

just been shut off. And just time and time again, you can see decisions that are made that really don’t take in any type of voice of 

the employee. And I would say that it is—I mean, in trying to deal 

with them like this whole MAX HR, Colleen and I both had some 

very good suggestions on how labor management could be done better, how the pay system could be done better, and they were just 

summarily kicked aside. 

We are following some HR theory approach to this thing, which 

really doesn’t get down on the ground in practical application. I 

really have a problem with it. I think they are really heading for 

disaster by not taking employees into the design and implementation of whatever they do. 

Mr. MEEK. So, President Gage, will it be an accurate statement 

to say that if that offer was made, and obviously you are saying 

that both of you have offered your expertise, if you are saying yeah, 

we are fighting on this thing but meanwhile, while you are carrying out your mission, here is a better way to do it that will be 

useful and that you are willing to do that, and lawyers won’t keep 

you from doing that on behalf of the employees. I want to make 

sure that is there. 

Mr. GAGE. I feel frustrated that we aren’t given that opportunity. 

Mr. MEEK. What the Department individuals came before us and 

said, our whole thing is to make sure communications work as it 

relates to the implementation of our MAX HR initiative, and I 

think that we need to make sure that everything is on the table. 

If we don’t have to legislate, fine, in my opinion. 

Professor, I want to go back quickly, and I know you have been 

sitting there thinking about what I kind of put out there in the 

first round, on this cost savings of the whole procurement issue if 

we were to have accountability. Do you have any recommendations, 

reading the different studies and reports, on what will be a good 

ratio for the Department of Homeland Security based on its history 

of not being able to keep up with these contracts, ratio that we 

pulled out of the Inspector General’s report, similar agencies that 

have better staffing than Homeland Security? 

Mr. TIEFER. I think it should be looking for what the armed services do. I want to add another comment about this, that is that in 

many ways, in many respects, Homeland Security Department 

buys things like the armed services. It buys information technology 

systems which, in some sense, are private sector products, but in 

other senses, have to be tailor made for the security environment 

and security needs. It is buying the things the armed services 

needs. In many cases, it buys them from the same contractors who 

sell it to the armed services. It needs something like the same level 

of procurement officers. 

I wanted to make the comment that there is something in the 

bill that was marked up here, that I think is very good, which is 

that you are looking to create a training—Homeland Security’s Acquisition University. I saw that and I saw how very much that 

picked up on the advantages that in the armed services, you have 

for the Defense Acquisition University, and I think that would be 

a real step toward having topnotch procurement in the Department 
89

because that is why we have a Defense Acquisition University, you 

have trained people and that is how you move them up the scale. 

They get better because you train them and so they are ready to 

take on the bigger assignments. 

Mr. MEEK. Thank you both, and I am sorry President Kelley had 

to leave. She waved to us as she was leaving. I hope she makes 

her flight. 

I want to thank all of you for coming before the committee. I 

know this will be my last time saying anything, the chairman will 

get to close out, and of course, Ms. Jackson-Lee has something to 

say. We are going to continue to work on this issue, it is a work 

in progress, but whenever we can come to these common ground 

and these hearings can bring some sort of new revelation out of 

saying we are willing, without legislation, to sit at the table and 

work through these issues as relates to the human capital council, 

even though our members may have issues with it and with MAX 

HR, we do know that it will be in existence for some time, and if 

we can head off additional frustration, fine. 

If that wouldn’t be used against you as relates to litigation and 

would hurt your ability to be able to hold on to the decision that 

has already been made, then maybe that needs to be put on the 

table too. 

I want to let you know as this member, I will encourage the first 

panel to engage those that are on the front line, and I did propose 

that as an idea. Hopefully, I know someone from the Department 

is listening, but hopefully, they will take some steps where they 

can report back to this committee and say based on the hearing, 

these are the things we have I implemented to even make our program better while we still have it. Thank you so very much. Appreciate your service to the country. 

Mr. ROGERS. I thank the gentleman. 

The gentlelady from Texas is recognized for any further questions she may have. 

Ms. JACKSON-LEE. Thank you very much. I hope as I listened to 

both the chairman and the ranking member, that there is someone 

who understands the concept of a word to the wise, because as I 

listened to both panels, I see permeating through the discussion 

the frustration of not having a seamless team that is working on 

really, as Americans, have described the number one priority, and 

that is our security. 

Americans turn off their lights at night, close their doors, some 

of them have their own personal security alarm system, but their 

overall view is that I sleep in a country that is protecting me from 

the next terrorist or I sleep in a country that if there was a natural 

disaster that overtook all of my community, that I would have at 

least one life line, and that is the United States of America. 

It frustrates me to know that there are employees that sense 

that they are not part of the team, there are employees like Transportation Security Administration employees that don’t have whistle blower protections. That is frustrating. And don’t have basic accommodations so that a team is built. 

I am disturbed, Professor, about this MAX HR. Sounds to me like 

a new video game, and one that you might lose. I am trying to understand, and this may be off the mark, but I am still under-
90

standing whenever you start getting into layers of confusion and 

naming names and putting categories, I am seeing something with 

four bands, I don’t know if this was your terminology, Mr. Gage, 

or what, but entry and development, full performance, senior expert, or supervisory. I don’t know if we are in the Olympics or 

whether this is some form of incarceration. 

So help me understand, Professor, the MAX HR and then build 

into it what is so important is the team building. I would want to 

join with Chairman Rogers and Ranking Member Meek to, if you 

will, really go at this, because I think you are right, your expertise 

with a State system and on the front lines as an officer and the 

various expertise that we bring as a member of the Houston City 

Council, though a small microcosm of what we do here, we were 

constantly engaged in public employee issues and law enforcement 

issues. 

But, Professor, this MAX HR, I am tempted to try to go at it and 

to bring some reform to it. What is your view of that? 

Mr. TIEFER. I understand the name has many overtones, some of 

them not so positive. The idea is to eliminate the GS system. No 

longer will people be known, if you ask them, are you a GS–6 or 

GS–8, instead you will have 9 or so occupational clusters; technical 

people, that is one occupation; law enforcement personnel, that is 

another, and then within the pay scale for that occupation, there 

will be just four levels sort of depending on whether they are entry 

level or higher level, which is much less structured than the existing GS system. 

So it is basically eliminating the structure and then saying we 

will have performance criteria and the supervisors will give people 

the amount of pay that they rate on their performance. It is not 

a bonus system where they are sort of assured of a level pay and 

good performance gets you a bonus, it is all their pay is going to— 

Ms. JACKSON-LEE. Up and down, sliding back and forth. So it is 

a great frustration. Again, what you are pointing out is it seems 

to have no structure and certainly it seems to have people more focused on their daily needs than doing their job. They have got to 

constantly be worrying about am I keeping up with the supervisors 

view of my getting a living versus let me see what innovative view, 

or how I can work with my team. 

Let me throw this out so I can have it on the table. I want to 

join in the theory that you have heard about a lot of expended dollars on really faulty and just abuse of contractual situations. I only 

say that because money spent on contracts that don’t work certainly impact resources that the Homeland Security Department 

has in general. So I want this committee as well to attack, if you 

will, what I thought was enormous abuse in Hurricane Katrina, 

and that is huge outsourcing of work and no results. 

I talked to law enforcement officers who were asked to come in, 

and I guess they should have been under the Homeland Security 

umbrella, DEA, and I am sort of off, but I want you to hear this, 

DEA, U.S. Marshals, et cetera, and they sat idly by because they 

had no one to allow them to come under the umbrella and say we 

are all working because we have got this tragedy. They were kept 

in the box. 
91

I only use that as an example to say it looks like you are keeping 

employees under this system in the box. You have people hesitant 

to work together, and in your words, Mr. Gage, you say that this 

is only possible with a system that promotes teamwork, but any 

new pay and classification system should support, not undermine 

the mission of the Department of Homeland Security. Explain that. 

Mr. GAGE. There is a saying out there that certainly with law enforcement, and as people have worked for supervisors, these are 

not rookies to the Federal sector, and there is an old thing out 

there that some supervisors will rate you outstanding if you can 

drink water and other supervisors won’t rate you outstanding if 

you can walk on water. People see that as the type of system that 

is coming down that is going to govern not just a bonus, their base 

pay, and it is a formula for abuse and cronyism and bringing people into the Government who might be friends, they can bring 

these people in at whatever rate they want. 

