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THE KEY TO HOMELAND SECURITY: THE NEW

HUMAN RESOURCE SYSTEM

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON CIVIL SERVICE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

AND THE

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, THE FEDERAL WORKFORCE, AND

THE DISTRICT OF COLUMBIA

OF THE

COMMITTEE ON GOVERNMENTAL

AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

FEBRUARY 25, 2004

Serial No. 108–183

Printed for the use of the Committees on Government Reform and

Governmental Affairs

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

MARSHA BLACKBURN, Tennessee

——— ———

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY ORGANIZATION

JO ANN DAVIS, Virginia, Chairwoman

TIM MURPHY, Pennsylvania

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

ADAH H. PUTNAM, Florida

NATHAN DEAL, Georgia

MARSHA BLACKBURN, Tennessee

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

CHRIS VAN HOLLEN, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

RON MARTINSON, Staff Director

B. CHAD BUNGARD, Deputy Staff Director and Chief Counsel

REID VOSS, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

COMMITTEE ON GOVERNMENTAL AFFAIRS

SUSAN M. COLLINS, Maine, Chairman

TED STEVENS, Alaska

GEORGE V. VOINOVICH, Ohio

NORM COLEMAN, Minnesota

ARLEN SPECTER, Pennsylvania

ROBERT F. BENNETT, Utah

PETER G. FITZGERALD, Illinois

JOHN E. SUNUNU, New Hampshire

RICHARD C. SHELBY, Alabama

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

THOMAS R. CARPER, Delaware

MARK DAYTON, Minnesota

FRANK LAUTENBERG, New Jersey

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel

AMY B. NEWHOUSE, Chief Clerk

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL

WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE

GEORGE V. VOINOVICH, Ohio, Chairman

TED STEVENS, Alaska

NORM COLEMAN, Minnesota

ROBERT F. BENNETT, Utah

PETER G. FITZGERALD, Illinois

JOHN E. SUNUNU, New Hampshire

RICHARD J. DURBIN, Illinois

DANIEL K. AKAKA, Hawaii

THOMAS R. CARPER, Delaware

FRANK LAUTENBERG, New Jersey

MARK PRYOR, Arkansas

ANDREW RICHARDSON, Staff Director

MARIANNE CLIFFORD UPTON, Minority Staff Director and Chief Counsel

KEVIN R. DORAN, Chief Clerk

(V)

C O N T E N T S

Page

Hearing held on February 25, 2004 ....................................................................... 1

Statement of:

Gage, John, national president, American Federation of Government Employees; Colleen M. Kelley, national president, National Treasury Employees Union; and Mike Randall, president, National Association of

Agricultural Employees ................................................................................ 80

James, Kay Coles, Director, Office of Personnel Management; and James

Loy, Deputy Secretary, Department of Homeland Security ...................... 7

Walker, David M., Comptroller General, U.S. General Accounting Office .. 46

Letters, statements, etc., submitted for the record by:

Davis, Hon. Danny K., a Representative in Congress from the State

of Illinois, prepared statement of ................................................................ 28

Gage, John, national president, American Federation of Government Employees, prepared statement of .................................................................... 82

James, Kay Coles, Director, Office of Personnel Management, prepared

statement of ................................................................................................... 10

Kelley, Colleen M., national president, National Treasury Employees

Union, prepared statement of ...................................................................... 118

Loy, James, Deputy Secretary, Department of Homeland Security, prepared statement of ........................................................................................ 22

Randall, Mike, president, National Association of Agricultural Employees,

prepared statement of ................................................................................... 136

Walker, David M., Comptroller General, U.S. General Accounting Office,

prepared statement of ................................................................................... 49

(1)

THE KEY TO HOMELAND SECURITY: THE NEW

HUMAN RESOURCE SYSTEM

WEDNESDAY, FEBRUARY 25, 2004

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON CIVIL

SERVICE AND AGENCY ORGANIZATION, COMMITTEE ON

GOVERNMENT REFORM, JOINT WITH THE SUBCOMMIT- TEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE DISTRICT OF CO- LUMBIA, COMMITTEE ON GOVERNMENTAL AFFAIRS, U.S.

SENATE, Washington, DC.

The subcommittees met, pursuant to notice, at 10:05 a.m., in

room 2154, Rayburn House Office Building, Hon. Jo Ann S. Davis

of Virginia [chairwoman of the Subcommittee on Civil Service and

Agency Organization) presiding.

Present: Mrs. Davis of Virginia, Mr. Mica, Mr. Davis of Illinois,

Ms. Norton, Mrs. Blackburn, and Mr. Van Hollen.

Also present: Senators Voinovich, Lautenberg, and Akaka.

Staff present: Ronald Martinson, staff director; B. John Landers

and Christopher Barkley, professional staff members; Robert

White, director of communications; Reid Voss, clerk; Tania Shand,

minority professional staff member; and Teresa Coufal, minority

assistant clerk.

Senator VOINOVICH [assuming Chair]. I’d like to explain that our

Chairwoman, Jo Ann Davis, is on the floor doing something that’s

very important, getting the GAO bill passed this morning, something that we just got finished in the Senate. Hopefully we’ll get

that done and have the President sign it and we can move on with

some changes in our personnel system here in the Federal Government.

I am going to make my opening statement and hopefully Jo Ann

will be back. If she’s not, then we have a problem, because I have

to leave at 10:30 to go over and cast a vote in the Senate.

This joint hearing of the Senate and House Subcommittees with

oversight of the Federal work force is extremely important, for

we’re examining the new human resources system for the Department of Homeland Security. When Congress wrote the Homeland

Security Act of 2002, it required that the Office of Personnel Management and the Department of Homeland Security collaborate

with the Federal employee unions to design a modern personnel

system that meets the mission needs of the Department. This process has taken over a year, and just last Friday the administration

published the regulations for the new human resources system for

the Department of Homeland Security.

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The Department was established to protect the United States

from further terrorist attacks. Make no mistake, the employees of

the Department and the way in which they are managed are critical to ensuring the operational success of this Department and the

security of the United States. Because September 11 happened a

while back, I think we forget, except periodically when the President issues an alert, that we still have serious domestic national

security problems that need to be addressed. That’s why we’ve created this new Department.

It is my hope that this human resources system will facilitate the

recruitment and retention of the best and brightest Americans into

the Department. I always stated, if your business is going to be

successful you have to have good finances and you have to have

good people. If you’ve got both of those, you’re in great shape. We

need to do that in the Federal Government.

It is my hope that this Department will compensate and treat

their employees fairly, that it will provide them the training they

need to reach their full potential and perform their jobs at the

highest level. Training is a high priority with this Senator and

needs to be a much higher priority in the Federal Government. And

we hope that this system will facilitate productive labor management relations, which are so important to any successful governmental operation.

I was pleased also that the Homeland Security Act included several government-wide human capital reform provisions, which I authored.

As important as this is, the new Homeland Security human resources system is notable for another reason. It is a milestone in

the evolution of the Civil Service. It is possible that elements of

this human resources system could be applied elsewhere in the executive branch in the coming years. Therefore, what the Department of Homeland Security is doing and the imperative to get it

right has implications far beyond the Department. I know that the

unions were concerned with this legislation for this reason. They

realize that once this is all over, there’s a good possibility that

other departments in the Federal Government will be asking for

the same kind of flexibilities that exist in Homeland Security.

Director James and Admiral Loy, I would like to compliment you

for the manner in which you worked to design the new personnel

system. You clearly have taken a thoughtful and deliberate approach that should serve as an example to others. I look forward

to your testimony and learning the details of the new human resources system. I would also like to thank Clay Johnson, the Deputy Director of Management at the Office of Budget and Management, who is also involved in this important task.

I must tell you that I was very concerned about the management

function of the Office of Management and Budget. I always said

that there was an OMB, but there was no ‘‘M.’’ This administration

tried very hard initially to put an ‘‘M’’ into OMB. From my meeting

with him, Clay Johnson seems to get it and understand that it’s

important that this be an open process and that you work with everyone.

I congratulate you on the time you have taken. I know that everyone is not happy with the result, but the fact of the matter is

3

that I was concerned that there might be a rush to get it done in

30 days, publish the regs and go through it. I think that you really

spent a great deal of time trying to do this the right way, trying

to give everybody an opportunity to share their concerns with you.

For that I thank you very much, because you took care of something that I was concerned about. I think you conscientiously did

this in a systematic way and tried to be as sensitive as you could

to understanding that if the system doesn’t have the input of the

people that are going to be involved with it, in the long run it may

not be a success.

I’m also looking forward to hearing the views of Comptroller

David Walker. Mr. Walker has been a leader on the human capital

issue, both as an advocate of reform in the Federal Government

and as a practitioner of that reform at the General Accounting Office. And as I said, that’s what Congresswoman Davis is doing

today, giving GAO more flexibility.

As such, his views carry extra weight with me. I was pleased to

introduce and advance this legislation in the Senate. It’s my understanding that similar legislation, is going to pass this morning.

Last but certainly not least, I’m looking forward to the testimony

of the leaders of the three Federal employee unions that represent

the greatest number of employees in the Department. My staff and

I have enjoyed working with the presidents of the unions and their

staff during my time in the Senate. I know that they have serious

concerns about the new personnel system.

When the Homeland Security Act was pending in Congress, I

thought it was very important that there be a dialog among the administration, and the employee unions. In addition, I thought that

the law should allow for third party arbitration of impasses between labor and management. That wasn’t part of the legislation.

Once the legislation passed, as I mentioned, I was concerned that

the administration might rush and try to establish the system

without conducting dialog, and as I mentioned, I’m glad that dialog

did occur. From what I understand, there were robust discussions

between the administration and the unions. While I appreciate that

there are real differences, and I’ve read some testimony that expressed some real concerns, I’m glad that the dialog occurred. I

hope it served to reduce the number of areas of disagreement. I’m

sure that it did.

The 30 day statutory collaboration period in which the unions

will make their formal requests for changes to the personnel regulations has begun. I’m interested in learning what those requested

changes will be. In addition, now that it is over, I’d like to hear

the union presidents’ evaluation of the collaborative process of last

year.

I might also say that one of the big concerns that the unions had

was that the President might exercise his National Security Exclusionary Authority. Many of the unions were very concerned about

this. I’m pleased that the President has not exercised this

authoirity, as many said that he would. There’s a provision in the

law that says if he does, that it doesn’t go into effect until 10 days

notice is given, so that everybody knows it’s going to be happening.

It’s not going to be something that’s done at 2 a.m. So I’m pleased

with that.

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Finally, I will be asking all of today’s witnesses their views on

next steps. It is likely that additional administrative or legislative

changes will have to be made to the new system to ensure that it

works as it should. I look forward to working with the administration, Federal employee unions and my colleagues on this effort.

I ask unanimous consent that all Members have 5 legislative

days to submit written statements and questions for the hearing

record, and that any answers to written questions provided by the

witnesses also be included in the record. Without objection, so ordered.

I ask unanimous consent that all exhibits, documents and other

materials referred to by Members and the witnesses may be included in the hearing record and that all Members be permitted to

revise and extend their remarks. Without objection, so ordered.

Senator Lautenberg and Senator Akaka, I appreciate your being

here. Would you like to make some opening remarks?

Senator LAUTENBERG. I appreciate that, Mr. Chairman. I thank

you for convening this. I’m always happy to see Admiral Loy, his

first name is Admiral. We can’t stop calling him that. [Laughter.]

Anyway, this is a very complicated situation and I think that

having this hearing at this time is particularly appropriate. I

wasn’t here in the Congress when the Homeland Security Act of

2002 became law. But obviously I had an interest and have an interest. If I had been here, frankly, I would have objected to some

of the personnel provisions that are included in the bill, particularly those that denied employees of DHS the same rights to bargain and to appeal personnel decisions afforded to other Federal

employees.

This notion that somehow or other collective bargaining rights

threaten national security, that Federal employees who belong to

a union are somehow suspect is, I find, deeply offensive. It’s tiring

to hear the administration’s relentless attacks on organized labor.

One came up the other day regarding teachers and the education

association. We have to look at this as it affects not only the individuals but the well-being of our country. We have in the Federal

Government, I think, an unusually talented, committed group of

people. And I want to see that we respect their rights and listen

to the things they have to say.

In the case of the World Trade Center calamity, the first responders, who were civilians, filed past the victims on the way

down, the way up, they belong to unions. I challenge anyone to

question the commitment or the professionalism or certainly the

bravery of the union members who gave their lives on September

11 trying to save other people.

I’m a strong believer in protecting the Federal work force. As

someone who has had fairly extensive experience in the private sector, I can attest to the unique commitment, talent and spirit of

public service that we have in our Federal employees.

With regard to the new DHS personnel proposal, it was truly

comprehensive. But within the 167 page plan, there are some troubling and problematic provisions. I’m particularly concerned with a

plan that allows DHS management to install rules, unilaterally, on

the deployment of personnel and the assignment of work.

5

I’m also skeptical about the proposed pay for performance system, which certainly could be subject to political manipulation.

Who’s going to make those decisions and who are they going to talk

to as they make those decision can make a substantial differences

in the outcome.

Also, doing away with the normal GS system probably creates

more problems than it solves. The new system, which sets wages

according to the results of annual salary surveys of private sector

workers in different occupations, different regions, strikes me as almost impossible to carry out in a fair manner. I think it’s unfair

to the Federal workers.

There are conditions that may dictate a format in a region. But

we forget that Federal employment often creates more modest salaries for similar jobs in the public sector than we see in the private

sector. Private sector wages often vary regionally or fluctuate due

to sporadic market changes. And I don’t think that Federal pay

scales should be determined by directly comparing public sector

wages to private sector ones. Nor do I think that this system will

effectively draw the Nation’s best and brightest to work at DHS.

Finally, I’m perplexed why TSA employees would be left out of

the plan. What is there about the screeners that makes them different? Is it because they’re brought in, if they are brought on as

a full agency employee, they would have to be given the right to

organize? I hope that’s not the case, and I am anxious to hear from

our good friend and distinguished public servant, Admiral Loy, he’s

very familiar with TSA, about whether or not the screeners at airports should be allowed to organize.

These words aside, I think we share overriding goals, which are

to attract the best human capital to DHS and make the working

conditions at DHS the most effective and productive that we can

for the 180,000 Federal workers who have been brought together

from lots of different agencies and departments. We want them to

feel good about their work so that their productivity can be at its

highest level.

I hope we can work together to fix some of these problematic

components of the new plan. I welcome our witnesses, and Mr.

Chairman, once again I thank you and I appreciate the opportunity

to make my statement.

Senator VOINOVICH. Senator Akaka.

Senator AKAKA. Thank you very much, Mr. Chairman.

I want to say thank you to you for holding today’s hearing on the

proposed regulations establishing a new human resources system

for the Department of Homeland Security. Also I want to say thank

you to Chairwoman Jo Ann Davis, who has been unavoidably detained this morning. She certainly will be here.

I also want to welcome Admiral Loy to the hearing and say

thanks for many things he has done since he has been in this position. The Homeland Security Act required DHS and the Office of

Personnel Management to work together to propose joint regulations for the new human resources system. I want to applaud you,

Admiral Loy, and the manner in which you solicited and gathered

input for the joint proposal.

Although I do not agree with all of the provisions of the proposed

regulations, I believe that the open, transparent and accountable

6

manner in which these regulations were developed exemplify the

level of cooperation and interaction expected under the Homeland

Security Act and what I would look for in other reform proposals.

The Federal Civil Service is responsible for implementing and

managing Government programs in an effective and responsive

manner. However, defining the proper relationship between the career Civil Service and elected and appointed officials has always

been a critical issue. We share a common desire to ensure that all

employees are able to do their job without undue influence.