So I guess you might say that I am pretty down on this type of 

system, especially with law enforcement. It has never been proven 

to work in any law enforcement setting and I think this is a formula for disaster that is going to ruin all the good things we have 

developed among our people and their teamwork and looking out 

for each other. 

Ms. JACKSON-LEE. If I may, you just hit upon a point. The Federal Government has always attempted to be above cronyism. In 

fact, for many of us in the African American community, Hispanic 

community and other diverse communities, the Federal Government was the first resort or the last resort because of its alleged 

non-bias in hiring individuals. You now throw this to the wind for 

women, for people from regional differences. That bothers me. And 

I don’t think MAX HR has convinced me or the way it is structured 

that we won’t fall back into and be victimized in a department that 

we don’t need any of that. 

My last point is, if you could, both of you, I see that there is a 

meet and confer. I try to suggest that you unions certainly were sitting around the table when they were in the design process, and 

you might comment to me whether there was a contractor that did 

that. Apparently they messed that up. 

In any event, are you saying that the meet and confer is working 

or what are you saying about that, and what are you saying about 

the design process or design team or whatever this was called that 

got you to where you are today. 

Mr. GAGE. There is no question this was done before any meet 

and confer, designed process. There was a canned personnel system 

that they had ready. They were going to put it in come hell or high 

water, and when you sit down and try to offer suggestions on how 

this would work better on the ground, they were just run over. I 

don’t think Colleen or I had one suggestion that was adopted by 

the design team or certainly not by the contractors in implementing this. 

So I think at DOD, as well as Homeland Security, they went 

through some motions and sat down, but there was really not true 

dialog. These were people who said we are going to follow this formula we have and that is it. 
92

I wanted to bring one point up that is really a morale issue and 

that is the shortcomings in security. End of shifts, San Usedro and 

another one in Houston, the officers will be told wave them 

through. And you will see a line of people coming through and suddenly the officer just stopped doing his check, wave people through. 

Why? To avoid overtime pay. 

In Houston ships come in at the end of a shift, and we have this 

documented, and instead of a Customs guy and an immigration guy 

being the first ones up that gangplank, if it is the end of the shift, 

they say get them tomorrow morning and allow the ship to go 

through its unloading operations over the night. 

What kind of security is this is what our officers are asking us. 

The horse is completely out of the barn in these type of situations 

on the land borders waving them through and in ships letting them 

unload before they are inspected by customs and immigration. And 

I think that has to stop. And it is about one reason, overtime budget is it. 

Ms. JACKSON-LEE. Mr. Chairman, if I may just finish my sentence by simply saying again, I applaud this committee and the 

leadership that both of you have given. These folks here are not the 

enemy. And I think though you are particularly well coifed, I know 

your hair just stood on your head right now. And that is in my city. 

And I know there are people on the ground that mean well, 

meaning my port officials and a variety of other people who are 

counting on the job being done. One of the largest ports in the nation. We have just been told that for overtime reasons that Americans who are turning their lights out at night have reason to fear. 

I think that you have just added maybe hopefully another agenda item for us for a hearing and as well, let me extend an invitation to my colleagues to visit the Houston Port and some other 

sites that are facing these kinds of obstacles because when your 

port management relies upon your Federal authorities, they are not 

out there picking at them, they are not out there at the time of the 

opportunity for ships to be unloaded or to be docked. They are relying upon who we have vested this responsibility. 

I would simply say you are not the enemy, Ms. Kelley is not the 

enemy, and I would hope that we would have an opportunity in 

this committee and the full committee to do the job that the American people have asked us to do. And I yield back. I thank the 

chairman and the ranking member very much. 

Mr. ROGERS. I thank the gentlelady for her questions. I thank 

the panelists for being here. I am very proud. Our Committee has 

done a good job on staying focused on what we called this hearing 

about and that is the human capital concerns that exist in DHS. 

Having said that, I want to backslide slightly with the last question that I ask before we close the hearing. In hearing Professor 

Tiefer talk about his background, you mentioned you have a specialty in procurement law. I can’t let you get away without asking 

your thoughts about the Shirlington Limousine contract and why—

I hope you know the facts, if you don’t, that is fine, then just 

pass—but why do you think that contract wasn’t rebid when it was 

determined that three of the four HUBZone contractors did not 

qualify and Shirlington was the only supposedly qualified con-
93

tractor left standing? Is that a standard procurement practice? Tell 

me your thought. 

Mr. TIEFER. Mr. Chairman, you have a nose for things that don’t 

seem exactly right. The fact that that contract was let to a particular contractor while the other three potential competitors were 

brushed away looks not just negligent, I think the agency’s position, although it wouldn’t say this, is maybe we were negligent. It 

looks more than negligent, it looks suspicious. 

I can tease a few of the clues out of here. The contracting agency 

is saying look, we checked the responsibility of the contractor as 

much as we were supposed to. We looked on the list of exclusive 

bidders and we looked up their references. This is a very minimal 

job, less than a minimal job. It is someone sort of trying to sort of 

blinker their eyes. 

The fact that this contractor had had a prior contract terminated 

is something that you would think the contracting officer would 

surface. They don’t have to be on the list of those who are never 

to be allowed any contracts in the Department, which is the excluded list, as soon as you surface that, and they haven’t said 

whether they looked for that, whether they looked and didn’t find 

it. There is sort of a silence in DHS about whether they knew or 

didn’t know that it had a previous contract terminated. 

Once one has any reason to check, there is this—the Department 

is giving this notion that well, we looked at whether the contractor 

could do the job and that is all we look at. That is not true. Under 

responsibility they are supposed to look into the integrity, the business integrity of the contractor. That is the phrase in the Federal 

acquisition regulation. Once they knew that it had previously been 

terminated on doing a contract, they should have looked at the 

things that have now turned up about the contractor. 

Again it sort of looks like their vision was blinkered, that they 

were trying not to look. This pattern is entirely consistent, let’s put 

it that way, with a contributing officer who has been given the signal that this particular bidder is going to give—is favored, is going 

to give a kind of service that maybe other contractors wouldn’t 

give. We want you to check the boxes on this form and award the 

contract to them. 

Mr. ROGERS. Thank you very much. 

Ms. JACKSON-LEE. Mr. Chairman, just one sentence. 

Mr. ROGERS. Certainly. 

Ms. JACKSON-LEE. Because he was so eloquent. The same thing 

happened and is still happening with Hurricane Katrina in terms 

of contracts being let. I would just ask if the professor would kindly 

assess that not in writing or maybe give us some assessment if he 

has either some studies, particularly in the large what we call 

trash collecting contracts, if he would have the opportunity to review them, Mr. Chairman, I would appreciate if that could be provided for our review. 

Mr. ROGERS. Absolutely. 

Ms. JACKSON-LEE. I thank the chairman and yield back. 

Mr. ROGERS. The Ranking Member and I have talked about this 

circumstance and this is a good way to end this hearing. Our next 

hearing will be on this particular contract and it will be a very indepth look at what happened. But, more importantly, as the rank-
94

ing member and I have been discussing, there is a broader procurement policy problem that this exemplifies that we are going to have 

to address, and it affects all areas of DHS. One of the most glaring 

examples is the one that you just referenced. We intend to learn 

a lot more about procurement, and particularly this contractor. 

Thank you very much for being here. You have been very helpful. 

I would remind you that the record remains open for 10 days. If 

any members submit questions that they didn’t get to today or because they weren’t here, I would ask that you reply to those in 

writing so we can preserve them for the record. And with that, we 

are adjourned. 

[Whereupon, at 1:25 p.m., the subcommittee was adjourned.] 
(95)

A P P E N D I X 

FOR THE RECORD

QUESTIONS FROM REPRESENTATIVE MIKE ROGERS OF ALABAMA FOR GREGG

PRILLAMAN AND DWIGHT WILLIAMS

Question: 1. What can you identify as the single greatest personnel challenge contributing to low morale at DHS and how do you intend to address 

the problem going forward? 

Response: One of the greatest challenges identified by the Federal Human Capital 

Survey (FCHS) in 2004 was the lack of employee trust in senior leadership within 

the Department. 

While the lack of trust cannot be attributed to any single interaction or cause, 

it can manifest itself because of misperceptions brought about by a lack of communication, the short tenure of senior leaders and other less tangible factors. DHS created a Human Capital Survey response team which is addressing employee morale 

issues at a grass roots level by sponsoring employee focus groups to identify specific 

action plans for improving DHS morale and fostering a climate of mutual respect. 

We believe one way to address low morale is to provide employees with an opportunity to learn and develop professionally. Therefore, a Chief Learning Officer position has been established to increase our focus on training and development opportunities across the Department. In addition, MAXHR performance leadership training, involving a single performance system for the entire Department, has been completed by over 7,700 DHS managers to heighten their skills and awareness of employee issues and create a strong performance culture. An additional 4,300 managers are scheduled for training this year. 

Also, we are striving for better internal communications, for which all SES members of the Department received specific training in August of last year that included how to improve communications and coaching skills within the workforce, 

and how to create a better alignment between organizational priorities and individual performance expectations. Additionally, the Secretary has recently taken 

steps to improve communications between senior leadership and all DHS employees 

through a Secretarial web cast which provided responses to employees’ frequently 

asked questions. The Secretary plans to continue this and other efforts aimed at improving communications with our leaders and our workforce. 

The Federal Human Capital Response Innovations Team (I-Team) was formed in 

June 2005 and charged with the responsibility of designing, implementing and evaluating the overall DHS response to the FHCS results. This team is comprised of 

CHCO staffers and Component representatives who take a two-tiered approach, 

looking at overall issues of the Department as well as specific issues within the components. It has the responsibility for analyzing survey data, designing action plans, 

implementing best practices, providing employee educational communications and 

evaluating strategic outcomes.

Question: 2. What steps has your office taken to bring the diverse cultures 

of DHS components together in a cohesive organization with a common 

sense of mission? 

Response: Many steps have been taken to foster a ‘‘Team DHS’’ organizational climate. One important step was supporting the implementation of the Secretary’s Second Stage Review which changed the Department’s organizational structure. This 

Second Stage Review was intended to improve our capabilities to protect and safeguard the nation by integrating and coordinating areas of intelligence, policy, operations, and preparedness efforts; flattening the organization; and creating new and 

stronger Components. 

From a human capital standpoint, we have established and expanded a multiComponent shared services center; moved from 8 different payroll providers to 1; 

and developed a Department-wide recruitment brand as well as broad scope work-
96

force analysis and recruitment plans to address gaps in several mission-critical occupations. We have also designed and robustly deployed a DHS leadership competency 

framework which has served as the basis for Department-wide performance leadership training and as the basis for leadership training in the Components, ensuring 

the development of a common set of leader competencies throughout the Department. In addition, continued implementation of the MAXHR performance management program, supported by a robust, enterprise-wide ePerformance support tool, 

will drive the establishment of clear employee performance expectations that are 

aligned with organizational goals that are cascaded throughout the Department. 

The Chief Human Capital Office conducts bi-monthly meetings with the Component 

human resource directors to provide a forum for discussing diverse human resource 

issues. These are just a few examples of the active steps that the CHCO has undertaken recently to move toward a ‘‘Team DHS’’ climate.

Question: 3. It has been projected that the Federal government will experience a retirement bubble in 2007 and 2008. What has DHS done to prepare 

for this retirement wave and its impact on DHS’ workforce? 

Response: To prepare for the retirement wave, DHS is focusing on strategies in 

three areas: recruitment, retaining talent and fostering continuity of leadership and 

knowledge through learning and development.

Recruitment 

The Department is conducting workforce analyses that include strategies to close 

hiring and competency gaps in mission critical occupations across DHS. To assist 

in the recruitment effort, DHS has established a corporate branding initiative resulting in recruiting materials such as portfolios, slipsheets, a recruitment video, 

and CD’s that may be utilized throughout the Department at a variety of recruitment events. A Recruitment Taskforce has been established to leverage Componentspecific recruitment activities throughout the Department. Components are making 

use of recruitment flexibilities such as outreach, the student loan repayment program and hiring bonuses.

Retaining Talent 

DHS is fostering a results-oriented workforce through the implementation of the 

new pay and performance management system that links individual/team/unit performance to organizational goals and results. The DHS Chief Human Capital Office 

links specific Component results from the Federal Human Capital Survey to results 

gained from workforce analysis. Components are encouraged to actively develop internal strategies to track and improve retention for those segments of their workforce where losses are above the normal rate by making use of retention flexibilities 

such as retention bonuses, performance awards, telework and alternative work 

schedules. We will continue to develop approaches to retention based on exit interviews, grievance/complaint trend analysis, and/or focus groups.

Learning and Development 

All Components must foster continuity of leadership and knowledge by applying 

the DHS Leadership Competency Framework and a succession planning approach 

to their workforce planning efforts. Learning and development opportunities must 

be continually funded through centralized (Departmental) and Component-sponsored activities. This ensures that the executives and those in the leadership pipeline strengthen their ability to direct and manage the work of others, evaluate and 

analyze results, and implement process improvement techniques. The Leadership 

Competency Framework provides the necessary standards to ensure learning is also 

aligned with organization goals. Components’ will use the results gained from the 

workforce planning process to identify appropriate attendees for programs such as 

the newly established DHS-wide Senior Executive Service (SES) Candidate Development Program, Component-specific Candidate Development Programs, Department 

of Labor’s SES Forum Series, The Graduate School, USDA’s Executive Potential 

Program and Aspiring Leaders Program among others. 

Components will continue to share resources through programs such as the tribureau (ICE, CIS, CBP) Supervisory Leadership Training Program; USCG’s Midlevel Managers Course, Mentoring, and Executive Development Programs; and 

FEMA’s Leadership Development Programs. It will be through these efforts that 

DHS? leadership cadre will better be able to effectively manage people, ensure continuity of leadership, and sustain a continuous learning environment.

Personnel Challenges at Customs and Border Protection 

Question: 4. Is there concern about an exodus of pilots from CBP Air and 

Marine when the retirement wave hits the Department in 2007 and 2008? 
97

Response: In preparation for the possible departure of those pilots who will be eligible for retirement in 2007 and 2008, U.S. Customs and Border Protection Air and 

Marine is presently assessing the number of pilots who are likely to retire immediately upon reaching eligibility. Additionally, CBP Air and Marine is developing a 

follow-on to the former Office of Border Patrol pilot-trainee program that will provide approximately forty-eight seasoned Border Patrol Agents, who have appropriate 

pilot certificates, the opportunity to become CBP Air and Marine pilots. Lastly, CBP 

Air and Marine has developed a strategic plan to identify its future requirements 

and seek appropriate funding to meet those needs.

Question: 5. In an effort to bring about pay and grade parity between Border Patrol aviators and legacy Customs pilots, Border Patrol aviators were initially given 

an 8% premium. Has pay and grade parity been achieved? Are Border Patrol 

aviators still receiving the 8% premium? 

Response: Former Border Patrol aviators are receiving special rates as GS–1881 

Air Interdiction Agents, which currently are approximately 6–7 percent above the 

basic salary of a similar employee at the same grade and step on the General Schedule. They are also entitled to Law Enforcement Availability Pay (LEAP). The special 

rates were not provided to achieve parity with legacy Customs pilots. Rather, the 

special rates were provided to avoid staffing problems that might have otherwise occurred when the legacy Border Patrol pilots were converted to the new Air Interdiction Agent position and lost eligibility for Fair Labor Standards Act (FLSA) overtime pay. The conversion to the new position provided parity by ensuring the pilots 

were in the same position with the same grade structure and with the same entitlement to availability pay. The legacy Customs pilots were already FLSA exempt; 

therefore a similar change in pay as a result of the conversion to the new GS–1881 

Air Interdiction Agent position was not considered.

Question: 6. President Bush promised that 6,000 Border Patrol agents will be hired 

by 2008. Does the Border Patrol have the capacity to train that many agents 

with its current recruitment methods and training structure? If not, how 

much will it cost and low long will it take to create a more robust recruitment and training capacity? 