I would like to remind my colleagues that the Civil Service Reform Act was passed back there in 1978 to address the various conflicting responsibilities of the Civil Service Commission, which was

charged with providing equal employment opportunity, ethics, protecting the merit system, overseeing labor relations and personnel

management. Congress divided the responsibilities of the Commission because we found that fostering the principles of modern personnel management was inevitably in conflict with the commission’s role in ensuring the application of rules and procedures.

The reforms in the CSRA shored up a cornerstone of the Federal

Civil Service system, by ensuring that Federal employees who are

charged with protecting the interests of the American people have

real and meaningful protections. The passage of the Homeland Security Act in 2002 was to provide managers with work force flexibility, and not reduce the rights and protections of the Civil Service. The act required the new human resources system to be based

in merit principles and provide for collective bargaining.

For DHS to recombine these responsibilities in the Department

suggests that we are no longer on the same page when it comes

to employee protections. Some of the proposals appear to be in direct conflict with the fundamental principles of the Federal Civil

Service and could substantially erode the rights and protections of

Federal employees.

Under the proposed regulations, DHS would create an internal

appeals process to review certain aggravated offenses which require mandatory firing. This internal appeals panel would be governed by individuals who would be appointed by and removed by

the Secretary. There are currently no provisions for judicial review

of panel decisions.

In 1996, Congress granted the Federal Aviation Administration

similar authority to create an internal appeals system. Despite the

inclusion of certain safeguards, Congress reinstated appeal rights

to the Merit Systems Protection Board in 2000 amid concerns that

the internal process was unfair and impartial.

The fact that the proposed internal panel at DHS would be selected by the Secretary and would be required to give deference to

agency mission and operations fails to assure employees and even

me that the panel would be objective and unbiased. Furthermore,

the proposed changes to MSPB processes and the fact that DHS

and OPM could eliminate MSPB appeals should MSPB decisions

fail to give due weight and deference to the Department’s critical

mission would undermine the effectiveness of the independent

quasi-judicial agency.

Likewise, I am concerned that the proposed labor relations system at the Department could strip the bargaining rights of Federal

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employees. Granting the Secretary sole discretion to engage in bargaining to implement agency regulations and select and remove the

members of a proposed internal labor relations panel would eliminate the very essence of bargaining and turn labor unions into policy advisors, rather than active parties and about the bargaining

process.

It has been proven time and again that there must be separation

of management and oversight. Otherwise, conflicts exist. The proposed regulations, while reserving some of the basic rights of Federal employees, is in effect reinventing a square wheel. I look forward to our witnesses’ testimony and their thoughts on how to best

protect employee rights at the Department of Homeland Security.

And I would like to also compliment Director James for her work

on this regulation as well.

Thank you very much, Mr. Chairman.

Senator VOINOVICH. Thank you, Senator Akaka.

It’s the standard practice for this committee to swear in all the

witnesses. If the witnesses could please stand, I will administer the

oath.

Please raise your right hands.

[Witnesses sworn.]

Senator VOINOVICH. Let the record indicate that they have answered in the affirmative.

I understand that Congresswoman Davis is on her way over. But

in order to move forward with this hearing, I’d like to begin the

testimony this morning with Director James.

STATEMENTS OF KAY COLES JAMES, DIRECTOR, OFFICE OF

PERSONNEL MANAGEMENT; AND JAMES LOY, DEPUTY SECRETARY, DEPARTMENT OF HOMELAND SECURITY

Ms. JAMES. Thank you and good morning, Mr. Chairman.

First of all, I want to thank the members of the subcommittees

and I’m grateful for the opportunity to be here today. I’d especially

like to thank Chairman Voinovich and Chairwoman Jo Ann Davis

and Senator Durbin and Congressman Danny Davis for their continued commitment to the best interests of Federal workers and for

their steadfast commitment to the American Civil Service.

I’d also be remiss if I didn’t thank Secretary Ridge and Deputy

Secretary Loy for their leadership and their cooperation throughout

this design process. I think that working together in a true collaboration, I can report to the subcommittee with complete confidence

that we are and have been united as a team with a single purpose

and that is to create a personnel system that will honor those in

service to our country at the Department of Homeland Security.

And as you know, the bipartisan legislation that created the Department gave the DHS Secretary and the Director of the Office of

Personnel Management authority to jointly prescribe regulations

establishing a completely new HR system for most of the Department’s 180,000 employees. Those proposed regulations, published

last week for employee and public comment, represent a historic

step in the evolution of the Federal Civil Service, rewriting the

laws and regulations that govern how the Department classifies,

evaluates, compensates and disciplines its employees as well as

how it deals with its labor unions.

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As originally envisioned and as enacted in law, the regulations

remain firmly grounded in and bound by our Civil Service system’s

core principles and values. As we focus on what is changing, I

think it’s also important to focus on what has not changed: merit,

equal employment opportunity, due process, veterans preference,

and protections against reprisal, discrimination and other prohibited personnel practices.

As we discuss those proposed regulations today, it’s important, I

think, not to lose sight of their genesis. On September 11, 2001,

our Nation came face to face with a horrific terrorist attack on our

homeland. And it was against that backdrop that the President

asked Congress to consider his proposal to create the Department

of Homeland Security. That merger represented one of the largest

of its kind since the creation of the Department of Defense.

As Director of OPM, I am held accountable for preserving and

protecting our core Civil Service principles and values in the new

DHS HR system. And even as we seek to give the Department all

the flexibility it needs to deal with the most ruthless and resourceful of enemies, it’s important to remember those core values and

those principles.

The Department’s new HR system must assure the Department’s

ability to achieve its primary mission: safeguarding the American

people from a terrorist attack and other threats, natural and manmade, to our homeland security. DHS must have the unfettered

flexibility to move people and resources without delay. It must be

able to get the right people into the right jobs at the right time,

give them the technology they need, and hold them accountable for

their performance.

I believe that the new HR system will do so without in any way

compromising the fundamental rights of the Department’s Civil

Service. Even before the enactment of the Homeland Security Act,

and well prior to the legislative debate, Secretary Ridge and I made

a commitment to the Department’s employees and major unions

that if the legislation passed, the new HR system would be designed using a collaborative and inclusive process. I’m here to report today that I believe we have kept that promise.

Over the course of the last 10 months, we have met and talked

to over 2,500 DHS employees and managers in town hall meetings

and focus groups across the country. We’ve consulted with dozens

of experts to identify promising and successful models from the private sector, State and local governments and other Federal agencies as well. We worked with the presidents of the Department’s

major unions and their key staffs, literally providing OPM office

space for the latter so they could be an integral part of the design

process.

And with that input and involvement, our joint design team developed and presented an impressive array of options to top DHS,

OPM and Federal employee union officials for careful examination

and discussion. Those officials, along with a number of highly regarded experts in the field of public administration, provided Secretary Ridge and me with a thoughtful review of the options that

inform the development of the proposed regulations we published

last week.

9

Again, none of this was required by law. It was just the right

thing to do to identify the best thinking and make employees inside

DHS equipped to succeed. And I should say that we will hear as

we go throughout the hearing today that at the end of the day, we

may not all agree on the outcome. But the process is not yet over.

We are in the comment period, and we are looking forward to that

part of the process as well.

Such openness and inclusion are absolutely essential to any large

organizational transformation. Secretary Ridge and I want employees and unions to have a voice in the process. And while we may

not be able to alleviate all of their anxieties nor satisfy their every

request, their honest involvement has contributed significantly to

its high quality and will help shape the future outcome.

Secretary Ridge and I are both committed to continuing this open

and inclusive, transparent collaboration as we begin to finalize the

regulations and then start the implementation process. In doing so,

we will realize the promise and the historic opportunity of the

Homeland Security Act.

I want to thank you again for the opportunity to testify before

you today and look forward to an engaging dialog. Thank you very

much.

[The prepared statement of Ms. James follows:]

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Senator VOINOVICH. Thank you very much, Director James.

Admiral Loy.

Admiral LOY. Good morning, Mr. Chairman, Chairman Davis

when she arrives, and to the rest of the members of the committee.

Thank you very much for a chance to discuss this enormously important foundation element for moving this new department forward in the service of our country.

You all have been enormously strong advocates for the General

Service schedule system over time. And it is enormously important

that we continue to inter-operate, if you will, together to sort our

way through the tail end of this process that we’ve undertaken to

get this very important piece right.

Secretary Ridge is testifying elsewhere today and asked me to

join Director James for this hearing. I’m honored to do so, and

would offer my written statement for the record if I may, Mr.

Chairman, and mention just a few points as a part of an oral opening statement.

First, we report to you today on a task that was explicitly offered

by the Congress in the Homeland Security Act. The challenge so

offered recognized the importance of licensing the Secretary and

the Director to design a new HR system that would meet the needs

of our time to get past the times of the past, including the cold war

or even World War II kinds of thoughts.

The General Service system has served this country enormously

well. But like so many things identified with the cold war, it simply

fails to measure up to the needs now clear to all of us in the very

different post-September 11 security environment. We must build

a sense of urgency in to our HR system, just like we have done

with equipment or procedures or protocols or tools elsewhere in the

other aspects of DHS responsibility. We at DHS have been challenged to think and act in bold, broad, 21st century ways. And I

can offer dozens of examples of having done exactly that.

We must now do so after a very sound, methodical review with

our HR system. I for one believe it’s a fundamental key, a very real

foundation block, for doing what America expects of this new Department.

What do we want to accomplish? First, we want to be able to

meet mission, to meet mission which, as the chairman mentioned,

causes us to remember September 11 on a daily basis one way or

the other. Our system must be designed to safeguard America and

its citizens from terrorist attack and from threats, natural or manmade. September 11, September 11, September 11. Remember that

terrible day. It’s our generation’s Pearl Harbor or our Alamo. And

given that people make the choices and do the things to preclude

recurrence, this HR system is every bit as important to rethink and

rebuild as any intelligence system or any sophisticated sensor.

Clarity, simplicity, efficiency, agility, adaptability, these are all

elements of something called transformation that will make the difference for us. Lots of things tie for sort of a distant second place.

But we must be very concerned about attracting and retaining the

very best we can in the Federal work force. We must reward performance instead of longevity. We must provide competitive pay in

job categories in local as well as national markets. And we must

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protect all merit principles, including whistle blower provisions

that the Director has already itemized.

We must demand timely, efficient decisions from our processes

and from our people. Key flexibility areas for us have to do with

deployment, have to do with technological inserts, have to do with

people assignments, those things our HR system must support. We

believe we have done so in the four basic areas that we were by

law allowed to change. There are actually six that sort of tend to

converge on four.

Remember, our work force is in great majority those people on

line operationally, actually doing this work for America. This is not

like DOD, so to speak, where civilian support, enormously important, is not what is actually on the line doing the work. In DHS,

it is the civilian Federal work force in the trenches.

A word on process, Madam Chairwoman. We are very proud of

the inclusiveness and of the thoroughness of our process. Director

James and Secretary Ridge met even during congressional dialog

and deliberations on the law. Meetings were held with key union

officials, experts were consulted and the work force members were

polled for ideas.

A design team was formed of over 80 people, experienced experts

as team leaders, union members, representatives from work units

across the Department, supervisors, managers, consultants, HR inputs literally from across the land. Sixty or more town hall meetings were held, and more focus groups than that, with our own

work force members at DHS. Senior DHS representatives were on

the stump listening to concerned work force members. Enormously

high quality inputs were received.

The process produced concepts and ideas then offered to a senior

review committee. I sat on that committee with senior DHS colleagues, with agency heads, with assistant secretaries, with the

three Union presidents, with academics, with public administration

experts and for 3 days, we listened very carefully to the presentation from the design team in a very public forum, robust with

discussions and presentations.

The Secretary has since sat down personally, as did Ms. James,

with union presidents to ensure we heard their concerns and ideas,

even beyond the senior review committee. The final product in the

proposed regulations published on Friday reflects significant listening and idea incorporation.

Madam and Mr. Chairman, this is anniversary week for DHS, 1

year. We have just completed our strategic plan for the Department, our vision, if you will, of the way ahead. One of our seven

strategic goals is organizational excellence. This new HR system is

our chance, with the Congress’ blessing, to step up and do the right

thing. This new system will pay for performance when lesser performance would jeopardize America. It will clarify and simplify job

classifications. It will recognize differences in local variations in

pay markets. It will ensure the ability to act quickly and decisively

when appropriate to secure America. It will introduce new technology now to improve performance. It will resolve disputes quickly

and fairly. It will protect merit principles. It will set standards for

all of Government to emulate, and it will preserve union bargaining rights over important working conditions.

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I believe this is the right system for the right time. As the Director mentioned, we began on Friday a 30 day comment period which

offers still more opportunity to work with the committee, with the

members and the staff, to work with the unions, to work with all

who would comment, so that at the end of that effort, we will have

the very best system we can possibly design.

I believe this is one of the most important changes we potentially

can make in furthering the mission of this Department. The comment period began Friday, we look forward to offering every opportunity for continued dialog. This is a chance for us to discuss proposed regulations that have the potential to continue the evolution

the chairman spoke of in this system that serves America so well.

Thank you, Mr. Chairman. I look forward to your questions.

[The prepared statement of Admiral Loy follows:]

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Senator VOINOVICH. Thank you very much, Admiral.

I want to make one comment before I turn the meeting over to

my co-chairman, Representative Davis. I envisioned that we would

be having this hearing after you did your 30 day period. And this

is going to give everybody, including those that are proposing the

regulations and those that have some questions, to comment publicly during this period. In other words, even without this hearing,

there is a chance for everybody to look in and see what’s going on

and what your recommendations are and what the concerns are of

stakeholders.

I was pleased to hear from you, Director James, that it’s not

over, that you’re still listening. That’s very positive. Again I want

to thank the two of you and the team that you have for taking the

time to try and do this the right way.

Senator LAUTENBERG. Mr. Chairman, I have a question. I assume the record will be open, because we have a vote now over in

the Senate, and we’ll submit our questions in writing. We thank

our colleagues from the House for joining us for today’s very important hearing. We look forward to an outcome that’s going to try to

satisfy everybody. Ms. James and Admiral Loy, you’re both used to

this kind of thing, so we know that it’s going to come out right.

Thank you very much.

Mrs. DAVIS OF VIRGINIA [assuming Chair]. Thanks for your patience with our musical chairs here. Today’s sort of been Murphy’s

law, if it could happen, it will, and it has. I apologize, I had to go

over to the floor to manage the GAO bill that is a very important

piece of legislation we passed out of this committee. So I do apologize.

I’m not going to take the time to do an opening statement, other

than to publicly say how much I appreciate Senator Voinovich and

his leadership on this issue as well. It’s just a real pleasure to work

with him. I thank him and his colleagues for coming over today.

I would like to recognize our ranking member, Mr. Davis, if you

have an opening statement.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman. Because of the logistics of what I’ve got to do, I am going

to read an opening statement and ask that the witnesses just give

me the opportunity to do that.

Chairman Davis, House and Senate colleagues, witnesses and observers, we have embarked on a sad and troubling era in the history of Civil Service. The enactment of major legislation transforming the personnel systems of the Government’s two largest agencies, DOD and DHS, has broken the back of a Civil Service that

is grounded in the fair and equitable treatment of employees.

Proponents of these changes argue that the current system is

cumbersome and inflexible. But are agencies that are being granted

exemptions from Title V fixing what is cumbersome and inefficient

with the system, or simply what is inconvenient? Regrettably, the

fixes imposed are radical, undermining the rights of workers, while

empowering management in a disproportionate, unbalanced manner.

This ad hoc and non-transparent approach to reform will not

serve us well. I suspect it will make it more difficult to maintain

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stability within our work force. I am concerned that productivity

and customer service may suffer as a result.

The title of this hearing has it almost right, the Congress and

this administration have thrown out the key protections that employees relied upon to ensure fair treatment and a stable work environment, their appeal and collective bargaining rights. This was

done, the proponents say, for the sake of homeland and national security. I greatly doubt, however, that the record will reflect that

this sacrifice has made America any more of a homeland or any

more secure.

I thank the witnesses for coming and look forward to hearing the

rest of their testimony, and thank you, Madam Chairwoman, for

holding this hearing.

[The prepared statement of Hon. Danny K. Davis follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Davis.

Again, I’d like to say thank you for your patience to all of our

witnesses who are here today.

I’d like to start out with an opening question to, I guess this

would be to Admiral Loy. What do you believe to be the most significant improvements to managing your employees that would result from implementing your proposed new personnel system?

Admiral LOY. Madam Chairwoman, I think the sort of general

notion of why we think this undertaking is so important probably

goes back really to the dialog that was part and parcel of the Congress’ deliberations that resulted in the Homeland Security Act.

This world we are living in post-September 11 is just a dramatically different security environment than we have ever lived in before. For several hundred years, we took great comfort in these

wonderful moats called oceans on either side of us that precluded,

we felt, literally up to September 10, 2001, an opportunity for this

impenetrable superpower to be challenged in ways that all of a

sudden manifested themselves on September 11.

And in the midst of that mission that has been offered to this

Department to take on for the Nation, that is to secure homeland

and its citizens against those kinds of attacks, we need the attributes of agility and quickness and adaptability that are not necessary part of a system that requires so much conversation in advance of action.

We want very much to hold onto what was at the heart of the

1978 legislation. As you go through our recommended package, you

will find attention and devotion to those principles from the beginning to the end. So the notions of merit and whether it’s about the

end, the boards that currently define our lives, even things like the

EEOC and others, we are fundamentally supportive that those notions continue as support elements for our work force.

But we also want in this very new security environment to attract and retain high performers. We want to reflect on what’s different about a locale in Portland or Chicago or Los Angeles that

could make us competitive with local folks in the hiring process, to

make sure we get the best employees there. We want to reward

and incentivize performance rather than longevity in the process of

due course of business. We want to induce timeliness and efficiency

in everything we do. And most of this often occurs in the pre-event

world that we live in today.

So as we are in the prevention and protection business of our security conscious Nation, those attributes in an HR system are fundamental to the foundation of being able to do those things well.

Mrs. DAVIS OF VIRGINIA. Your regulations, your plans that we’ve

seen, they have a lot of changes for Federal employees. And I know

they’re very nervous. How can you assure our employees that they

are going to be treated fairly when it comes to the pay system?

Admiral LOY. I think there absolutely must be a marketing dimension, a training dimension and education dimension to our effort over time. It’s a matter of not being ready to turn the switch

on, so to speak, until that education and marketing effort has been

accomplished.

We, if you look carefully in the President’s budget request for

2005, a lot of dollars are being asked for that allow us to make an

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investment in the training required, so that supervisors are very

good at the performance and appraisal systems that we are considering putting into motion through this new system. We want very

much to hold on to those aspects of the Civil Service system at the

moment that has sort of served us so very well in protecting the

interests of the Federal work force.

Senator Lautenberg’s comments were right on track, the heroism

of Federal employees on September 11 or on any other day is not

in question here. I have found myself either in uniform or in public

service for almost 45 years. I have yet to find a Federal worker who

comes to work in the morning with the intention of not doing a

good job. They come with the intention of doing all that they can

to do what we need to do.

So there’s never a question in any of the design work about

whether we mistrust or whether there is some challenge associated

with why we’re doing what we’re doing. We’re doing this because

the new security environment, which is largely resident in the

Homeland Security Department, requires aspects of work from employees that we cannot hope are there any more, we must mandate

that they be there.

Mrs. DAVIS OF VIRGINIA. My time is up, but I want to followup

with one quick question on the pay, because I think that’s one of

the things that is probably worrying the employees more than anything. Verbal communications can be used as a basis for performance. Can you give me an instance of when a supervisor or manager would use a verbal communication for a performance expectation as opposed to a written communication, and then that verbal

communication be used toward their performance? I think I have

that right.

Admiral LOY. I think it is right on to one of the sensitive foundation blocks of how we deal with performance appraisal on one

hand, then hold accountability in terms of performance to that. I

think there are probably countless examples of where a supervisor

in the thrust of crisis or the notion of preventing a crisis from coming on would deliver verbal direction to an employee to do things

that perhaps are outside the mainstream of the 24 by 7 kind of

work that employee does.

Holding that person accountable thereafter to the kinds of things

that truly make a difference to whether or not this Nation handles

the upcoming crisis well or poorly is along the line of what you’re

talking about, Madam Chairwoman. And the ability that we have

to have that agility within the system, such that whatever the

written performance process is can be adapted, can be made agile

by verbal instructions to get work done that absolutely must make

a difference in our ability to secure America are the kind of things

we need to go to.

Mrs. DAVIS OF VIRGINIA. My time has expired. I’m going to go on

to one of my colleagues, but we may have a chance for a few more

questions.

Admiral LOY. If I may, just a couple globals. No jobs lost, no pay

loss as we enter this new system, and an opportunity over time to

effect a sort of pay process that recognizes across the board increases on an annual basis, very much a part of what we listened

carefully and heard from union representatives during our debates.

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Discussions associated with local differences between categories of

work in one corner of the country or another, the opportunity to reflect that on a fair and equitable basis to Federal employees with

their local competitors for those same kinds of jobs.

And then last, the idea that superior performance can be

incentivized by yet additional dollars coming your way as both a

reward and incentive for continued high performance. That notion,

as a pay for performance which still holds onto the basic principles

of satisfactory performance yielding pay raises on an annual basis

is a systemic notion that we have to educate and sell to our employees.

Mrs. DAVIS OF VIRGINIA. Thank you, Admiral Loy. I might say

on the process, I was delighted to hear that you included so many

people for the input on that process.

I’d like to yield now to Ms. Holmes Norton for questions.

Ms. NORTON. Thank you, Madam Chairwoman.

This is an important hearing. I can only hope that the good oversight, Madam Chairwoman, that you’re offering, has some effect on

OPM. I regret that we seem to be on a kind of 2 day week, which

is a 1-day week, I have another hearing at 11 o’clock, I’m the ranking member and may have to run back and forth.

Let me say that what I look for when there’s a change is evidence of best practices. Because frankly, I sympathize with what

you’re having to do in designing a new department, making sure

that personnel, along with everything else, comports with what we

need in the new era of global terrorism.

But I have to tell you, I was a member of three corporate boards

before I became a Member of Congress. I was also a member of a

UAW appeal board. I got to see on both sides how corporations,

these were magnificent corporations, some were organized and

some were not, and I got to see how unions go with things, up

close. I also taught labor law.

So when I look, I come at it with eyes that go in several different

directions. The first thing it seems to me you do when you’re faced

with your kind of problem, which is to take a whole personnel system, turn it on its head and think, what effect will this have on

the people who are going to work here, particularly if they’re dealing with homeland security. Because you can mess with the morale

and the way people do their jobs in a number of agencies. You mess

with this, you’re messing with us.

So I’m really looking for evidence of best practices. My question

is, where did all of this come from? Because I don’t see in this

much that indicates what I understand to be best practices. You

will see that employees think, well, what’s happening there are excuses to do the kinds of changes that management has always

wanted to do. I have problems with consultation. I have problems

with changes that seem to me to be truly gratuitous.

Let me give you an example. I can understand the reduction of

bargaining on some matters, we’re talking about the Homeland Security Department. But here you’ve come forward with permissive

subjects, now, permissive subjects, are no longer subject to bargaining, even at the agency’s discretion. Well, then agency might decide, I may be able to implement this matter more easily if I sit

down and negotiate with my employees. And management is going

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to say, I don’t even want that discretion. And you’re telling me that

a Fortune 500 company would in fact do that.

Another example of gratuitous changes, why in the world would

you want to eliminate the post-implementation bargaining? I mean,

you’ve already done it. Bargaining doesn’t mean that you have to

do what the other side says. Why in the world eliminate that? And

have you thought about the effect you’re having on your employees?

I want answers to both of those questions. Why you have eliminated those, and what factor has gone into the fact that you are

fooling with folks who have undergone the most humongous change

in their work life, and what effect is this going to have, not on how

they feel, but on whether they do the job they do have to do in a

sensitive agency charged with protecting the residents of the District of Columbia and the United States of America?

Admiral LOY. Let me take a stab at it first, Ms. Norton. Absolutely we are sensitive to the impact this would have on our work

force. That is largely why the design process was so inclusive, to

hear from thousands of them in the due course of the design work

undertaken. Beyond that, we had at the table at our design team

and at the senior review committee consultants from, I don’t know

if it was those specific Fortune 500 companies that you were part

of, but we reached into corporate America, we reached into all

those corners you describe, whether it was academic, consultative

expertise, to get the best practices, as you describe them.

Ms. NORTON. So the bargaining at an agency’s discretion, when

management says, I want to be able to bargain, you’re telling me

that Fortune 500 companies have said, that’s a best practice, that’s

how to get the most out of your employees?

Admiral LOY. What you asked me for, ma’am, was a

description——

Ms. NORTON. I gave you an example. I really gave you an example so you wouldn’t be talking in abstractions. I gave you a concrete

examples of what, that I regard, because I don’t think everything

you’ve done here is wrong. I gave you a concrete example of something that I believe no Fortune 500 company that looks at its bottom line would do. And I want to know where that came from.

Admiral LOY. It came from the dialog of the debate that we took

on over the course of this 9 months. The discretion at DHS about

bargaining is arrived at the Department. So our challenge in that

regard was to build a system that recognized that discretion. And

it has to do—every moment of this goes back to the——

Ms. NORTON. This is at the discretion, Admiral Loy, this at the

agency’s discretion. I want you to tell me why, if the agency in its

discretion wants to bargain about certain issues because it believes

that is the best way to get the maximum from its employees, how

that hurts management.

Admiral LOY. We just feel that the discretion of that bargaining

should be at the Secretary’s level at DHS, ma’am, given the mission that we have to conduct for the country.

Ms. NORTON. So this agency is going to be run from the top up

by somebody who has nothing to do with folks at the management

level, and even if the agency wants to decide that on certain issues

the best way to get this done. That’s what I’m talking about, to get

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this done is in fact to operate in a consultative way with employees. You say the top of the agency should make that decision.

Admiral LOY. We believe so.

Ms. JAMES. I would just add as another factor, at the discretion

of the Secretary, because of the unique mission of the Department

of Homeland Security, with the information that may exist at the

Secretarial level that may not exist at the agency level, that it certainly would be important to have the input of the Secretary to

make those determinations.

Ms. NORTON. I have no problem with input. What I’m asking is,

suppose there’s input and the agency and the Secretary have a discussion, and the Secretary gets, it looks as though this is a Secretary’s decision period, like it’s not up for discussion because there

is no discretion.

Ms. JAMES. I’m sure that there would be that kind of give and

take. But at the end of the day, that kind of discretion needs to

rest with the Secretary, because of the unique mission of that Department.

Ms. NORTON. But there is no discretion. So I take it that the Secretary doesn’t even have the discretion.

Admiral LOY. But he does, ma’am. The Secretary has that discretion to make the choice as to whether or not he wants to do that

at the agency level.

Ms. NORTON. So you’re telling me that the Secretary then——

Admiral LOY. Can make that judgment.

Ms. NORTON [continuing]. Can decide that there will be bargaining on permissive subjects and that is your intent here?

Admiral LOY. Yes, ma’am.

Ms. NORTON. Thank you very much, Madam Chairwoman.

Mrs. DAVIS OF VIRGINIA. Thank you, Ms. Norton.

I’d now like to yield to our distinguished co-chair, Senator

Voinovich.

Senator VOINOVICH. I apologize for having to skip out. In examining the proposal, it’s clear there are still many details to be worked

out. If any of these questions are redundant, just say we’ve answered it already and I’ll look at the record.

When do you plan to have all the details of this new personnel

system worked out? Will there be additional regulations issued?

Will additional rules be issued as directives as opposed to regulations? Is this being done intentionally so as not to cast anything

in stone, so to speak?

Ms. JAMES. Let me just speak a minute to the process. We are

now in the comment period, and I believe this is one of the most

important periods in the entire process. For those who watch these

things carefully, we have gotten to the point where we have issued

the regulations, they are out there in a very transparent way.

When Secretary Ridge met with the union presidents, he encouraged them to keep the dialog open, and at the end of that period,

we will sit down, this has been a collaborative process from the

very beginning. We are in a period where we still have the opportunity to refine, if necessary, to receive input from Members of

Congress as well as from our union presidents, as well as from employees within the Department. And we are listening to and incorporating their ideas and comments as well.

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I would add to what Admiral Loy said in terms of the admonition

that we look at best practices. I can assure you that we did, that

we had some of the best subject matter and technical experts in the

country, as well as from the Academy, as well as from good government organizations. And this is the culmination of that process.

Senator VOINOVICH. The point I’m making is, after this is over

with, are there going to be any additional rules issued as directive

as opposed to regulations? In other words, are the regs going to be

comprehensive so that we can pretty well say that’s it, and not

have some new directives coming out later on?

Ms. JAMES. I think the regulations will be very comprehensive.

But for those who have been at this a long time, they know that

the implementation and how this gets interpreted is as important

as well. For that reason, the Secretary and his staff, have come up

with a very comprehensive implementation strategy, which is inclusive as well. So those individuals who have been at the table for

the development of the regs will be at the table for the implementation as well.

Senator VOINOVICH. That’s what I’m getting at.

I’m also concerned about parity between the classification and

compensation systems of law enforcement personnel. As you know,

GAO noted in a study published last year that TSA, which was

given great personnel flexibility, drew away hundreds of uniformed

officers from Capitol Hill Police, the Uniformed Secret Service and

the Park Police. While this was beneficial to TSA, it was detrimental to these other police forces that are facing the same challenges

of greatly increased security in the face of possible terrorist attacks

against national leaders, facilities and monuments.

What did your design team do to avoid similar unintended consequences with this personnel system? As you know, I’ve asked

OPM to conduct a study of Federal law enforcement pay and classification. That study is due on April 30th of this year. What I’m getting at is, what have you done to recognize that’s a problem, so

that once this is over we just don’t have various agencies cherry

picking other agencies because of the better pay that’s being provided?

Ms. JAMES. I think that’s one of the reasons why it’s important

Congress did what it did by including OPM in the process. Because

we do have that Government-wide eye and have the opportunity to

say, if something happens over here, what is the implication and

the impact over here. We want to make sure that the Department

of Homeland Security has the best personnel systems that will

meet their mission.

But we also have an obligation and an ability to look Government-wide. So we always had one eye to that.

What I would say is that in the process of designing their pay

systems and their classification systems, and they sort of go hand

in hand, that the simplified structure and the increased flexibility

that they have will give them the freedom to make sure that those

very issues that you addressed are looked at, and with an eye toward what the implications are going to be across Government.

We’ve got to bring some, and if the Senator gets to the larger question of the flexibilites that we grant at the individual level for the

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departments and the unintended consequences that they have Government-wide.

And I think as we designed these systems within the Department of Homeland Security, our desire was to make sure that even

within the Department there was not the opportunity to cherry

pick between the various agencies. And Admiral Loy may want to

talk about how they’re going to address that internally.

Admiral LOY. Just a moment, sir. First of all, I have to confess

to being the cherry picker at TSA when much of that was going on

with the immediate crisis of staffing that agency and getting the

job done that the Congress demanded and the very aggressive

deadlines that were offered in that earlier legislation, the Aviation

Transportation Security Act.