Response: Funding provided in the supplemental (P.L. 109–234), together with 

funding proposed in the President’s budget for FY 2007, will be sufficient to increase 

the number of Border Patrol Agents by 6,000 by the end of 2008. The supplemental 

provides an additional $50 million and the President’s budget includes an additional 

$23.291 million.

Question: 7. Is it accurate that only one in 30 Border Patrol agent applicants complete training at the Border Patrol Academy? 

Response: No. An average of one out of every thirty applicants makes it through 

the Border Patrol hiring process (including an entry examination, oral structured 

interview, fitness test, medical, drug screening, and background investigation) required prior to reporting to training. Only one out of every thirty-seven applicants 

successfully completes the entire process, from application through graduation from 

the Border Patrol Academy.

Question: 8. What is the reasoning behind requiring all new Border Patrol 

agents to spend their first five years on the southwest border? Does this 

policy affect retention and morale for new employees? What is being done 

to improve retention for Border Patrol agents? 

Response: There is no policy mandating that new Border Patrol Agents serve a 

five-year tour on the Southwest Border. In order to meet the National Strategic 

Plan’s goal of improving the operational effectiveness of the Border Patrol, and to 

facilitate the movement and transfer of agents to different locations throughout the 

country, CBP has sought to reach an agreement with the National Border Patrol 

Union on a new Voluntary Reassignment Program. A nationwide voluntary reassignment opportunity bulletin opened June 26, 2006 and will solicit applications for 

reassignment through July 17, 2006.

Question: 9. CBP Air and Marine currently owns and maintains DHS’s only command and control facility in the United States that is capable of monitoring all airspace within the U.S. and areas leading up to its borders. However, DHS, and specifically CBP, has failed to adequately staff and fund its Air and Marine Operations 

Center (AMOC) facility thereby degrading its potential capabilities. The AMOC is 

currently staffed at approximately 60%. Has CBP or DHS made any plans to 

correct this situation? 

Response: CBP defined the mission requirements and force structure for the newly 

formed CBP Office of Air and Marine in the Customs and Border Protection Stra-
98

tegic Air Plan, which was recently provided to Congress in a report. The Plan addresses the need to enhance the border monitoring missions at the AMOC by 

supplementing the eighty-eight personnel currently assigned. Our preliminary staffing estimate is that 200 total personnel are required to take on the additional border missions. We also estimate that the facility itself may need to be doubled in size 

to accommodate the personnel and equipment required to meet the various new missions, such as monitoring the DHS unmanned aircraft systems and coordinating the 

operations of the combined CBP Air and Marine fleet. Specific expansion and hiring 

plans derived from the strategic plan and Department of Homeland Security initiatives will be reflected in future budget requests for staffing the AMOC.

Question: 10. Several sections within the AMOC, including the intelligence office, 

are well below targeted staffing levels. How have the shortages affected operations? 

Response: Personnel shortages have led to a reduction in operating hours in the 

Communications Room, a reprioritizing of areas of responsibility to be monitored by 

radar surveillance, and a reduction in tactical support to the field units.

Personnel Challenges in the Directorate of Science and Technology 

11. It is the Committee’s understanding that the Directorate of Science and Technology (S&T) has experienced high attrition rates. 

a) Please describe the attrition rates for S&T during the past two years. 

Response: Between May 2004 and June 2006, the S&T Directorate increased its 

federal employee staff by 132 individuals. The following chart details the number 

of federal staff that were on board between this period at the S&T Directorate.

Date Number of

Federal Staff 

May 2004 108

June 2005 184

June 2006 240

Between May 2004 and June 2006 there was a net loss of 41 federal positions, 

but please note there was a gain throughout this period. Losses are replaced as 

timely as possible within the challenges of hiring federal employees. In addition, 

federal laboratories such as the Environmental Measurements Laboratory, Transportation Laboratory and the Plum Island Animal Disease Center became a part of 

the S&T Directorate; the federal employees at these laboratories are included in the 

June 2006 total.

b) To what does S&T attribute this loss of qualified and experienced personnel? 

Response: The S&T Directorate has not experienced an above-normal attrition rate 

for qualified and experienced personnel during the past two years. Normal attrition 

is expected in a new organization and particularly in a scientific organization. A robust turnover of personnel and the injection of new scientific technical professionals 

helps staff maintain scientific credibility and remain abreast of new scientific technology. 

During the start up of the S&T Directorate, there was difficulty in finding and 

hiring qualified federal employees because of the lack of an approved and flexible 

DHS federal hiring system. To appropriately staff its operations, the S&T Directorate arranged for qualified personnel from other agencies to be detailed to the 

S&T Directorate or recruited under the Intergovernmental Personnel Act Mobility 

Program (IPA). The S&T Directorate also established staffing contracts and actively 

sought to hire federal employees. 

Detailees are assigned to the S&T Directorate by their parent organizations and 

must return when requested. IPA’s serve under stipulated contract time-limits, and 

contractors are assigned based on the terms-of-the?contract. The wind-down of these 

contracts and detail assignments contributes most to perceptions of significant attrition.

c) What steps are being taken to address this issue? 

Response: We are using every mechanism available to retain our best and brightest, including retention initiatives, communication, advancement opportunities, attendance at conferences, training and ensuring that our personnel know how valuable they are to DHS and the Nation.
99

Question: 12. S&T relies on a number of experts from the national laboratories 

hired under the Intergovernmental Personnel Act (IPA) and other authorities. It has 

come to the Committee’s attention that Lawrence Livermore National Laboratory 

receives more than half of all S&T funds distributed to national laboratories.

a) How are the decisions directing funding to national laboratories made? 

Response: As discussed in the Report to Congress (RTC) titled ‘‘Utilization of the 

National Laboratories’’ October, 2004, the assignment of work to the national laboratories is based on a variety of factors including whether the work is efficiently 

accomplished by the private sector and/or whether DHS has a strategic reason in 

investing in development of a particular capability . The S&T Directorate program 

requirements are reviewed annually and specific goals and budgets are formulated 

by S&T Integrated Product Teams (IPT). For those requirements which are determined appropriate for national laboratories and federally funded research and development centers (FFRDCs), the S&T Directorate executes a rigorous annual management cycle for program planning, execution, and review. That process includes these 

component parts: 

• Program Planning: Each fiscal year Program Execution Plans (PEP) are developed in a program planning meeting involving relevant technical area experts from Strategic Partner National Laboratories. These meetings identify 

qualified performers per the requirements that DHS establishes. Within the 

PEP, S&T Directorate program managers assign tasks to the most qualified 

performers. 

• Program Execution: Scopes of work are executed by individual laboratories or 

multi-laboratory teams, as determined in the PEP. 

• Program Review: Program reviews are held annually using a team of external 

experts to evaluate project performance based on three primary criteria: 

• Mission and user relevance; 

• Technical competency; and 

• Management effectiveness. 

Many S&T Directorate programs are of multi-year duration and the above process 

is used to manage program execution as well as to initiate new programs.

b) Are employees formerly employed by the national laboratories involved 

in funding decisions? Please assess whether the conflict of interest issues 

identified in the December 2005 Government Accountability Office report, 

entitled ‘‘DHS Needs to Improve Ethics-Related Management Controls for 

the Science and Technology Directorate’’—or other conflicts of interest relating to DHS employees who are former employees of the national laboratories—account for the disproportionate amount of research and development funding being directed to Lawrence Livermore. 

Response: As the Committee noted, the S&T Directorate relies on a number of experts from the national laboratories hired under the Intergovernmental Personnel 

Act (IPA) and other authorities. In addition, the S&T Directorate has employed a 

number of experts who were formerly employed by the national laboratories, including one former employee of the Lawrence Livermore National Laboratory. 

The S&T Directorate recognizes the need for ethics-related management controls 

to prevent actual, or the appearance of, conflicts-of-interest as discussed by the Government Accountability Office. Consequently, management controls are in place to 

shield IPA and former laboratory employees from actual, or the appearance of, conflicts-of-interest in the performance of their duties. In particular, consistent with the 

criminal conflicts of interests provision, 18 U.S.C. § 208(a), every IPA assigned to 

the S&T Directorate operates under a recusal statement that they will not take any 

official action or become personally and substantially involved in a particulate matter in which the IPA detailee knows the ultimate outcome of which will impact his 

financial interests or those of his spouse, minor child, general partner or organization in which he is an officer, director, trustee, general partner, or employer. In the 

case of personnel employed by a national laboratory, the general prohibition extends 

to both the entity that operates the laboratory as well as corporate affiliates. All 

IPAs are instructed orally in writing that if they become aware of a matter that 

calls for their involvement in their official capacity that involves their sending institution, or an affiliate (or which otherwise implicates 18 U.S.C. § 208) that they are 

supposed to refer the matter to a person designated by name in their recusal statement. The S&T Directorate has no direct evidence that an IPA—regardless of assignment—was specifically involved in directing work to his/her sending institution 

or helping shape requirements that would directly flow to the benefit of his/her 

sending institution. If this were the case, it is something which of great concern and 

will not be tolerated by the current leadership. It is also noteworthy that the recently approved realignment of S&T has a significant number of checks and bal-
100

ances and would prevent this from occurring. If credible evidence or allegations of 

improper behavior is brought to the S&T leadership’s attention, full and immediate 

investigation(s) will result. 

In the case of former employees of the national laboratories, the S&T Directorate 

employs numerous management controls to help ensure that personnel follow the 

requirements in 5 CFR § 2635.502 relative to former employees acting on behalf of 

the government in matters with a ‘‘person’’ with whom they have a covered relationship (the institution in which they were a former employee within one year) or in 

which they have a financial interest. 

New IPAs are pre-screened by the S&T Directorate’s designated ethics advisor 

and are also required to complete new employee and annual ethics training as appropriate. Also, IPA personnel are bound by disqualification agreements, which they 

execute prior to their arrival at the S&T Directorate, in which they are disqualified 

from taking any official action in matters that involve their parent institution or one 

of its affiliates. An IPA’s supervisor is responsible for overseeing compliance with 

these agreements and resolving all questionable cases. 

Given these procedures, the S&T Directorate believes that the amount of research 

and development funding being directed to Lawrence Livermore National Laboratory is based on the need for the labs’ specialized capabilities and facilities, rather 

than the result of undue influence by IPA personnel or former employees of that 

laboratory.

Security Challenges 

Question: 13. It is the Committee’s understanding that labor unions and 

other groups have criticized DHS classification policies as overly broad 

and subjective. Is there a written policy on the classification of documents? 

If not, what guidelines does your office provide to DHS officials regarding 

classification determinations? 

Response: The Department maintains substantial written policy governing classification management to include management directives, classification guides and instructions for Original Classification Authorities. Various Management Directives 

(MD) prescribe the policies and procedures related to classification of documents, the 

marking, storage, and transmission of classified documents, and the standards for 

identifying, reporting, and conducting inquiries and investigations into incidents involving the mishandling or compromise of classified information. All of these MDs 

are in accordance with the requirements of Executive Order 12958, as amended as 

well as 32 C.F.R. Part 2001 and 2004.

Question: 14. When an individual with a security clearance is transferred 

to DHS, what type of paperwork is transferred to the Department for its 

adjudication decision? Following the adjudication decision, what information is kept on file while the individual is employed with DHS? Please explain the process from start to finish. 

Response: The principle of reciprocity has been mandatory for executive branch 

agencies for more than a decade. The Intelligence Reform and Terrorism Prevention 

Act recently re-emphasized and expanded upon this requirement. Reciprocity mandates acceptance of equivalent personnel security clearances and accesses across 

federal agencies. In other words, if a prospective employee holds a current clearance 

as a result of previous military or other government service, the Department is required to accept this clearance without additional investigation. Government—wide 

reciprocity procedures, to include narrowly defined exceptions are outlined in the Office on Management and Budget Memoranda (OMB) on ‘‘Reciprocal Recognition of 

Existing Personnel Security Clearances’’ dated December 12, 2005 and July 17, 

2006. The reciprocity principle also governs personnel transfers to and among DHS 

components. 

Pursuant to the Recent OMB memoranda referenced above, it is no longer necessary to transfer paper files. Instead, the appropriate Security office verifies the 

individual’s clearance using one of several electronic databases: OPM’s Clearance 

Verifications Systems (CVS), Department of Defense’s Joint Personnel Adjudication 

System (JPAS), and the Intelligence Communities Scattered Castles Database. The 

security office at the DHS Component then creates and maintains a DHS security 

file consisting of the documentation confirming the clearance, and reviews the information to ensure completeness and accuracy Pursuant to reciprocity requirements, 

the Department does not re-adjudicate the investigation unless it is aware of new 

derogatory information.

Question: 15. What types of security clearances are conducted by DHS, its 

component entities, and contractors acting on their behalf? Are these investigations comparable to those required by the Department of Defense? 
101

Response: Executive orders and regulations govern the process by which DHS and 

other executive branch agencies grant access to classified information. Accordingly, 

background investigation types are standard throughout the Executive Branch, including the Department of Defense. 

Each DHS employee with a national security clearance has undergone a comprehensive, thorough background investigation. With the exception of the Secret 

Service, Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), and the DHS components serviced by the Office of Security, all other 

components are required to use the Office of Personnel Management to conduct 

these various background investigations for their employees. The Secret Service 

uses its own employees to perform these investigations while CBP, ICE, and the Office of Security have contracted with several companies to provide this investigative 

service. 

In accordance with Executive Order 12968, as amended, ‘‘Access to Classified Information,’’ different clearance levels require different levels of investigation. For example, an employee requiring access to Top Secret and Sensitive Compartmented 

Information must undergo a Single Scope Background Investigation (SSBI). This investigation consists of various database and criminal history record checks covering 

the most recent 10 years of the individual’s life, or since his or her 18th birthday. 

The SSBI also includes an interview of the subject, interviews with references and 

database checks on their spouse or cohabitant. For a Secret clearance, the minimum 

investigative requirement is a Minimum Background Investigation, which covers the 

most recent 5 years of the individual’s life and includes various database checks, 

criminal history record checks, and other sources as necessary to cover specific areas 

of an individual’s background.

Question: 16. What are some of the reasons a clearance might be denied? 

Response: DHS security offices adjudicate background investigations according to 

the 13 government-wide adjudicative guidelines listed in 32 C.F.R. Part 147. These 

standards and guidelines were originally issued in 1997 and were modified in December 2004 and December 2005 respectively. The December 2005 revisions to the 

adjudicative guidelines, issued by the Assistant to the President for National Security Affairs, recommend that the criteria be elaborated, both in terms of the actions 

that could raise security concerns and the factors that could mitigate such concerns. 

The government-wide adjudicative guidelines include an evaluation of factors such 

as: the individual’s allegiance to the United States, personal conduct, involvement 

with drugs and alcohol, financial stability criminal conduct, security violations, and 

foreign influence. The adjudication process is an examination of a sufficient period 

of a person’s life to make an affirmative determination that the person is eligible 

for a security clearance. The adjudicative process is the careful weighing of a number of variables known as the ‘‘whole person’’ concept. Available, reliable information about the person is considered in reaching a determination. In evaluating the 

relevance of an individual’s conduct, the adjudicator considers factors such as the 

nature, extent, and seriousness of the conduct; its frequency and recency; and the 

likelihood of continuation or recurrence. Each individual case is judged on its own 

merits. Adjudicators review the investigative file and take into account context and 

mitigating information before deciding whether to recommend granting or denying 

a security clearance. Adverse information in any one area does not necessarily result in a denial of a clearance. However, DHS will deny a clearance if available information reflects a recent or recurring pattern of questionable judgment, irresponsibility, or emotionally unstable behavior. Any doubt concerning whether an individual should be granted access to classified information is resolved in favor of the 

national security.

Question: 17. How many security clearances has DHS sponsored for nonFederal employees? Please break this information down by security clearance level and year. How many are pending? 