I think there is work to be done here, sir, and I think there is

also congressional opportunity for participation. As you know, we

can touch pay but not benefits. So we’re in the algorithm of total

compensation, the adjustments that might be going on locally or

might be going on elsewhere in the Federal service, have a different benefit package than—we can’t go there. So the

inconsistences may be more than in just pay itself. That will take

the consciousness of the Committee to be helpful, perhaps, with respect to sorting those kinds of things out when appropriate.

One initiative, for example, sir, that we’ve undertaken in the Department is the new CBP officer, this new organization agency that

has been created by a combination of what heretofore has been INS

functionality and Customs functionality, and even the Agriculture

piece that has come over into the Department. The new Customs

and Border Patrol officer will have one uniform, one package, one

set of pay benefits and that will have already begun the process of

eliminating that internal cherry picking, if that is the term of art

we’re using today, within the Department, and as an example for

where we can do things better, if you will, across the board.

I also think Kay’s comment about OPM’s role in our collective design work, she brings to the table concerns across Government in

other agencies that make sure that we are not designing something

that ends up being problematic elsewhere.

Senator VOINOVICH. I’d appreciate a memo from you on how Congress can get into that. If you’re looking at a benefits package,

you’ve got to compare the whole thing.

Admiral LOY. Yes, sir. Uniformed services, Secret Service pay

package is established in law. There are other elements of other

agencies’ forces that are established in law. So we are bound by

those as we deal with making an effort toward consolidating our

notions across the board for the Department.

Senator VOINOVICH. Is my time up?

Mrs. DAVIS OF VIRGINIA. You can take as much time as you’d

like, Senator.

Senator VOINOVICH. Admiral Loy, in your opening statement, you

made reference to the regulations removing the requirement for

collective bargaining over the impact and implementation of core

management rights, including deployment of personnel, assignment

of work and use of new technology. Can you provide specific examples of actual situations in the past where collective bargaining

36

over these types of activities prevented management from meeting

mission needs?

Admiral LOY. I think there are, I use the phrase prevention, on

the prevention side of a God forbid event, in order to make certain

that we have transformed the force and the authorities associated

with using the Federal force to get people in places that we need

them immediately without, and when I say immediately, it’s sort

of whatever the intelligence stream is telling us at the moment. It’s

about the idea of taking a product that has just been perfected by

our science and technology work in the Department and instantly

getting it into the force so it’s a usable sensor wherever it might

be necessary.

So the notions of deployment, the notions of assignment, the notions of technology to be used as efficiently and as quickly as possible broaches the requirements that we have offered in the bill.

There’s a number of things in the past where the idea of new national procedures, for example, if the agency determines that we

can use U.S. Visit, the new program, in a manner different than

we have heretofore used it, because we’ve uncovered a new protocol, or uncovered a better way to do it, and there are people implications to it, we need to be able to take advantage of those kinds

of things immediately. The idea associated with technology, if the

VACA system in our ports all of a sudden has dimension to it that

allows us to be more sensitive to bio and chemical threats to the

Nation and it is a requirement that our people be so trained to use

it immediately, we don’t want to wait over time until those kinds

of things can be put into place.

Senator VOINOVICH. Are you saying that the examples that you

gave me are all subject to collective bargaining and would slow the

process down?

Admiral LOY. At the moment, many of them could be, yes, sir.

And we believe in the interest of mission, which is always where

our least common denominator goes back to, we want to make absolutely certain that mission is served first in this new Department.

Senator VOINOVICH. I’ll just ask one more. I’m sure this is on a

lot of people’s minds. The power of the Secretary to remove members of various boards described in the regulations may cause employees to question their independence. How do you plan to ensure

the independence of members on the labor relations board and the

mandatory removal panel?

Admiral LOY. I’ll let Kay join me in the answer. The bottom line

is, we imagine terms to those boards, so that it’s not a situation

where the Secretary can appoint today, unappoint tomorrow, rather

that the terms associated with the appointments to those boards

would be such that the opportunity for mischief, as someone had

termed it earlier, is simply minimized or eliminated, we would like

to think.

The real notion here is those boards must be sensitive to the mission of this Department as it is being driven by the Secretary. That

requires a sensitivity to the work to be done and therefore requires

a sensitivity to how the kinds of appeal process things might come

forward to it.

37

There is a notion in the regs that has prompted a number of

comments with respect to those mandatory removal offenses, and

what that inventory might be and how does the Secretary appoint

at the moment a board to review an appeal from an adverse action

associated with that process. In that instance, I would offer first of

all, we imagine a very, very small number of those kinds of things.

They are enormously egregious notions.

For example, on the line as a CBP employee at the portals of our

country taking a bribe to allow someone to go through the system

without being tested, without being dealt with as appropriately as

the protocols call for. The notion of intentional abrogation of classified material to sources that we simply don’t want to have them,

it’s that kind of egregious offense that would cause the Secretary

to have concerns and nationalized mandatory removal as a penalty

for such activities.

That list, I think, will be enormously short. It is still to be developed. And I reinforce the notion that Director James has from the

very beginning here today: this remains a work in progress for us

and the comment period that has just begun on Friday is our last

best chance to get the best ideas on the table that we can. But

those kinds of notions, sir, I think go directly to your question.

Senator VOINOVICH. It’s really important that these boards are

looked upon as being independent.

Admiral LOY. Independent and objective, yes, sir.

Ms. JAMES. Madam Chairwoman, can I just state the obvious in

answer to that question? That is, for those boards to be effective

at all, they must be credible. And they must be credible to the employees. So the Secretary, of course, in making his selections for

who would serve on those boards, would have to identify individuals that pass the straight face test in terms of credibility.

I believe that with the integrity of the Secretary and the people

that he could draw from, you can put together boards like that. I’m

confident that he will, that employees will feel comfortable going

before them.

Senator VOINOVICH. I’ve been involved with lots of boards, at the

State level and the local level. If we put some provisions in there

that they have to be composed of so many Republicans, so many

Democrats, we balance it and try to get good people. The fact that

we go through that process adds credibility to those boards and

commissions. If you’re going to replace a familiar system with a

new one, it’s really important that it be considered legitimate, and

as you say, pass the straight face test.

Admiral LOY. Yes, sir, I could not agree more. In fact, it’s one

of the things that we received an enormous amount of commentary

from our own work force on, was not so much the makeup and getting the right answer at the other end, which of course goes without saying, but the timelines associated with getting those questions resolved quickly is very, very important to the work force at

large. They want those answers back quickly so they can get on

with their lives.

Senator VOINOVICH. Thank you.

Mrs. DAVIS OF VIRGINIA. Thank you, Senator. I just want to, on

this point, clarify something. The credibility of who the Secretary

appoints wouldn’t concern me so much as, and I just want to make

38

sure that I heard your answer correctly, Admiral, to clarify. In

there I think it says that the Secretary can, they’re appointed for

fixed terms, they can be removed for inefficiency and some other

nebulous sorts of words. But if I heard you correctly, there is going

to be something prepared that will specify what is inefficient, exactly for what reason the Secretary could remove the person from

the Board.

But what I’m getting at is, what would keep the Secretary from

saying someone is inefficient just to remove someone that he

doesn’t care for and he doesn’t like the way they’ve been handling

the problem?

Admiral LOY. I think that’s a very, very good point and we must

be very specific in the terms associated with both appointment and

potential causes for removal.

Mrs. DAVIS OF VIRGINIA. So you’ll be doing that, because it’s a

work in progress?

Admiral LOY. Yes, ma’am.

Mrs. DAVIS OF VIRGINIA. Thank you.

I would now like to recognize the gentleman from Maryland, Mr.

Van Hollen.

Mr. VAN HOLLEN. Thank you very much, Madam Chairwoman.

I would like to get an update on where you are, I just wanted

to focus on the questions of rights in these regulations. As I understand it now, there are certain types of so-called infractions that

would result in an in-house panel as opposed to the Merit Systems

Protection Board, is that right?

Admiral LOY. That’s right, sir. And a singular source that would

be dealing both with performance and conduct kinds of things,

rather than multiple sources, as indicates today.

Mr. VAN HOLLEN. How would the members of that internal review board be chosen? The question is, if we’re going to substitute

this internal review board for what is clearly an independent

board, we want to make sure that it is perceived to be fairly selected by the employees who could conceivably be coming before the

Board. What is the plan for that?

Admiral LOY. The plan is largely as we have just been discussing, sir, which would offer the Secretary the opportunity to make

credible appointments to that internal board that face the music,

so to speak, of objectivity and credibility in the fashion we were

just describing.

Mr. VAN HOLLEN. Will you be consulting with the representatives of employees in making that selection?

Admiral LOY. Absolutely, those conversations would in fact take

place.

Mr. VAN HOLLEN. As I understand it, with respect to appeals

that do go to the Merit Systems Protection Board, the new regulations eliminate the MSPB’s current authority to modify agency imposed penalties. Why would we do that in these situations?

Admiral LOY. Well, it’s conditioned on the notion that charges

are sustained by the board and on the occasion of the sustainment

by the MSPB on the chargee that would come to it, the system as

designed would not permit the MSPB to make adjustments. They

can make recommendations to adjusting, but the Secretary would

have the final say on the results of that deliberative process.

39

Mr. VAN HOLLEN. Is that different than appeals that take place

in other agencies throughout the Government?

Admiral LOY. At the moment, the MSPB can in fact make adjustments downward, for example, in the penalty process, if you will,

that would be forthcoming.

Mr. VAN HOLLEN. I mean, the idea of having an appeal, obviously, to the MSPB to have this independent authority, if they conclude that the penalties applied by the Department are unfair, at

this independent body, why wouldn’t we want to allow them to adjust the penalties for what they consider to be a just outcome? I

mean, this is an independent body. Why wouldn’t we want to allow

them to do that?

Admiral LOY. Yes, sir, I understand your question. And the notion as constructed in the efforts so far that is in the regs would

offer the MSPB every opportunity to make recommendations to

modifications.

Mr. VAN HOLLEN. I understand that. Why would we want to take

away from the MSPB in this instance the rights they have to address grievances for employees in any other department of the Government? Why is that necessary?

Admiral LOY. We just feel that in order to be sensitive to the

unique mission of this Department, the Secretary’s prerogative is

the more appropriate choice.

Mr. VAN HOLLEN. And I understand you’re also changing the

burden of proof with respect to claims made to MSPB. Is that correct? In other words, the preponderance of evidence standard,

which is applied throughout the Federal Government, which applies in courts of law throughout this country in civil cases, you

want to change that, you want to reduce the burden of proof with

respect to the appeals made from the Department of Homeland Security?

Admiral LOY. Yes, sir. At the moment in our work, on the performance side of the house, the burden of proof is at a substantial

level. And for conduct offenses or appeals it’s associated with preponderance of evidence, as you describe. The standard of proof that

is being offered in the construct in the regs is that substantial is

adequate for both performance and conduct paths.

Mr. VAN HOLLEN. Well, let me ask you this. If someone’s accused

of a certain infraction, the preponderance of the evidence standard

means when the fact finders look at the evidence, they conclude

that it’s more likely than not that the infraction occurred, right?

Admiral LOY. Stronger than substantial, yes, sir.

Mr. VAN HOLLEN. More likely than not?

Admiral LOY. More likely than not.

Mr. VAN HOLLEN. The preponderance of the evidence, the scales

adjust to say, looking at the evidence as a fact finder, why would

we want to say, even where we don’t find that it’s more likely that

this infraction occurred, that we can still punish the individual,

even though the evidence doesn’t show that it’s more likely that an

infraction occurred than it didn’t, why would we want to do that?

Admiral LOY. We just feel that in the interests of supporting the

mission of this Department, in supporting the general notions of

simpler, faster, fairer processes——

40

Mr. VAN HOLLEN. Well, how is that fairer? How is that fairer,

to be able to punish an individual, even though the evidence, the

preponderance of the evidence, the weight of the evidence doesn’t

show they committed a violation? How is that fairer?

Admiral LOY. These are simply, sir, just to legal, technical mechanics. We believe the substantial standard is adequate to the

test.

Mr. VAN HOLLEN. Well, I wouldn’t call these technical. They’re

substantive changes. And that’s obviously why they were made.

And it’s a departure from the standard that we apply throughout

the rest of the Federal Government. I would hope that in the process, as we continue to review these regulations, you take a serious

look at what clearly, I don’t think can be defended. I don’t think

you can defend changing the rules of evidence, essentially, on the

basis of national security in this case. It’s just a matter of fairness.

Thank you, Madam Chairwoman.

Admiral LOY. We look forward to that discussion, sir.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Van Hollen. Now I’d

like to recognize Mr. Mica.

Mr. MICA. Thank you. I’d have to disagree with my colleague on

that last issue. I think in the instance of protecting the homeland

that these positions are different. Substantial should be adequate.

In that regard, let me just ask a couple of questions. You have,

regulations are silent on judicial review of decisions of Homeland

Security Labor Relations Board or the panel that will decide on

mandatory removal offenses. When would you have such a list compiled and what would you anticipate would be considered mandatory removal offenses, and would be criminal acts and things of

that nature?

Admiral LOY. Yes, sir. Mr. Mica, as you know, having worked together with us over the last couple of years on the aviation side of

the House a lot, the whole idea of this work that we’re involved in

offers forward some notions of mandatory removal from this work.

If we find ourselves doing things such as uncovering folks who

have with fraud or bribe accepted personal gain and turned their

backs, so to speak, on their responsibilities as securers of the homeland. The whole notion of the kinds of material that we work with

day after day, if an employee would breach classification boundaries and turn material over or look the other way when those

kinds of things are possible. Those are the kinds of egregious

things that will find their way onto what I think will be a very

short list of these——

Mr. MICA. It would be your intent, though, to not have appeal,

those offenses eligible for appeal?

Admiral LOY. There would be an appeal to a board of the moment established by the Secretary to hear it.

Mr. MICA. But not to the Merit Systems Protection Board?

Admiral LOY. Judicial review, sir?

Mr. MICA. Or to the merits.

Admiral LOY. I think we have work to be done on the judicial review of, but it would not be to the MSPB. It would be to in the

cites that you’re giving me.

41

Mr. MICA. When we created Homeland Security, one of the

things we wanted was a performance based organization and the

ability to fire non-performers.

Admiral LOY. Yes, sir.

Mr. MICA. You’ve made some improvement, I see, in adverse personnel action, speeding up the process. Having chaired Civil Service for 4 years, one of the problems I found is you couldn’t get—

well, first you couldn’t get performance based standards, and second, you couldn’t get rid of poor performers. You have some of that

process here, and you’ve shortened that and I commend you for

that.

But my concern is that we allow people in one of our most critical areas, that’s homeland defense operations, to game the system,

to not be able to fire them, one for bad performance, I’ve looked at

your pass-fail, which you don’t do, you have a different system in

place. But we should have the ability to clearly fire poor performers

without a lengthy appeal and gaming the system.

The second, and I see you speed up that process, but they still

game it. I see gaming possibilities in the appeal process. You can

appeal an adverse personnel action, you can also appeal pay banding. Do people get two bites, can they get two bites at the apple?

Admiral LOY. No, sir. Under the designed reg, there would be

only one bite at the apple.

Mr. MICA. And then finally, this stuff gets to the Merit Systems

Protection Board. What’s your current backlog time of processing

actions before the board, Ms. James?

Ms. JAMES. I don’t have authority over the MSPB.

Mr. MICA. I know, but do you have any idea?

Ms. JAMES. I’m not entirely sure. I know that they do have a

backlog, and I know that they have been very helpful in working

with us in this design process to streamline the process and to be

sensitive to the mission.