Response: In accordance with the National Industrial Security Program (NISP), established by Executive Order 12829 to serve as a single, integrated program for the 

protection of classified information released to or accessed by industry, security 

clearances for federal contractors are issued by the Department of Defense. DHS, 

however, does sponsor and grant clearances to state, local, tribal, and private-sector 

officials as a part of the DHS information sharing mission.
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DHS Clearances Granted to Non-Federal-Employees 

DESCRIPTION Level FY2003 FY2004 FY2005 FY2006 Grand 

Total 

INTERIM.

PRIVATE SECTOR SECRET 0 0 14 55 69

SECRET 4 208 216 30 458

TOP SECRET 0 11 35 3 49

PRIVATE SECTOR Total 4 219 265 88 576

INTERIM 

STATE AND LOCAL SECRET 1 18 21 70 110

SECRET 6 39 269 60 374

TOP SECRET 66 133 64 2 265

STATE AND LOCAL Total 73 190 354 132 749

Grand Total 77 409 619 220 1325

As of July 17, 2006 there were 166 pending state, local, tribal, and private-sector cases.

Shirlington Limousine Contract 

The Committee has learned that DHS screened the car and bus drivers employed 

by Shirlington Limousine and Transportation, Inc., but did not screen the owner of 

the company before awarding the contracts.

Question: 18. From a security standpoint, would it make sense for DHS to 

alter this protocol in order to avoid a similar situation in the future? 

Response: The contract for van and shuttle services with Shirlington Limousine 

and Transportation, Inc. does not involve access to classified information. DHS policy for vetting contractors on unclassified contracts is based on an assessment of the 

risk associated with access to personnel, facilities, and information required for satisfactory contract performance. DHS security and contracting policy requires all contractor personnel with unescorted access to be screened consistent with this assessment of the risk. This policy balances the appropriate level of security while enabling DHS to fulfill its mission. The Chief Security Officer and Chief Procurement 

Officer are continually exploring ways to enhance security associated with the unclassified acquisitions process.

Question: 19. Several other Federal departments and agencies, including 

the Department of Defense, lease their own vehicles and hire their own 

drivers. Has DHS reviewed the feasibility of leasing its own vehicles and 

hiring drivers as employees? 

Response: When the Department initiated a sedan and shuttle operation in January 2003, it leased its sedans and contracted for the shuttle buses as well as drivers 

for both the sedans and shuttles. Limited available FTE made this the preferable 

option not only from a cost standpoint, but also by allowing existing FTE to be used 

to fill more essential mission needs. This has been periodically reviewed and continues to be the most effective practice. 

The Department has recently issued a request for information (RFI) to gather industry comments and best practices on sedan/shuttle transportation services DHSwide in the National Capitol Region. This will include a cost/benefit and efficiency 

analysis of contract versus Federal employee drivers.

Question: 20. Is DHS strengthening existing screening procedures by requiring background reviews of not only employees of potential contractors, 

but the business owners themselves, particularly in cases where the company is a sole proprietorship or limited liability corporation? 

Response: Please see response above. In accordance with the National Industrial 

Security Program, business owners who will have access to classified information as 

part of their DHS contract are investigated by the Defense Security Service. However, expanding the requirement for mandatory background investigations for business owners who will not have access to classified information would affect security 

and procurement practices across the Federal government and therefore would require a government-wide response. Additional resources would also be required as 

it is expected that the number of investigations would increase significantly. The 
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Department is continually working with its Federal partners to identify methods for 

enhancing security while maintaining the efficiency and integrity of the procurement process.

Question: 21. With the understanding that different positions require different background checks, please articulate what steps are taken during 

the background checks of contract employees. Please discuss the specific 

steps that are taken during the background check for the positions of shuttle or limo driver, private security guards, and cafeteria workers. 

Response: To ensure the protection of DHS facilities and information all personnel 

on contracts that do not require access to classified information are screened to determine their suitability to work under contract with DHS. DHS policy for vetting 

these contractors is based on an assessment of the risk associated with access to 

personnel, facilities, and information. DHS officials are responsible for making this 

assessment, which will determine the appropriate background investigation. 

The chart below summarizes the specific steps taken for the positions of shuttle 

or limo driver, private security guard, and cafeteria worker.

Position Risk Level Investigation Investigation Coverage 

Shuttle/Limo Driver Moderate Minimum 

Background 

Investigation (MBI) 

Security Form Review 

Fingerprint Check 

Credit Check 

National Agency Check 

Inquiries and record searches for 

past 5 years: 

—Current/past employers 

—Schools attended 

—Reference Checks 

—Local Law Enforcement Checks 

—Face-to-Face Subject Interview

Private Security 

Guard 

Moderate Limited Background 

Investigation (LBI). 

Added coverage 

because this is a 

gun carrying 

position..

Security Form Review 

Fingerprint Check 

Credit Check 

Inquiries and record searches for 

past 5 years: 

—Current/past employers 

—Schools attended 

—Reference Checks 

—Local Law Enforcement Checks 

Face-to-Face Subject Interview 

Field investigation of subject’s 

background for previous 3 years

Cafeteria Worker Low National Agency 

Check with Inquiries 

(NACI) 

Security Form Review 

Fingerprint Check 

Credit Check 

National Agency Check 

Inquiries and record searches for: 

—Current/past employers 

—Schools attended 

—Reference Checks 

—Local Law Enforcement Checks

Question: 22. Does DHS or any of its component agencies confirm the citizenship or immigration status of contract employees prior to granting facility access or clearance? Please identify which components do or do not 

confirm citizenship of contract employees. 

Response: In accordance with the National Industrial Security Program, security 

clearances for federal contractors are issued by the Department of Defense. The Defense Security Service (DSS) guidelines indicate that only U.S. citizens are eligible 

for security clearances. 

DHS policy is to confirm citizenship or immigration status prior to granting access 

to facilities. All DHS components are in compliance with this policy.

Oscar Antonio Ortiz Case 
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1The Central Index System is a records management system that contains automated biographical information on certain classes of aliens and naturalized citizens. The system includes 

information concerning apprehended aliens lawfully admitted for permanent residence (LAPR), 

those under adjusted immigration status, and those seeking or obtaining immigration benefits.

On January 26, 2006, Oscar Antonio Ortiz, a former Border Patrol agent pled 

guilty to smuggling illegal aliens and to a false claim to U.S. Citizenship, among 

other things.

Question: 23. Please explain how Mr. Ortiz, or any other illegal alien, might 

be able to receive a security clearance and become a DHS employee? 

Response: Pursuant to Executive Order 12968, as amended, ‘‘Access to Classified 

Information,’’ non-U.S. citizens are not eligible for security clearances, except under 

limited conditions. DHS policy is designed to ensure that security clearances are 

only granted to eligible employees for whom an appropriate investigation has been 

completed. 

Oscar Antonio Ortiz entered on duty with the U.S. Border Patrol, U.S. Immigration and Naturalization Service (INS), on October 28, 2002, following a Single Scope 

Background Investigation conducted by the U.S. Office of Personnel Management 

(OPM). The OPM investigation, dated August 12, 2002, reported that there was No 

Record of Mr. Ortiz’ birth on file with the state Bureau of Vital Statistics in the 

State he claimed as his place of birth. The security specialist for INS sent Mr. Ortiz 

a letter requesting a faxed copy of his birth certificate. In response, Mr. Ortiz provided documentation he claimed verified his citizenship. At that time, there was no 

authentication made of these documents. Subsequent investigation determined the 

documents to be fraudulent.

Question: 24. What steps have been taken at DHS, and specifically CBP, to 

ensure this does not happen again? How can the Border Patrol be certain 

that it does not currently have other illegal aliens employed as agents? 

Response: The Department is committed to ensuring that only those employees eligible for access to classified information are granted a security clearance. After the 

arrest of Mr. Ortiz, CBP ran more than 42,000 employees (legacy U.S. Customs, 

U.S. Border Patrol, INS, and Department of Agriculture Plant and Animal Inspectors) through the U.S. Citizenship and Immigration Services Central Index System 

(CIS) 1 to verify U.S. citizenship. During the course of running these employees 

through CIS, CBP identified another Border Patrol Agent who had fraudulently obtained a delayed birth certificate in the State of California. It was later determined 

that the Agent is actually a Mexican national. This case is currently under investigation by Immigration and Customs Enforcement. 