Mr. MICA. I’d like for the record the time of the current backlog

before these various boards and then the process. It was years, I

mean, nobody ever got fired, everyone gamed the system. The other

game that’s played is either poor performers or people who would

have some action taken against them, adverse personnel action,

then turn around and they’re put in sort of a limbo or moved to

another position while they’re gaming the system. Is there any prohibition in what you’re proposing on gaming the system for poor

performers?

Ms. JAMES. Let me just say a couple of things about what the

Department did that I think are creative and innovative. They did

in fact look at ways of streamlining the system. The Department

of Homeland Security had the opportunity to completely take out

the MSPB, they did not. But what they did is sat down and worked

with them and said, how can you work with us to streamline the

process so that you can be sensitive to our mission and make sure

that there is an appeal process in place.

Mr. MICA. And you streamlined that on the short end. I’m concerned about the long end judicial merit protection and EEOC

cases that went on and on.

Ms. JAMES. I think we want to make sure that, being sensitive

to the mission of the Department and balancing that against the

42

opportunity to protect employees’ due processes, that they have

done a good job of maintaining both and in working with them. So

while people may not be entirely satisfied that we have these independent boards appointed by the Secretary, they are there. They

will be transparent. They will be available as a process for employees.

While there have been opportunities for many bites at the apple,

we have taken that and streamlined that so that it will no longer

be an issue. And this is a work in progress. There will be opportunities to tweak it even further.

Mr. MICA. Just a couple of quick questions. There are 180,000

employees plus or minus, and many are excluded TSA, military——

Ms. JAMES. About 70,000.

Mr. MICA. So 70,000 is what we end up with.

Admiral LOY. About 110,000 that will be impacted, sir.

Mr. MICA. OK, that’s my question. How many are impacted total?

Admiral LOY. I was trying to add that up last night. I think it’s

about 110,000.

Mr. MICA. Admiral Loy, did you say that when we consolidated

these positions, there was not one position eliminated out of the

80,000 or whatever we consolidated?

Admiral LOY. With our Customs officers, sir?

Mr. MICA. With any of them. Did we eliminate any position?

Admiral LOY. I don’t know that we have eliminated positions in

the course of this design work. I’m not sure I’m following your

question.

Mr. MICA. That was just a general question. In this whole consolidation, we considered the reform and homeland security and

there was testimony from that table before this committee that

there would be some consolidation, possibly. If you know of any, I’d

love that for the record.

Then just finally, the cost to implement. I saw $130 million. Is

that the cost to implement this new system one time, over a period

of time, or does that include operational, with a new HR system?

What are the estimates for implementation and then cost to run,

and can you compare that with any of the current HR systems we

have or we’re eliminating? Maybe you can’t answer here, but could

you supply and make that part of the record.

Admiral LOY. I’ll happily do that, sir. I can give you at least a

snapshot up front. There will be, without doubt, a significant up

front investment in order for us to do the training, mostly, appropriate to make sure our supervisors and managers are adequate to

the task of the performance appraisals that are the cornerstone of

doing what we need to do with pay and personnel decisions down

the road.

Mr. MICA. But the long term is?

Admiral LOY. Longer term, I will get that back to you, sir. I don’t

know the comparative piece between an HR system now and then.

In the 2005 budget, we have asked for about $100 million to get

on with this initial investment point. Then we’ve also asked for I

think $12.5 million for the pay pool for fiscal year 2005. Because

this will be a phased-in over time effort to reach those 110,000 at

the other end of several budget cycles.

Mr. MICA. Thank you, Madam Chairwoman.

43

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Mica. And just for clarification, before the gentlewoman from Tennessee who has been so

patient, you didn’t lose any jobs, but you didn’t increase the size

of the Federal Government and add jobs, did you?

Admiral LOY. No, ma’am.

Mrs. DAVIS OF VIRGINIA. Now I’d like to recognize the gentlewoman from Tennessee, Ms. Blackburn, and thank you for your patience.

Ms. BLACKBURN. Thank you, Madam Chairwoman, and thank

you to you all for taking the time to come. We are interested in this

and in the agency reorganization and homeland security and appreciate your mission and the mission that you all accept in securing

our country.

I want to followup, let’s go back and talk about this implementing the pay for performance. Because I appreciate the flexibility

that you all need and that you desire. I support that.

I do want to look at this implementation on the pay for performance. One thing I have not heard, and I did not find in your testimony is what your timeframe is for your implementation, when you

feel like you will move everybody into this new system.

And then also, one thing that I’ve not seen, and Admiral Loy, you

may have just started to touch on that, your financial systems, the

DHS financial systems, to track the pay for performance. Do you

have your, the architecture in place for that? Who is handling that,

and what kind of transition do you expect? If each of you would address that, that would be great.

Admiral LOY. Yes, ma’am. As far as initial implementation, our

goal is in 2005 to have covered all of the headquarters work force,

the one major directorate, if not two major directorates at headquarters to include the information awareness and infrastructure

protection directorate and the science and technology directorate.

We are choosing those so that we can sample across the board of

occupation categories so we can make sure we’re dealing with effectiveness at a variety of occupational categories.

Then we have chosen the Coast Guard civilian work force to be

the agency’s first effort out of the box, so to speak. That’s about

5,000 civilian work force elements in the Coast Guard. We’re trying

to make that a turn-on by fiscal year 2005. We have asked in the

President’s budget as it came forward for the resources to do that.

Then onward through 2006 and the Congress, of course, gave us

about 5 years, as I recall, in HSA, to get this accomplished over

time, we would press on then in 2006 and 2007 to complete that

reach to the 110,000 that Congressman Mica asked about, that

number.

Ms. BLACKBURN. Admiral Loy, may I interrupt you for just one

moment on that? If you would go back and speak within that, the

groups, the headquarters, the different groups you’re planning to

implement in 2005, how are you planning to stairstep these in?

Will this be a few each month? Is it going to be on a quarterly

basis? How are you going to work that?

Admiral LOY. We would like to think that we will design the system to the point that we can turn it on for that wedge of people

in the Department at the same time in fiscal year 2005 and then

44

press on, as I say, to 2006 for other elements of both the Department and the agencies within the Department.

The design work associated with the construction of that pay system in order to do that remains a work in progress, and we continue to work on that diligently and look forward to working with

the committee and anyone else that would be helpful for us in that

process. So as I sit here toady, it is not a finished product. It is

something that we are still in the design work to get right at the

other end of the day.

Ms. BLACKBURN. Estimated costs?

Admiral LOY. I’d have to get you that for the record, ma’am, in

terms of the design work necessary for that financial system to

support it. I don’t have that number off the top of my head.

Ms. BLACKBURN. I would appreciate having that. Ms. James,

anything to add?

Ms. JAMES. No, except that I was pleased that as the Department looked at their implementation that they recognized the importance of doing it over a staggered period of time and have a substantial investment that they have asked for in the budget to make

sure that the appropriate training and the information and education of the work force takes place. I think those are vital elements, and very often when transformation takes place in a department, the department either doesn’t take enough time or put

enough investment in dollars to make sure that it is a smooth transition. I think the Department has done both.

Admiral LOY. We’re trying to be very sensitive to what several

members of the committee have mentioned this morning, and that

is the potential for however our system comes out that it becomes

a model of sorts that potentially could go wider across Government.

We’re very sensitive to that. Director James and her staff have

held our feet to the fire, so to speak, on that, day after day after

day in the design process. It’s exactly the right thing to do.

We know to a limited degree what’s going on in DOD. We are

concentrating on this system to be best for DHS, but there clearly

are implications for across Government best practices over time

and we want to be very sensitive to that.

Ms. BLACKBURN. Thank you.

Mrs. DAVIS OF VIRGINIA. Thank you, Ms. Blackburn.

Director James, let me just throw this out. One of the things I’ve

heard is that the managers will be trained. And in speaking to a

group of about 50 managers yesterday, the one thing I heard the

most, in fact I think it was unanimous in the room, they would like

to have a standard for all managers, required training. I would just

suggest that OPM take a real strong look at that. That might help

across the board with some of these concerns.

Admiral LOY. Yes, ma’am, absolutely it will. We started last

week, I conducted with the Under Secretary for Management and

our Assistant Secretary for Human Capital in the Department, we

had a radio broadcast, TV broadcasted meeting, an electronic town

meeting with the senior leadership in the Department countrywide, giving them an opportunity to converse with us initially and

open the gates, if you will, to dialog with the work force and especially the senior leaders.

45

As we speak, we are in the middle of a 3-day session of gathered

senior executive service members from the Department out at

Westfields in Chantilly. I gave a keynote with them yesterday, they

spent virtually all day yesterday and today grappling through their

responsibilities in the HR system and giving us additional feedback.

They’re now at a point where it’s no longer a notion or somebody’s idea, it’s upon them and they understand their obligations

in the system. The Secretary spent several hours with them last

night personally to hear them out.

So then the show we take on the road, so to speak, with a kit

that will be consistent for every member of that leadership cadre

in the Department will hopefully provide that constancy and consistency across the Nation that you just spoke of.

Ms. JAMES. Madam Chairwoman, I heard you and we will take

on that responsibility. I think it’s important that as we educate

people about the new system and we bring them all on board and

we inform them, that it’s also important that we give them the

tools to train them. Some of this is very technical and it’s very complex. And as it filters down to those who actually have to implement it and operate it on a daily basis, they need very specific

training to make sure that this happens in a very smooth way. So

we will respond to that and take that on.

Mrs. DAVIS OF VIRGINIA. You may want to take it a step further

and train all managers throughout the whole Federal work force.

Admiral LOY. One other mention I would make, Madam Chairwoman, just as a point of reference, it’s enormously important that

we complete one of our performance appraisal cycles before we pretend we can use those information elements to make pay decisions.

So that cycle is enormously important for us to get right as well,

ma’am.

Mrs. DAVIS OF VIRGINIA. I’d just like to say that we will, I know

I’ve got some questions I would like to have submitted for the

record. If any other Members have additional questions of our witnesses today, they can certainly submit them for the record, then

we’d ask you to get that to us.

Ms. NORTON. Madam Chairwoman, can I ask for a clarification

of something?

Mrs. DAVIS OF VIRGINIA. Yes, ma’am.

Ms. NORTON. Because I asked Admiral Loy a question about the

agency having no discretion, even on its own, to bargain. And you

said that decision could be made at the Secretary’s level. So I went

and had them get me your explanation for these regulations. And

if, as I recall your answer, it was that the Secretary would hold the

discretion.

But don’t you think this language needs to be clarified? It said

the Department will not be required to bargain over the Department’s exercise of these rights over most of the other rights enumerated in chapter 71. That doesn’t leave the impression that——

Admiral LOY. There’s discretion involved.

Ms. NORTON. Right.

Admiral LOY. Let me take that one, Ms. Norton, back, and we’ll

look at that real carefully.

Ms. NORTON. I’d appreciate that. Thank you, Admiral Loy.

46

Mrs. DAVIS OF VIRGINIA. Again, I’d like to thank both of our witnesses for being here today and just reiterate that I’m a firm believer in collaboration, as I said to both of you before the hearing.

I hope that the effort that’s been put into this human resources

system pays off in the creation of personnel rules that not only help

the Department achieve its mission but are seen as credible by the

employees and the managers.

I want to thank both Secretary Ridge and Director James and

your respective staff for a very thoughtful proposal. And again, I’m

glad to hear that you are keeping everyone involved in this. And

now, if my distinguished co-chair has anything to say? If not, we

will dismiss the panel.

Senator VOINOVICH. Thank you for coming.

Mrs. DAVIS OF VIRGINIA. With that, again I thank you today, and

we’ll move on to panel two.

We’re very fortunate to have on our second panel today Mr.

David Walker, the Comptroller General of the United States from

the General Accounting Office. He has a lot of expertise in Federal

personnel reform, and we’re very glad to have him here with us

today.

Mr. Walker, it’s our pleasure to have you here today. And as is

our custom in this committee, we do swear in our witnesses. I understand only the first panel was sworn in. If you would please

raise your right hand, I’ll administer the oath.

[Witness sworn.]

Mrs. DAVIS OF VIRGINIA. Let the record reflect that the witness

has answered in the affirmative. You may be seated.

Mr. Walker, we want to again thank you and thank you for your

patience. I’m sorry we’ve kept you so long here. I’ll now recognize

you for 5 minutes for your opening statement.

STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL,

U.S. GENERAL ACCOUNTING OFFICE

Mr. WALKER. Thank you, Madam Chairwoman Davis, and also

Chairman Voinovich, other members of the subcommittees. Let me

first thank you for the opportunity to appear on this important

topic. Second, let me also commend you on your bipartisan and bicameral approach to addressing this important issue. And third, let

me thank you this morning for shepherding GAO’s bill to unanimous passage this morning. Let me also thank Senator Voinovich

for his efforts in the past. We might need you one more time, Senator, it might bounce back to the Senate now.

Mrs. DAVIS OF VIRGINIA. To correct the record, it hasn’t passed

yet. It’s up for a recorded vote this afternoon.

Mr. WALKER. OK, well, I’m confident with your leadership what

the outcome will be.

I have an extensive statement that hopefully can be included in

the record and I’ll just end up summarizing very quickly.

Mrs. DAVIS OF VIRGINIA. That will be fine.

Mr. WALKER. First, we’re dealing with proposed regulations, as

you know, that were just promulgated this past Friday. And so my

testimony and our statement for the record is based on our preliminary review of those proposed regulations. Second, clearly these

regulations have significant precedential implications that go far

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beyond the Department of Homeland Security. They could potentially serve as a framework for action outside the Department of

Homeland Security.

Third, the process that has been employed to date is one I think

the Department should be commended for. It has involved a number of parties, including management, organized labor and a variety of others, and process is very important when you’re dealing

with something as important as basic human capital policies.

In addition, we know that proposals are always going to be controversial, so it’s important that you have an appropriate process,

because you know that there will be some degree of controversy no

matter what proposals come out of that process, as is the case here.

In addition, I think it’s important to note that many of the

framework proposals in these proposed regulations are consistent

with best practices, some of which frankly were pioneered by the

GAO. So there are a lot of good things in here that I think the Department should be commended on. But again, they need to hear

public comment.

At the same time, there are at least four areas that I think are

deserving of additional attention. Not to say that others aren’t, but

there are four areas that, based on a preliminary review, really

jumped out at me. First, we know that the past process has been

a very inclusive one and a very open one. We don’t know what the

future processes will be. Because right now we have the framework, but there are a lot of details that have to be worked out, and

those details are very important. So it’s important to have a very

inclusive and a transparent process going forward.

Second, the performance management system safeguards, we believe, need to incorporate the best practices that are in the report

that I’m holding in my right hand, which is being released today.

These represent the best practices for performance management

systems, especially those systems that are intended to incorporate

more modern, effective and credible pay for performance approaches.

Third, we think it’s important to take a hard look at the appeal

standard, structure and scope. What’s the standard for appeals,

who would be on these appeal boards, what’s the basis for appointment, for removal, and also what would be the scope of their authorities.

And last but not least, obviously, there are likely to be some discussions and debates about the scope of bargaining, what issues

should be bargained or not. But bottom line, we believe that they

undertook a concerted, good faith effort involving an inclusive process to come up with a set of proposed regulations. They are now

out for notice and comment. Obviously they will help to inform

whatever the final regulations are. We think there are a lot of best

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practices that are incorporated in here, but there are areas that deserve additional review and consideration.

I’d be happy to answer any questions that any of you may have.

Thank you.

[The prepared statement of Mr. Walker follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Walker.

I just want to followup with the last comment that I made to the

witnesses talking about training for the managers. In my view, the

training that’s arising out of this changeover that we’re doing is

going to be just huge. I was wondering, based on your experience,

how much training on the new pay classification and performance

management system do you think would be needed. It seems almost overwhelming.

Mr. WALKER. We have had a broad banding system at GAO for

a number of years. We are ahead of the curve in implementing pay

for performance systems at GAO. We’ve modified ours recently,

within the last couple of years. Training is absolutely of critical importance. In fact, it is not a one time event. We, in going to a new

state-of-the-art competency based performance appraisal system

that has linked our strategic plan and linked our pay and promotion decisions, we had extensive training in year one. But quite

frankly, we’ve had additional training in year two and anticipate

additional training in year three.

I think it is critically important in order to maximize this chance

that you get it right, that it’s consistently applied within and between units and that it’s viewed as credible, equitable and non-discriminatory.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Walker. I’m going to

give time now to my colleagues to ask questions. I’m going to be

called for a vote here in one of my committees in probably 1

minute.

I’m going to yield to Ms. Holmes Norton for questions.

Ms. NORTON. Thank you very much, Madam Chairwoman. I

think you, Mr. Walker, pointed out the categories of concern that

any agency undergoing this kind of extraordinary change, someone

has, when you’re dealing with 170,000 employees, you somehow

mesh them all together for the first time, it’s a very delicate task.

Someone has compared it to repairing an airplane while it’s in the

air. I just want to make sure that some of the passengers don’t get

lost in the process.

The notion of performance based accountability is of course the

rationale for this change, and it’s why this change is occurring. I’m

very concerned about how you get accountability on the part of employees rather than wholesale problems between supervisors and

managers when the regulations do not require, as they do now,

that written performance, the elements of what is required, be

written down, so that standards will be known and standards set

out.

I want to know on three scores, I have problems with this on

three scores. One, how is the employee to know what’s expected of

the employee if it’s not written down somewhere? I thought that

was kind of the ABCs of accountability. Won’t that result in a he

said, she said, you should have known, I wasn’t sure problem? Why

in the world would anybody not want to write what you want people to do, especially when you have a whole bunch of employees?

That’s the first thing. How do you get accountability if nobody has

communicated what that is?

I’m particularly concerned, as a former chair of the EEOC, how

one will ever bring an EEO complaint. And one of the things that

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we’re, the entire Congressional Black Caucus, the entire Congressional Hispanic Caucus and many Members of this Congress are

going to be looking at is whether or not you are, they are, dismantling what it took our country 100 years to get, which is accountability for racial discrimination and gender discrimination. Well, I

don’t see how there can be any accountability or how you can even

bring a complaint to the EEOC when there’s no documentation as

to what was expected of you.

And finally, how in the world are you going to hold managers accountable? If a manager hasn’t had to write down what it is that

the managers expect of their employees, this is what I meant when

I asked the prior panel whether they had looked at best practices.

Their answers were entirely unsatisfactory. So yes, we have.

But I certainly can tell you this, I don’t think anybody in the private sector would say, at least in a big operation, that we’re not

going to write down, and don’t even ask us to write down, because

it’s an administrative burden. Don’t ask us to write down what is

expected of you. I don’t know what the view of that is, whether you

think it’s a best practice or whether you have any recommendations with respect to not writing down or having the discretion not

to write down what you expect from your employees.

Mr. WALKER. Ms. Holmes Norton, as you know, these are proposed regulations. My view would be that it is critically important

that performance standards be documented in order to have a clear

understanding between the individual and their superiors as to

what they are expected to do in order to make sure they are focusing their energy and efforts on those items and in order to be able

to assess their performance and in order for them to be able to hold

themselves accountable for their performance. I think it’s critically

important that it be documented.

Now how you go about doing that can vary. For example, at

GAO, we have adopted a modern, effective and credible competency

based performance appraisal system which was validated, the competencies were validated by our employees, not only to gain acceptance but also to minimize litigation risk, quite frankly. So I think

how you go about doing that can vary——

Ms. NORTON. How many employees did you have?

Mr. WALKER. We only have about 3,300. We have a number of

occupations——

Ms. NORTON. Well, let’s——

Mr. WALKER. It’s a difference.

Ms. NORTON. But it’s a terrible challenge. What we’ve done to

this agency is we’ve put all these folks together and we’ve given

this agency really a challenge that I don’t think any agency in the

world has had. This is a Constitutional system, this is State action.

The response on preponderance of the evidence bordered on the unconstitutional, when the answer was, well, we need to do this

and—but the Constitution requires due process of a Federal employer.

I don’t believe this can withstand Constitutional scrutiny. I don’t

think it can withstand Constitutional scrutiny to say that you can

fire somebody from his job without even telling him what his job

is. And you tell me, well, there are lots of ways to do it. I want

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to ask you, is there any other way to do it if you have 170,000 employees, other than writing it down?

Mr. WALKER. I think it needs to be documented. I think the

standards need to be documented. I also think that you need to

have an appropriate safeguard within the Department, outside of

the line, to review for consistency and non-discrimination. I think

that you need to have alternative dispute resolution procedures,

and you need to have qualified, independent appeal bodies available to employees in the event they believe that they somehow

have not been treated fairly. I think all those elements are critical

components.

Ms. NORTON. Would you agree, then, that they haven’t begun to

do any of the things you just named?

Mr. WALKER. I think they’ve started, but I think more work is

necessary. And in the four items that I mentioned, some of the

issues that you’ve talked about are some of the ones that I think

are deserving of additional attention and scrutiny. Hopefully we’ll

get it as a result of this comment period and oversight by the Congress.

Ms. NORTON. Thank you, Chairman Voinovich.

Senator VOINOVICH [assuming Chair]. Following up on Congresswoman Norton’s question, you’ve been involved in performance

evaluation now for some time. Do you believe that if you dot the

Is and cross the Ts and do the things that are necessary that performance evaluation can work in the Federal system?

Mr. WALKER. Oh, absolutely. I believe it’s critically important

that we move to more of a pay for performance system. And where

we’re paying for skills, knowledge and performance, rather than

the passage of time and the rate of inflation.

Senator VOINOVICH. I think this committee would be interested

in having you identify, benchmark examples of where pay for performance is working, not only at the General Accounting Office, but

other places, and what were the ingredients that were in place to

make that successful.

Mr. WALKER. A number of them are in the document that is

being released today and I would recommend it to you and the

other Members.

Senator VOINOVICH. Thank you. We’re in the position right now

of listening to comments about the proposed regulations. The fact

that we’re meeting here today and giving people an opportunity to

express themselves publicly is important.

Could you briefly, give us your thoughts on what are the strongest elements of the proposed regulations and then share with us

where you think there is some real work that needs to be done?

You’ve done that in your opening statement, but could you expand

on that?

Mr. WALKER. I think conceptually broad banding makes sense,

provided you do a good job of setting up those bands by major occupational categories, also to potentially consider what some have referred to as speed bumps, to make sure that you have a situation

to control, to make sure that people don’t automatically get to go

to the top of whatever the band is for compensation purposes irrespective of their performance.

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Second, I think the concept of moving more toward a pay system

that compensates people based upon skills, knowledge and performance, and also an alternative way of looking at locality based pay

has strong conceptual merit. I believe the areas that require further attention are the ones that I mentioned, and that is, what are

the future processes going to be.

I think it’s important that if they’re going to go for a pay for performance system they need to incorporate these safeguards and

best practices. I believe they need to look at the standard for appeal, the structure for appeals and the scope of those appeals, are

the primary issues. I’m sure that the next panel will talk about

whatever issues they have with regard to the proposed scope of

bargaining as well.

Senator VOINOVICH. You mentioned the issue of locality. I’m interested in a proposal to base annual pay raises on, among other

items, market related adjustments. The Federal Government has

had a difficult time comparing certain Federal occupations across

the Government’s 32 locality areas, because some of the occupations don’t exist in the private sector.

How do you think this will work for fields such as law enforcement, and do you think that market related adjustments will close

the pay gap for DHS law enforcement officers in high cost of living

cities?

Mr. WALKER. I would hope so. But the fact is, one of the things

we can take some comfort in is that there are benchmarks for law

enforcement all across the United States. Every State and locality

has law enforcement personnel. So that’s an area where I think we

should be able to get appropriate compensation information.

One of the things that was referred to earlier was that when

TSA was set up, because of the additional flexibilities that they attained, quite frankly, they ended up hiring a bunch of people from

GAO, the Capitol Police and many other departments and agencies,

because they had more pay flexibility than those other entities did.

So yes, I do believe it’s appropriate and possible to come up with

some competitive compensation studies that will do a much better

job of determining appropriate pay by locality than our current one

size fits all approach.

Senator VOINOVICH. Do you see any changes in the personnel

system that might require additional legislation?

Mr. WALKER. My understanding, Mr. Chairman, is that there are

certain restrictions in dealing with the Secret Service and the TSA,

and that they are not covered by all or part of these proposed regulations. So Congress would have to determine whether and to what

extent it would want to allow them to make changes dealing with

those two particular entities.

Second, I think if I recall correctly, Mr. Chairman, the safeguards that we came up with, the proposed statutory safeguards

that are included in the GAO bill, that we recommended be included in the DOD bill. I’m not sure that they’re in this bill.

So to the extent that you would want to think about doing that,

I don’t recall whether we were able to get them in or not, because

I think this bill passed well before we worked those out. So that’s

something you may want to think about. Because I think this is

precedential across the Government. And I think that while manVerDate 11-MAY-2000 12:19 Jan 05, 2005 Jkt 000000 PO 00000 Frm 00083 Fmt 6633 Sfmt 6633 D:\DOCS\95409.TXT HGOVREF1 PsN: HGOVREF1
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agement needs to have reasonable flexibility to design different systems, given their missions and work forces, there ought to be some

principles and safeguards that apply universally throughout the

Federal Government to protect employees and to assure a reasonable degree of consistency.

Senator VOINOVICH. I was very much involved in trying to negotiate some of those human resource provisions for the Department

of Defense. Did those safeguards get into that?

Mr. WALKER. Some of them did. But let me just say that the

DHS process is night and day different than the DOD process. I

think DOD could learn a lot from DHS, and hopefully they will.

Senator VOINOVICH. Some of those that are here today ought to

know that some of us feel that if we can work out a decent system

with DHS, perhaps we might suggest that some of the things we

incorporate in the DHS Personnel System could be followed over at

the Department of Defense. It’s going to be interesting to see as we

move down the road which is the more successful way of getting

the job done.

Mr. WALKER. Well, there’s a big difference in process already.

The other thing that really candidly troubled me recently is the announced intention of the Department of Defense to implement a

new system for 300,000 people by the end of this year. But I’m

going to speak with Under Secretary Chu and others within the

next week or so to hear more about that.

Senator VOINOVICH. I would have felt much better if Secretary

Chu and Secretary Rumsfeld had spent some time with the members of the Governmental Affairs Committee in the U.S. Senate,

talking to us and working on this issue before they went forward

with their program. But again, time will tell.

Regarding TSA, what would be wrong with giving TSA the authority to give their workers a right to collective bargaining?

Mr. WALKER. That’s obviously a decision for the Congress. I will

tell you from a personal standpoint, I believe in collective bargaining. There may be some limitations in appropriate circumstances

due to national security as to what issues ought to be bargained.

But from a conceptual standpoint, I think that’s something, I believe in it from a conceptual standpoint, subject to certain limitations. But that’s ultimately a decision for the Congress.

I think whether or not you have bargaining, it’s critically important that you have active and ongoing employee participation,

whether it be through their representatives, the bargaining units

and the leaders of the bargaining units, or whether, if they are not

a member of a union, appropriate representative employees. If you

take GAO, for example, we don’t have a union or unions, but we

actively partner with our employees through a democratically elected employee advisory council and treat them with the same status

as our top executives in defining and rolling out new proposals that

deal with all our employees.

Ms. NORTON. I have just one question. I wonder if I could get Mr.

Walker on record here. Senator Voinovich, this is a matter that’s

going to be coming to the Senate, as I understand, soon. It has to

do with the so-called 10 deadly sins. You may be aware of these

10 deadly sins. In any case, they were mandatory removal offenses

that the IRS could remove peremptorily.

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Now, it is interesting to note that H.R. 1528 has passed the

House that would remove that ability from the IRS. That’s just

what that experience has shown us. Nevertheless, mandatory removal offenses have now popped up in the DHS regulations. At

least at the IRS there was an independent, there was instant removal but there was independent review, whereas any review here

would be internal and nobody even pretends that’s the same kind

of review as is normally thought to be independent.

And the IRS offenses that you could be removed for were written

in statute. So again, we weren’t, collecting money is very important, just as our security is very important, but somehow, some

balance had been found. And yet the experience had been so faulty

that a bipartisan bill repealed this section of IRS, this IRS provision. Do you believe that mandatory removal is something that

should be written into these regulations, given the experience we

have already had, which has caused something that seldom happens in this House, which is the repeal of something that we put

into law?

Mr. WALKER. First, I believe in my full statement I have some

reference to the fact that I think it’s important that lessons learned

from the IRS experience be considered in determining what should

be done with the Department of Homeland Security. Second, I do

think there are certain circumstances where certain actions should

result in removal. At the same point in time, I think it’s important

that there be an appropriate due process, involving qualified and

independent players as a check and balance when you are talking

about somebody losing their job.

So I would be happy to provide additional information for the

record if you would like on that.

Ms. NORTON. You think they should be put in law, at least, or

regulations, as the IRS was? We put them in statute. They’re not

even in regulations here in DHS. It’s at the discretion. This is the

first time I think even anybody thought about this. At the discretion of the Secretary, without anything written down, you can be

instantly removed.

Mr. WALKER. My personal opinion is it should be in either law

or regulation, because both of those will result in some type of due

process consideration of what they are. Then second, after that

ends up happening, then you have to determine what type of appeal process there might be, if there is a perceived inequity in the

application of whatever the law or the regulations lay out.

Ms. NORTON. Thank you very much, Mr. Walker.

Mr. WALKER. Thank you.

Mrs. DAVIS OF VIRGINIA [resuming Chair]. Mr. Walker, as always, it’s been a pleasure having you here. Thank you for coming

to testify. I’m sure some of our members may have additional questions they want to submit for the record.

Mr. WALKER. Thank you, and good luck this afternoon for both

of our sakes.

Mrs. DAVIS OF VIRGINIA. Thank you very much, and thanks for

your patience.

We will now move on to panel three, and I’m sorry to keep you

all waiting. I have some other not so great news for you. I’ve just

been told we have to be out of the room at 1:15 because the room

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has been booked for another hearing. So we need to move on to

panel three, and we’re very fortunate to have on our third panel

representatives from the three largest unions at DHS.

First of all, we’ll hear from Mr. John Gage, National President

of the American Federation of Government Employees. Then as always, we’re pleased to have back Ms. Colleen Kelley, national

president of the National Treasury Employees Union. And last but

not least, we’ll hear from Mike Randall, president of the National

Association of Agriculture Employees.

Again, thank you all very much for being here today and thank

you for your patience. As always, it is the policy of this committee

to swear in our witnesses. So if you would all please stand and

raise your right hands.

[Witnesses sworn.]

Mrs. DAVIS OF VIRGINIA. Let the record reflect that the witnesses

answered in the affirmative.

You may be seated.

Mr. Gage, again, thank you for being here today. You are now

recognized for 5 minutes.

STATEMENTS OF JOHN GAGE, NATIONAL PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; COLLEEN

M. KELLEY, NATIONAL PRESIDENT, NATIONAL TREASURY

EMPLOYEES UNION; AND MIKE RANDALL, PRESIDENT, NATIONAL ASSOCIATION OF AGRICULTURAL EMPLOYEES

Mr. GAGE. Thank you, Madam Chairwoman.