Questions from Representative Bennie Thompson 

Question: 1. Please expand on the One-Face-At-The-Border. Under this initiative, how many weeks of immigration training are legacy Customs and 

Agriculture officers given before assigning passenger processing duties? 

How many weeks of inspection training are legacy Immigration and Agriculture officers given before they are assigned cargo and baggage inspection duties? How many weeks of training are legacy Customs and Immigration officers given before being assigned agriculture duties? 

Response: All CBP Officers and Agriculture Specialists, no matter their background, receive extensive Anti-terrorism and fraudulent document training while 

working in the passenger-processing environment. 

New CBP Officers receive two years of On the Job Training (OJT) that includes 

thirty-three weeks of principally classroom instruction during the first year, and approximately twelve weeks of training in the second year. This training includes exposure to all environments within the CBP structure at their particular port of 

entry. 

CBP Officers and Agriculture Specialists are not allowed to perform new functions 

or be transferred to other assignments without first receiving the mandatory crosstraining associated with that function. 

Legacy Customs officers receive over eighty hours of training though a combination of CD–ROM (8–10 hours) and classroom training. Thereafter, officers begin an 

extensive OJT program that includes working primary passenger processing with an 

assigned mentor. Before being asked to process more complex immigration cases in 

the secondary area, they are given an additional 136-plus hours of training in Unified Immigration Secondary Processing. Additional training is also received in Agriculture Fundamentals and Bio-Agro Terrorism. 
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Legacy Agriculture officers, while not allowed to work primary passenger inspection (admissibility issues), receive approximately forty hours of familiarization training designed to instill in them an understanding of the laws and regulations applicable in the other CBP passenger areas. As part of this training, officers are instructed in immigration and customs fundamentals, immigration and customs law, 

and Customs Secondary, and receive shadowing assignments in primary. 

Legacy Immigration officers receive forty hours of training through a combination 

of CD–ROM (8–10 hours) and classroom training before beginning an extensive OJT 

program in the Customs Secondary area, working in baggage inspectional areas. 

Legacy Immigration officers and Agriculture officers also receive thirty-two hours 

of training before beginning an extensive OJT program in Cargo processing.

• What is the nature of this training? Is it classroom training? Is it CD–

ROMs and booklets? Are these officers self-trained? 

Response: CBP officers are not ‘‘self-trained.’’ Incumbent officers, which include 

those officers who were employed prior to the March 1, 2003 merger, are required 

to participate in structured and specific cross-training courses prior to being assigned to complete a particular task or responsibility. 

As of December 31, 2005, CBP has identified, built and distributed more than 

thirty-seven cross-training modules that range from a six-hour CD–ROM awareness 

course on Customs/Immigration Fundamentals to an eight day classroom session 

with many required pre-requisites and job-aids. All of the classroom sessions are followed by an on-the-job training component that requires both the supervisor and 

employee to assert that the employee is ready to perform those functions prior to 

being permitted to work unsupervised. 

Under the current cross-training plan, legacy Customs officers must receive up to 

31.7 weeks of training, which includes a combination of CD–ROM, classroom, and 

on the job training. A legacy Immigration Officer will receive up to 33.1 weeks of 

training, which also includes a combination of CD–ROM, classroom, and on the job 

training.

• How often are these legacy officers given a refresher course in the inspections functions area that they were not initially operating in? 

Response: Under CBP’s ‘‘just in time’’ / as needed philosophy, the instruction of all 

CBP officers must be meaningful and useful to officers. Therefore, CBP has developed training modules that are provided to officers just before they are assigned to 

new duties. They are then asked to remain assigned to those new functions for a 

significant period of time that is sufficient to learn the job and retain that knowledge. 

CBP has instructed the field offices to retrain Officers who have rotated away 

from specific duties for more then six months. Last year our goal was to finish building thirty-six cross-training modules. CBP is currently restructuring the existing 

curriculum to incorporate ‘‘refresher courses’’ for CBP Officers who are experienced 

in a particular area. Officer assignments to such courses will depend on the complexity of the assignment, the length of time away from the assignment, and the 

individual officer.

• Do you work with the human capital officer at CBP to insure that the Department has a strategy to maintain inspections or immigration expertise? 

If so, please elaborate. 

Response: Yes, CBP is part of the DHS Training Leadership Council and works 

to coordinate human capital issues, including training, across the Department.

2. Some federal agencies are making good use of their ability to repay employee student loans as a recruitment and retention technique. Under the federal student loan 

program, agencies can repay student loans up to a maximum of $10,000 in a calendar year to a total of $60,000 per employee. In return, the employee must sign 

a service agreement to work at the agency for at least three years. At a time when 

about half of all government employees are within five years of retirement, agencies 

must come up with innovative succession strategies. Using the student loan repayment program, along with other benefits such as flexible work schedules and 

telework, are way agencies can compete for younger applicants. At Secretary 

Chertoff’s confirmation hearing, he stated, ‘‘I understand that the Department of 

Homeland Security provided guidance last year on the use of incentive programs for 

recruitment and retention, including repayment of student loans, but the student 

loan program has received little to no use. If confirmed, I will ensure that the Department reviews the adequacy of the guidance and the criteria used to remove any 

unnecessary restrictions limiting its use.’’
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• Is there today, over a year since his confirmation as Secretary, a student loan repayment program at DHS? 

Response: Yes. During fiscal year 2005 (FY 2005), 18 of these incentives, totaling 

$160,000, were provided to employees by DHS Components. Additional loan repayments have been authorized in FY 2006, and will be included in an annual report 

to OPM.

• How much has DHS set aside to fund the student loan repayment program? 

Response: Funds for incentive programs, such as student loan repayment, are not 

budgeted independently, but are included with other benefit costs (object class 12.1), 

some of which—such as the student loan repayment program—can be used optionally.

• How many DHS applicants have applied for the DHS student loan repayment program? 

Response: DHS has not established an application process. The Department uses 

the student loan repayment program as a recruitment and retention incentive; it is 

offered to employees by DHS Component managers when it is determined to be an 

appropriate tool to recruit or retain desired employees.

How many applicants have been accepted in the DHS student loan repayment program in 2005 and 2006? 

Response: Please refer to the response above (Q03738). A total of 24 employees 

have been approved for the program in FY 05 and year-to-date in FY 2006.

• What is the average loan amount for each successful student loan repayment applicant? 

Response: The average payment is $9,100.

3. On August 17, 2005, DHS issues a Management Directive establishing DHS policy regarding telework. 

• How many DHS employees today participate in the DHS telework program? 

Response: The latest numbers available from the Office of Personnel Management 

(OPM) are from FY04. In FY 2004, 1,938 DHS employees participated in the 

telework program. Data to confirm FY05 will not be available until OPM completes 

its agency-wide survey for FY05. These data are expected to be released from OPM 

in September and are expected to have increased.

• How many employees are eligible to participate? 

Response: In FY04, 38,574 DHS employees were eligible to participate in telework. 

Data to confirm how many DHS employees are currently eligible to telework will 

not be available until OPM completes its agency-wide survey for FY05. We are expecting OPM to release this data in September.

4. I know that a letter dated February 27, 2006, from nine (9) Members of Congress 

from the DC metro area sent a letter to DHS regarding arbitrary restrictions on use 

of an existing telework agreement with the staff attorneys and other professional 

employees at the Customs and Border Protection Office of Rules and Regulations 

(ORR). 

• What is the status of the telework program at ORR? 

Response: The CBP Office Regulations and Rulings (OR&R) Flexiplace Program 

was established on August 4, 1997, and continues to be an active program today 

within the OR&R.

• How many employees were indicated by their supervisors as able to 

telework without affecting the Office’s mission? 

Response: Thirty employees, out of a total of seventy-four eligible employees, were 

approved by their respective supervisors for participation in the 2006 Flexible Program. These approvals, however, were based not upon consideration of the overall 

Office’s mission, but the rather particular needs of the individual branch units at 

the time. Attorneys in CBP Office of Regulations and Rulings (OR&R) are covered 

by a rotation policy under which they may be rotated from one branch to another 

from year to year. Therefore, the individual branch chief’s approval is not necessarily indicative of the impact of the total program upon the Office’s mission. On 

May 15, 2006, Acting Commissioner Spero addressed this issue to the (9) Members 

of Congress from the DC metro area. Attached, for your information, is a copy of 

the signed letter by the Acting Commissioner.

• How many eligible employees were denied telework opportunities at 

ORR because of a cap limiting telework to only 25% of eligible staff? 
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Response: OR&R does not prescribe an arbitrary percentage cap limiting the number of employees eligible to participate in its Flexiplace Program. There are, however, limits on participation based upon availability of resources to equip and maintain what are essentially dual workstations (home and office) required for participation in OR&R ’s Flexiplace Program. On May 15, 2006, Acting Commissioner Spero 

addressed this issue to the (9) Members of Congress from the DC metro area. Attached, for your information, is a copy of the signed letter by the Acting Commissioner.

5. This Subcommittee has been keenly interested in strengthening the authority of 

the chiefs in the Management Directorate to ensure that they get the cooperation 

they need on Department-wide initiatives. This authority can be enhanced through 

the ability to influence performance reviews and decisions about raises and promotions for human capital officers in component entities. Below is the legislative 

language our Subcommittee approved in March that sets out all the authorities.

AUTHORITY OF CHIEF OPERATING OFFICERS OVER DEPARTMENTAL 

COUNTERPARTS 

(1) IN GENERAL.—The Under Secretary for Management shall ensure that chief 

operating officers of the Department, including the Chief Financial Officer, the Chief 

Procurement Officer, the Chief Information Officer, and the Chief Human Capital 

Officer, have adequate authority over their respective counterparts in component 

agencies of the Department to ensure that such component agencies adhere to the 

laws, rules, regulations, and departmental policies which the chief operating officers 

are responsible for implementing. 

(2) INCLUDED AUTHORITIES.—The authorities of a chief operating officer pursuant to paragraph (1) shall include, with respect to the officer?s counterparts in 

component agencies of the Department, the following: 

(A) Making recommendations regarding the hiring and termination of individuals. 

(B) Developing performance measures. 

(C) Submitting written performance evaluations during the performance evaluation process that shall be considered in performance reviews, including recommendations for bonuses, pay raises, and promotions. 

(D) Withholding funds from the relevant component agency that would otherwise be available for a particular purpose until the relevant component agency 

complies with the directions of the chief operating officer or makes substantial 

progress towards meeting the specified goal.’’

• After reviewing the provision, can you tell us, as the Chief Human Capital Officer, would you like this authority if it was statutorily granted? 

What impact will this authority have on your ability to execute your overall mission? 

Response: I do not believe that the authority needs to be statutorily granted. Currently the Department issues Management Directives (MDs) and the MD 0006, 

Human Capital Line of Business Integration and Management sufficiently addresses the activities identified above. 

6. By all accounts, the formation of the Department has not been a painless exercise. We hear more than the run-of-the mill grumblings from workers about problems with management and cultural problems within the organization. We are in 

the middle of commencement time—when college students are looking around, trying to figure out what they want to do for a career. Why should they want to 

come to the Department and make a career there as a border patrol agent 

or screener or any other area where there’s a need for new staff? 

Response: The mission of homeland security is the most compelling reason why 

people seek employment with the Department. 

Working for the Department of Homeland Security provides an opportunity to directly serve the citizens of the United States in a very tangible way—leading the 

unified national effort to secure America; preventing and deterring terrorist attacks 

and protecting against and responding to threats and hazards to the Nation. Our 

mission of ensuring safe and secure borders, welcoming lawful immigrants and visitors, and promoting the free-flow of commerce remains compelling—despite our 

growing pains.

7. DHS’s employees claim that they are left in the dark about major changes in the 

operations, structure and management. Specifically, they say that the Department 

did not adequately prepare them for 2SR and all the organizational changes that 

followed. What proactive actions do you take, at the headquarters level, to 

communicate to rank-and-file employees about structural or management 

changes at the Department? 
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Response: When communicating major structural or management initiatives, the 

Department continues to review and improve how best to provide timely and relevant information to employees. Currently, DHS tailors its approach based on the 

nature of the information to be communicated. The issues involved may impact the 

entire Department, a specific Component or Components, or specific segments of the 

Department. Therefore, each issue is addressed in a different manner. 

For issues determined to be of Department-wide interest, employees are typically 

communicated with directly using tools such as: an internal electronic newsletter 

(DHS Today), targeted email messages to all employees (cascaded through the Components), DHS-wide correspondence from the Secretary or Deputy Secretary, as well 

as posting of information to the DHS intranet site (DHS Online). If deemed necessary for the situation, key leaders from the Department meet directly with employees in interactive forums (i.e. town halls) or are shown live on Web casts and/

or satellite broadcasts. Supporting the DHS-wide efforts are cross-Component committees such as the Internal Communications Committee which help streamline and 

coordinate the communication of departmental information. 

For those issues that do not have broad, DHS-wide impact, the Department works 

with specific Component or organizational segments to provide targeted communications, using such tools as: unit-specific websites, ‘‘all hands’’ meetings, ‘‘muster 

meetings’’, unit-wide emails and hard copy memorandums or announcements. The 

Department often assists by providing Components with standard language or templates that can be used or modified as needed. 

By leveraging all of these channels, it is the Department’s goal to provide timely 

information on current initiatives to all impacted employees. We feel we are communicating with all levels of DHS employees on a regular basis, but we are always 

looking for new ways to improve our outreach and our messages to employees.

8. GAO has long been seen as the one example of a pay-for-performance system that 

works. Yet, a recent article indicated that some employees at GAO are unhappy 

with the pay-for-performance system. The Department of Defense has stumbled, 

much like DHS, with trying to establish a fair and equitable system. What proof 

do you have that pay-for-performance will really work for this Department 

as a practical matter? 

Response: Performance-based salary-increases are virtually universal for white-collar employees in the private sector and have been shown to be a key driver of organizational success and retention of high-performing employees. In addition, alternative pay systems with performance-based pay have existed in the federal government for 25 years and today cover over 90,000 employees. Taken together, these systems represent a steady progression away from the current government-wide classification and pay systems toward alternative approaches where market rates and 

performance are central drivers of pay. These include DoD demonstration projects 

and independent systems currently in place at several large federal agencies—FAA, 

NIST and IRS to name a few. On August 28, 2006, the Department of Commerce 

expanded its pay for performance program to include up to 3500 employees in the 

National Oceanic Atmospheric Administration. The Department evaluated and analyzed the successes and shortcomings of several of these programs and best practices 

from the private sector in developing the MAXHR7 program. 

OPM’s recent publication entitled, Alternative Personnel Systems in the Federal Government and a Guide to the Future states: 

Reviewing what happened when agencies implemented performance-based alternative pay systems surfaces five significant conclusions about their common experience: 

• Agencies discarded the General Schedule in favor of more practical classification and market sensitive pay. 

• Performance—not time—drives pay. 

• Success depends on effective implementation. 

• Employees have come to support alternative pay systems. 

• Agencies funded their systems out of existing budgets. 

These observations are supported by many years of cumulative data found in 

both internal and external evaluation reports. That support is not unqualified, 

and progress in some organizations has been slower, as would be expected with 

experiments. Nonetheless, the evidence presents clearly positive trends. 

In addition to analyzing research that suggests that pay for performance can work 

at DHS, the Department has taken steps to ensure that it does. For this reason, 

Component and union representatives and employees have played significant roles 

in the design of the performance management program. DHS recognizes the integral 

role that a sound performance management program plays in ensuring an effective 

pay for performance system. To that end, the Department has put considerable ef-
109

fort into the design and implementation of the program, prior to linking it to pay 

and is requiring all managers and supervisors take a Performance Leadership 

Workshop and have access to a Coaching Hotline to ensure that they are adequately 

prepared to execute their performance management responsibilities. 

As we move forward, we will continue to examine and evaluate our progress, as 

well as the effectiveness of our programs. We have learned that no one system is 

right for the culture of every organization. In addition, we must make a significant 

investment in training, communicate constantly with employees, and continually 

evaluate and adjust to ensure that we obtain the desired results.
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