We have a detailed statement that we submitted with some of

our concerns and recommendations to the overall plan. I wanted to

talk, and of course we met with Secretary Ridge, had a good discussion with him. I really hope that further discussion with Secretary

Ridge is going to enable us to correct some pretty glaring problems

with the DHS personnel system.

It’s just a couple of observations. I mean, getting the details right

on this new personnel system is going to be very, very difficult.

When we see the Department coming out of the box, intentionally

excluding from the system fair checks and balances to correct mistakes and to safeguard against abuses, I am pretty shocked about

that. And I know your questions about training, and I think training is going to be a huge issue.

But now that we have all these trained and various degrees of

trained supervisors to start the system off with taking employees’

rights away, where they can contest problems or abuses or mistakes that these supervisors make is just not the way it should be.

If this system is so good, and when you hear the personnelists talk

about it, well, if it’s so good, it should welcome scrutiny. Slanting

the standards of evidence, minimizing collective bargaining, setting

up management as the sole judge and jury on discipline and pay,

employees’ sense of fairness and credibility that they should have

in this system, it’s just not going to happen.

When they talk about all the inclusiveness that the DHS system

process went through, it did. It talked with 2,000 employees. Just

about all those 2,000 employees said, don’t take our rights away,

there’s no reason for that, it’s not mission oriented. Almost all of

those 2,000 employees said, my supervisor is going to rate me and

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determine my base pay and that concept is very foreign to what we

currently have in the supervisor/employee relationship. And the

ability to put up an appraisal system for 175,000 employees that

is going to be done fairly hasn’t been done yet.

Now, to put the extra added attraction that these supervisors can

also determine employees’ pay, when in the past whether they

could rate a person fairly at all was in question, and to take away

the employee’s right to any appeal or to any scrutiny, employees

are very distraught about this. They are very concerned about it.

Senator Voinovich asked Admiral Loy, and I’ve asked him the

same question, give me an example where collective bargaining

stops this agency from doing anything. There are no examples.

When we talk about deployment, that it’s a mission issue of deployment, yes, it very well could be. But it also could be a supervisor

in San Diego re-deploying a border patrol agent or officer to Texas.

Now, shouldn’t there be at least a post-bargaining discussion, a

post-implementation discussion of those types of arbitrary moves?

This isn’t Secretary Ridge making these moves. These are very low

level supervisors who can have all kinds of different agendas going

on. And to take employees’ rights away or the union’s rights away

to at least scrutinize some of these decisions is really overkill.

I want to make just one other observation. The fact that TSA employees, these baggage screeners, cannot have any appeal rights,

any collective bargaining rights, is shameful. These employees are

calling us daily with things that are going on in work sites in airports across the country. You can see the turnover rates of these

folks. We could do a lot, I think, in stabilizing that work force. I

think they’re doing a fine job. I think they’re doing a better job

than has ever been done at our airports.

But to say that they have no rights whatsoever and no collective

bargaining rights, and that’s some type of a mission, that nexus

hasn’t been established. And I think in this country, when you say

that someone has to lose a right, you’d better well express very

clearly how that mission abrogates those rights. That test hasn’t

been made for TSA employees, and we’re going to continue fighting

to get them the rights that they deserve.

Thank you, Madam Chairwoman.

[The prepared statement of Mr. Gage follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Gage, as always.

Ms. Kelley, you’re now recognized for 5 minutes.

Ms. KELLEY. Thank you very much, Chairwoman Davis, Chairman Voinovich.

I appreciate your having this hearing today for the subcommittees and having the opportunity to testify on behalf of the 13,000

employees in the Department of Homeland Security that NTEU

represents.

To assist in the creation of a new HR system, the Secretary and

the new OPM Director assembled a design team that did include

NTEU representatives. While I believe that the collaborative process worked well in allowing NTEU to offer our options, to address

personnel issues that the Department identified, I am extremely

disappointed with the lack of inclusion of our or other employee

representatives options in the proposed personnel regulations.

To be successful from NTEU’s perspective, any new HR system

must be seen as fair, transparent and credible to employees, or it

will fail. By these standards, the proposed regulations as written

fail in many areas. I will focus my comments today on three areas,

pay, labor relations and due process rights.

NTEU believes that any changes to the pay, performance and

classification systems must be justified by mission needs and designed to minimize administrative burdens on managers, supervisors and employees. NTEU does not believe that the pay system

in the proposed regulations meets these tests. During the research

and design process, most employees reported that they were generally satisfied with the current GS system and that problems were

cited related to the application and administration of the system by

managers, rather than to the design of the system itself.

Unfortunately, the proposed DHS regs abandon the GS basic rate

system and will provide employees with a radically different and

unproven pay banding system based almost entirely on management discretion. The plan appears to eliminate even across the

board annual raises, allowing employees in some locations and occupations to be paid significantly less than others. The pay band

ranges will be set by an extremely complicated formula based on

mission requirements, local labor market conditions, availability of

funds and pay adjustments received by other Federal employees.

In addition, the President’s budget for 2005 request $100 million

to design this new system. This money could be put to much better

use by hiring more front line personnel.

On labor relations, 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 proposed regulations do not meet that statutory requirement. Collective bargaining disputes will not be subject to independent third party resolution, but will be resolved by

an internal DHS board. This internal DHS board will replace the

independent FLRA in determining what constitutes an appropriate

bargaining unit for the purposes of union elections. And the scope

of collective bargaining is so dramatically limited that the requirement that employees be allowed to ‘‘participate through labor organizations’’ is not met.

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Under current law, the subjects of collective bargaining for the

most part fall into three categories: management rights, permissive

subjects of bargaining and mandatory subjects of bargaining. Management rights are now non-negotiable on the substance, but subject to impact and implementation bargaining. Permissive subjects

bargaining would be redefined under the proposed regs as management rights, and again, not subject to bargaining even on impact

and implementation, and as we read the regs, even at the agency’s

discretion.

So I’m glad to hear that will be looked at by the Department,

based on Admiral Loy’s comments. But even post-implementation

bargaining will not be required on any of these issues.

Finally, any bargaining left will likely be dramatically curtailed

by a new standard that states, ‘‘proposals that do not significantly

impact a substantial portion of the bargaining unit are outside the

duty to bargain.’’ There is no definition of these terms provided and

should there be a dispute as to whether this standard is met, it will

not be resolved by an independent third party, but by the DHS internal labor relations board.

On due process, the proposed DHS regs would allow the Secretary, as we’ve heard, to define an unlimited number of offenses

requiring mandatory termination without any independent review

of the charges. Now, these DHS mandatory removal offenses are

even more draconian actually than the IRS deadly sins which have

been discussed. At least the IRS deadly sins are subject to independent review and are set by statute, not subject to the whim of

a current or future Secretary.

It is important to note that President Bush supports repealing

this mandatory termination provision that is in effect at the IRS.

And as Ms. Norton mentioned, this has currently already passed

the House. Now, under the proposed regs, we’ve heard that the

MSPB appeals process has changed. I would offer that it has been

gutted. The fairness of the MSPB appeals process is undercut as

proposed, with the MSPB not having the authority to modify agency-imposed penalties and also changing the burden of proof standard.

In conclusion, NTEU supports the mission and the personnel of

the Department of Homeland Security. NTEU wants the same

thing that I believe everyone who has been involved with the creation of the Department wants. We want a work place where employees can be successful and do quality work in an environment

where they will be treated with dignity and respect, and of course,

where the Department can act swiftly and decisively to protect our

country.

Changes in these proposed regulations are needed if the agency’s

goal to build a DHS work force capable of accomplishing its critically important missions is to be successful. As drafted, these regulations do not provide for a fair, transparent and credible HR system. And it will fail if implemented as written.

As I have heard many high ranking DHS officials say on many

occasions, failure is not an option for the Department of Homeland

Security. NTEU looks forward to continuing to work with Congress,

with the administration and the Department to change these proVerDate 11-MAY-2000 12:19 Jan 05, 2005 Jkt 000000 PO 00000 Frm 00122 Fmt 6633 Sfmt 6633 D:\DOCS\95409.TXT HGOVREF1 PsN: HGOVREF1
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posed regs and to help the Department design and implement an

HR system that can be successful for the Department, for the country and for the employees.

Thank you.

[The prepared statement of Ms. Kelley follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Ms. Kelley.

And all the way from Honolulu, we have Mr. Randall. Mr. Randall, you’re recognized for 5 minutes.

Mr. RANDALL. Thank you, Chairwoman Davis, Chairman

Voinovich. I’d like to thank you for the opportunity to come out and

testify out here, even if it’s such a long way. I thank the subcommittee.

I’m Mike Randall, president of the National Association of Agriculture Employees. Besides being the president of the National Association of Agriculture Employees, I work for USDA Plant Protection and Quarantine in Honolulu as a plant protection and quarantine officer.

We represent the Legacy-Agriculture bargaining unit split between DHS and USDA in March 2003. We continue to represent

employees in both. We can make comparisons of the two communications systems and management styles between APHIS-PPQ

and CBP. We can see the before and the after.

Agriculture inspectors perform regulatory compliance work. They

need to make on the spot decisions. They have to take educated,

supportable risks without consulting their supervisors. They need

to have enough authority and not be in fear of losing their jobs.

Who would think of regulating a walking stick unless it had insect exit holes, was made of citrus wood or had mud on the tip?

These are all reasons to regulate a walking stick. The customer is

not going to be happy about having his walking stick regulated. We

can try to explain our actions.

Our union collaborated with DHS and the other labor organizations in the development of the personnel system prior to the agency making its decision upon the regulation proposals. We were obviously not in at the decision phase. DHS and OPM need to materially modify the proposal if they intend to provide a humane system

and an environment that will address the needs of our specialty in

the Department’s mission and be fair to our bargaining unit employees.

The proposed DHS personnel system proposals are designed for

a police or military organization, not at all appropriate for the civilian labor force. They are not designed to advance unique missions

and goals of protecting American agriculture. They discourage necessary communication and feedback essential in the scientific program and instead encourage silence and a management retaliation.

They will not attract and maintain a highly skilled and motivated

work force for performing homeland security functions and agriculture quarantine inspection functions. That presages disaster for

DHS’s mission to the extent it encompasses protecting American

agriculture and food supply.

In order to make sweeping changes in the personnel system and

be successful in accomplishing DHS’s missions, the Department

will need buy-in from the employees. Unfortunately, given Customs’ and Border Protection’s refusal to adhere to the personnel

system by which it has been obligated to abide by March 2003, and

its evident lack of desire to improve the lot of our agriculture bargaining unit employees through purely administrative actions it

could have taken, we do not, and we cannot trust CBP or DHS in

their roll-out of the new personnel system.

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On pay, it’s hard to have trust. The changes in pay require trust.

Countless management actions or inactions during the past year

have caused distrust. There have been continuing pay fiascos

where employees have gone up to a month with no pay or the

wrong pay. CBP has imposed shift changes and canceled overtime,

leaving agriculture quarantine work undone. This has resulted in

decrease in pay for most agriculture inspectors.

DHS’s pay banding proposal has a component based upon performance evaluation. Legacy-Agriculture employees are fearful of

this performance component. CBP has inserted other Legacy agency managers from INS and customers into the front line agriculture

reporting chain. Many Legacy agency managers from other agencies have demonstrated and continued to show disdain and disregard for the agriculture protection mission. These managers are

now in our performance evaluation food chain. As agriculture inspectors know, a bit of bad food in the food chain can cause Mad

Cow.

Labor management relations, no communication is the apparent

goal of DHS. This starts with prohibitions on union presence at formal meetings and negotiations. Prohibitions extend to the employee deployment and new technology. These prohibitions in bargaining are so expansive in scope they effectively preclude any

meaningful negotiations including anything classified as work or

any item that an employee touches. Bars on negotiations over deployment exclude most actions employers could perform involving

a verb, any verb. What is not classifiable as a deployment? Not

much, if anything.

The new technology prohibition could preclude negotiations about

safety issues arising from an introduction of a new technology.

Shame. During our first year with CBP, CBP management showed

little to no interest in complying with existing law and regulations

regarding labor relations. CBP continually violated an FLRA mediated settlement agreement we reached previously with USDA, an

agreement that required negotiations. They violated a memo issued

by Under Secretary Janet Hill that clearly states that this and

other pre-DHS agreements were binding upon DHS management.

Nevertheless, CBP insisted upon implementing without negotiation and offered only post-implementation bargaining. Negotiations

have yet to occur, despite numerous requests.

Often, CBP wrongfully claims national security. An example is a

refusal to provide the union a list of the employees we represent

in their work locations, a contract requirement ignored. I guess

they just don’t want us to know who we represent and where

they’re at.

Even when CBP does not assert national security, it implements

countless changes without negotiating, occasionally offering postimplementation bargaining. This is another way to say, we really

don’t want to negotiate with labor and the employees it represents.

We spit on your contracts and agreements. It does not please the

king.

CBP, a law enforcement agency, should observe the law, not

flaunt it. Now, DHS would change the rules to legalize all CBP’s

transgressions. Where are we going with this personnel system?

Many of these proposed personnel system changes will cement the

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foundation of an authoritarian law enforcement work place. Agriculture work is regulatory enforcement compliance from the public

as sought, not extracted. Agriculture work requires that input be

taken from the field.

Changes in a scientifically sound program must be suggested, observed and tested from the field from the front line. These things

cannot be dictated from central control, top down management,

particularly from CBP management, dominated by former Customs

managers, who have zero training, experience or understanding of

the agriculture mission and no desire to learn.

Mrs. DAVIS OF VIRGINIA. Mr. Randall, I don’t mean to be rude

and interrupt you here, but we have your full statement in the

record. Could you summarize it? I know that Senator Voinovich has

to leave, and we have to be out of the room. We’d like to have time

for questions.

Mr. RANDALL. DHS needs professional, experienced, scientifically

schooled agriculture inspectors to continue the agriculture mission.

It will not succeed should DHS-CBP decide to replace these inspectors with generic law enforcement types. Many agriculture inspectors have been offended by the CBP management style, they are

being chased away from the agency. Career change is at the center

of discussion with many long term employees not yet at the retirement threshold.

With communication, trust can be built. Without communication,

there is no trust and the system fails. There are a number of good

ideas in the proposal; however, there is too much in the proposal

that thwarts communication and kills mutual respect and trust.

These proposals do not meet the standards and values the collaborative groups set. Diversity is another one of these values.

Thank you, Chairwoman Davis and Chairman Voinovich. Thank

you for the opportunity to fly all the way out here from Honolulu

and I hope everybody has a good lunch.

[The prepared statement of Mr. Randall follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Randall, and I appreciate your flying all the way out here from Honolulu, and sorry you

had to come from warm weather to cold weather. And I hope I get

lunch today. I’m not sure I’m going to. And I doubt Senator

Voinovich is, either.

Senator Voinovich, I’m going to go to you first, because I know

you have to leave.

Senator VOINOVICH. First of all, I want to thank you for being

here. I also want to thank you for the input that you’ve had in this,

I think it was 10 months of dialog between the unions and the people in the Department. I’m a little disappointed, Mr. Gage, that you

feel that some of the observations that your folks had were ignored

in terms of some of the final regulations.

One of the reasons why we’re having this hearing is to give you

a chance, as I mentioned earlier, to air your concerns publicly

about this in hopes that we can see some changes made during this

period. And I welcome, and I know you’ve got them it in your statement, your thoughts as to what are the key issues that you really

think need to be addressed for this to be a successful operation.

Second, Mr. Randall, it appears from what I can glean from your

testimony that part of your concern about these new regs is the

very bad experience that your people have had who have been

transferred over to this new department, is that correct?

Mr. RANDALL. Absolutely. Our structure, anybody above GS–13

has been removed from our working environment in agriculture,

shipped off to admin, to enforcement, to intelligence. Very few

times has anybody from Agriculture been selected to command an

overall operation in a port situation. Those people are gone, our organization has just been slipped into the Customs organization

that is insensitive to the agriculture mission.

We have important homeland work to do, we’re willing to do it,

we have to continue doing the agriculture work 24 hours a day. It

cannot stop being done for a moment, because the chances of letting in something agricultural, you can weigh that against the terrorism risk. It’s ever-present. It’s just as bad.

Senator VOINOVICH. That’s something that I’m going to look into.

One of the concerns that I think all of us had was that if you integrated various agencies into this new department, what kind of an

experience would it be for them. Obviously yours hasn’t been very

good, and I think you’ve raised some legitimate concerns here.

One of the things that I was worried about in the beginning was

the collaborative process. Many of you may know I would have

liked to have seen mandatory arbitration, because I felt that arbitration might lead to more openness and responsiveness. Could you

share with me your observations about the process and what was

good about it? What part of it most bothered you?

Ms. KELLEY. Well, I would say, Senator, that the process was

good, as far as it went. It just did not go far enough. Our involvement was around data collection, information gathering and information sharing, all of which was wide open and shared with all the

members of the design team.

But the inclusion and collaboration stopped there. There was no

collaboration on prioritizing the options presented to solve the

problems, talking about which pieces could be used from different

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options to come up with a solution. And in most areas where there

were a range of options identified to solve a problem the Department identified that was a valid issue, they seemed to have always

chosen the extreme solution, rather than one that would solve the

problem they identified.

So we were not involved at all in decisionmaking leading up to

these proposed regs. I mean, it stopped with information sharing.

And then of course, we did have the SRC meeting, the open hearing. But it was, the things that are in these regulations were a surprise. They do not reflect NTEU’s work as a part of this design

team. And no explanation——

Senator VOINOVICH. The point is that you were on the design

team, but that design team dealt with the issues you just mentioned?

Ms. KELLEY. It was fact gathering, data collection, information

sharing.

Senator VOINOVICH. Information sharing. But then who made the

recommendations for the regulations?

Ms. KELLEY. We had no role in that. DHS and OPM did that.

Senator VOINOVICH. What was the steering committee?

Ms. KELLEY. The senior review committee, we had a 3-day hearing where we talked about issues as a result of presentations of the

design team, and from there, the Department and OPM went off

to write the regulations.

Senator VOINOVICH. I think Director James and Admiral Loy

mentioned the ‘‘senior design team.’’

Ms. KELLEY. The senior review committee.

Senator VOINOVICH. Were you on the senior review committee?

Ms. KELLEY. I was. We all were. That was the 3-day meeting.

Senator VOINOVICH. So that was the senior review committee.

Ms. KELLEY. Yes.

Senator VOINOVICH. They heard from you during that 3 day period. And then after that was over, you’re not sure who got in the

room and decided on——

Ms. KELLEY. I know it wasn’t us. Now, there has been ongoing

access and communication. I mean, if we need to talk to the Secretary or OPM, we have those opportunities to ask questions and

they’re clarifying questions. But I have never received an explanation as to why the most extreme solutions to the issues were put

in these proposed regs versus other options that had been put forth

that would have addressed the Department’s issues.

Senator VOINOVICH. All right. Was it more open than you expected it would be? I know we talked before about what was going

to happen. I was concerned that they would go off and quickly

make decisions, and Director James indicated to me that she

wasn’t going to do that, they were going to try to get as much input

as possible.

Ms. KELLEY. I think the information sharing and data collection

was wide open and it was transparent and it was all inclusive.

That part of it was. But at one point, we had asked that the 52

options that were being presented to the senior design committee,

that the design team would do more to prioritize them, to perhaps

pare them down and present the top 8 or 10 to the senior review

committee. And those recommendations were declined.

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Senator VOINOVICH. So what happened was that they developed

the recommendations, you got the information and then they met

with you in that 3 day period and talked about the 52 options?

Ms. KELLEY. Yes.

Senator VOINOVICH. And the 52 options were related to the 6

areas that they were looking at?

Ms. KELLEY. Yes.

Senator VOINOVICH. OK. What you’re saying is that those were

discussed during the 3-days, and that you feel some of the options

that were more palatable to your way of thinking were ignored and

that the ones that you considered more extreme were the ones that

got preference, is that right?

Ms. KELLEY. Yes. And I would add, not only that were more palatable to NTEU, but that solved the problem the Department identified. For example, the speed with which appeals are heard and

resolved, the speed with which bargaining is conducted. We proposed and were willing to come up with solutions that would have

addressed those issues as defined.

So I wouldn’t even say it was just about palatable. We provided

options and supported options that solved the problem they identified.

Senator VOINOVICH. In your opinion, they did what fulfilled the

mission they were trying to accomplish?

Ms. KELLEY. Yes.

Senator VOINOVICH. Have you compared the proposed regulations

side by side with your preferences?

Ms. KELLEY. We are in that process now, of course, with the 167

pages. We are doing exactly that, and we will be responding to all

of them, even much more than what you heard from us today. Because there are single words in those 167 pages that make a big

difference that we didn’t even have the opportunity to talk about

today.

But yes, we will be aligning those and show what solutions could

be implemented that solve the Department’s problems and are appropriate solutions that are not extreme. We will be doing that.

Senator VOINOVICH. I think that the members of our committee

would be interested in your views on those options. That would be

very helpful to us, and perhaps we can also weigh in and share

those with the Director and Mr. Loy and Secretary Ridge.

Ms. KELLEY. That would be great, thank you.

Senator VOINOVICH. Mr. Gage.

Mr. GAGE. The concern I have on the design team, and especially

the 3-day meeting is that there was a disconnect between HR types

and operational managers. And I think in our debate, and when we

were talking about these things, I thought there was somewhat of

a movement among the operational managers that when you discussed these things from a practitioner’s point of view on behalf of

employees that they really didn’t understand what a lot of these

things would do, and the time and money and what a huge change

it was going to entail on the work site, in the middle of this critical

mission.

That’s the thing I’m still concerned about with Homeland Security. Going into some really radical moves here at a time when the

agency is new and when there’s strain on the management anyway.

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I’m really hoping that Secretary Ridge will look at this from not

the theoretical abstract HR point of view, but from a real operational one, and see that some of the things we’re saying really

make sense from an operational point of view.

Senator VOINOVICH. So your observation is that the human resources people prevailed over the operational people?

Mr. GAGE. Yes, at this point. Hopefully it’s not over yet.

Senator VOINOVICH. Well, one of the things we’ve been trying to

do is to bring HR people up and give them more input into the

process. But what you’re saying is, they’ve come up with a lot of

ideas, but from a practical point of view, you don’t think some of

them make sense.

Mr. GAGE. I would hope their input period is over. [Laughter.]

Senator VOINOVICH. I would like, if you feel comfortable, for you

to share with me some of the complaints that you have received

from TSA employees. I must tell you that since I’ve had my pacemaker installed, I’ve really gotten to know some of the people in

TSA quite well. [Laughter.]

I’ve been all over the country, and I really go out of the way to

stop and talk to TSA employees and you’re right, there’s a lot of

unhappiness. But I’d say it’s 50–50. Some say things are fine, others say we’ve got problems. One thing that I have observed,

though, is that the managers really have not had the training that

they need to do the job that they’re supposed to do.

And the difference from one place to another is absolutely astounding. It is my understanding that TSA may eventually be

merged into the new personnel system. It seems to me that if

they’re going to do that, then it might make sense to give the opportunity to TSA employees to bargain collectively.

Mr. GAGE. It’s so incredible that they know that there’s all these

problems, but the No. 1 thing is, you can’t give an employee the

right to contest anything. And that just doesn’t add up to me.

When you know there’s things going wrong, and employees really

have nowhere to turn, that’s the thing that breaks your heart

about this and I think really causes a great sense of frustration in

our work force there.

Senator VOINOVICH. Well, again, I’m interested in getting your

best information on the options and what you think the alternatives could be.

Mr. GAGE. Thank you, Senator.

Senator VOINOVICH. I’m going to excuse myself. I apologize for

running out. But again, thank you for all of the work that you have

done, and I hope to continue to work with you in the future.

There’s a whole lot more on the table. One of these days I’d like

to have a hearing on the Defense Department.

Mrs. DAVIS OF VIRGINIA. When you do, I think I might like to

join you.

Thank you, Senator.

Senator VOINOVICH. Madam Chairwoman, thank you very much.

I’ve enjoyed working with you, and I look forward to working with

you in the future. Hopefully this afternoon we’ll get GAO.

Mrs. DAVIS OF VIRGINIA. I hope so. Thank you, sir.

And again, I apologize to our panel. They have scheduled this

room for another hearing, so we’re being pushed out. But I do want

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to, Mr. Gage and Ms. Kelley, ask you this. I was real pleased to

hear Director James and Admiral Loy talk about the collaboration

and the openness and thought that you all were going to be happy

about that.

But I’m really disappointed to hear that the openness was basically just for fact finding information. And in that regard, I assume

you had the ability to give some recommendations. And if so, were

any of your recommendations, Mr. Gage or Ms. Kelley, were any

of your recommendations, even 1 minute one, were any of them

used?

Mr. GAGE. Well, in the key area of employee appeals, collective

bargaining, no.

Ms. KELLEY. And in pay, I would also add no. What I would say

about the openness of the process on the information gathering is

that was a very positive experience for me and for NTEU. Because

very often in dealing with agencies, even in a bargaining environment, we are constantly chasing information and trying to get the

facts upon which they are relying. In this case, I do feel that we

have all the information that they are looking at. But we were excluded from any impact on the decisionmaking process.

We did put forth options that, as I said, as we put them up in

the design process, I will put them up tomorrow, send them to you

and to Senator Voinovich as he requested, to show that the options

we put forth solved the problems that the Department identified.

And yet they were not adopted.

Mrs. DAVIS OF VIRGINIA. Did the Department give you any reason why they did not use your options, the ones you preferred?

Ms. KELLEY. No. In fact, probably the one thing I haven’t said

about the process that needs to be said is, what was missing from

what I describe as a true collaboration is, at the point of where

data collection was over, there was no give or take. There has been

no response, at least to me, and I don’t know about John or Mike.

But I have had no response as to why our options were not

adopted. We have just seen what it is they proposed and without

exception, I would define it as, they chose the extreme solution to

the problem rather than other viable solutions that met their needs

and were better decisions for the Department and for employees.

Mrs. DAVIS OF VIRGINIA. But now they have to go back, you go

back and you write down what you don’t like. Do they then not

have to come back to us and tell us why? Is that not correct? They

have to come back to us and explain why they did what they did?

Ms. KELLEY. Yes.

Mr. GAGE. What we don’t agree to. But the thing that is in these

things, I mean, OK, they set up a board and they say, we’re going

to have collective bargaining. But then they get cute and we talked

about gamesmanship, I heard Congressman Mica talking about it.

All right, let’s not have gamesmanship on either side, and you don’t

define collective bargaining in a way that really neutralizes it, or

you don’t tell the MSPB that they can’t mitigate an action. That’s

ridiculous when it comes to due process.

And I think if we get some of those things out, well, I just hope

Secretary Ridge, when we can sit down and explain exactly what

these things mean, and how they will hurt the employees, and they

really don’t put any type of fairness into the system, that he’s going

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to be, we’re going to be able to, a little more than tinkering, but

just putting fair definitions to some of these due press issues would

help me along in this process a whole bunch.

Mrs. DAVIS OF VIRGINIA. Well, I certainly understand why DHS

and DOD have to have a streamlined process, especially with some

of the cases, with the collective bargaining. And you both know I

don’t have a problem with that.

Mr. GAGE. Neither do we.

Ms. KELLEY. We offered streamlined processes. Very, very

streamlined processes in our options. And you did not see them in

these proposed regulations.

Mrs. DAVIS OF VIRGINIA. I’m not asking some of the questions

that I need to have on record, but let me go to that again. How

quickly would your streamlined process work?

Ms. KELLEY. I believe there were two different options. One offered 15 days, one offered 7. And neither of those are included, and

in fact, post-implementation bargaining is not included in these

proposed regulations, not even after the fact.

Mrs. DAVIS OF VIRGINIA. I think that goes to one of my questions

I had for you, Ms. Kelley. Can you elaborate on that post-implementation bargaining, how would it work and was it a proposal

that you put forward during the consultations and rejected?

Ms. KELLEY. Yes. It definitely was a proposal.

Mrs. DAVIS OF VIRGINIA. Can you elaborate on it, so I’ll understand it?

Ms. KELLEY. This will be one of the best examples. At ports

across the country, new shifts are created every day, because of

whatever information or intelligence are received. And we accept

the Department’s need at times to put the shift in place today, to

staff it with eight people, eight employees who meet certain qualifications.

In the cases where they would do that for emergency reasons

without even a streamlined bargaining process, once they establish

it and everything has been taken care of and we’re safe, then a

post-implementation process would allow us to bargain over the

procedures used to staff these shifts in the future, so that if employees have child care issues, elder care, working spouses where

they prefer a night shift versus a day shift, they would have an opportunity through the processes we would negotiate to express

their preferences, perhaps received those assignments, we would

suggest probably by seniority.

But the Department gets to describe and define the qualifications

of the employees who can even bid on those shifts. So all of their

controls from a business perspective is there. They define the shift

they need covered, the number of employees, the qualifications of

the employees. And what we would have the opportunity to bargain

after the fact and for in the future, for the long run is how that

shift is staffed, so employees can express a preference and have

some say as they do today, and as they have done for years.

Mrs. DAVIS OF VIRGINIA. But it doesn’t stop the Department from

accomplishing the mission that they had at that particular moment.

Ms. KELLEY. No, it does not. They act, they do what they need

to do, and they assign the eight people. And then after the fact, on

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the assumption, our assumption is this will continue whether it’s

for 30, 60, 90 days or a year, so let’s talk about the assignment,

how that happens in the future with employee involvement. That’s

what post-implementation bargaining would be. And that scenario

plays out day after day in port after port across this country,

throughout CBP.

Mrs. DAVIS OF VIRGINIA. I’m going to be interested in hearing

from DHS why they rejected that particular proposal.

Let me see if I have any other quick questions I can ask. I’m sure

I’m going to have some for the record, if I could get you all to respond back. Just out of curiosity, Mr. Gage, how many of the

50,000 employees at DHS who are represented by AFGE, how

many are dues-paying members, do you know?

Mr. GAGE. In the Border Patrol, we are very heavily organized.

We have over, I think we have about 9,000 or 10,000. We’re probably at about 65 or 70 percent ratio in the Border Patrol. In INS,

it’s lower than that. But I’m trying to think, in the new CBP, for

instance, we have, it’s probably more of like a 40 percent ratio of

union members, 35, 40 percent in the Legacy-INS area. Then we

have a lot of small, we have some attorneys and the membership

there is a little lower. But it really depends on the group. The Border Patrol is probably the most highly organized.

Mrs. DAVIS OF VIRGINIA. Is there any way for you to get back to

me on a number?

Mr. GAGE. Sure.

Mrs. DAVIS OF VIRGINIA. If you could, overall. Don’t break it

down in agencies, but overall of the 50,000, just so we’ll have it.

It would give me some idea of what we’re looking at.

Mr. GAGE. OK.

Mrs. DAVIS OF VIRGINIA. And I have one last question, and then

we’re going to have to dismiss. Ms. Kelley, the regulations as

you’ve said cut back on collective bargaining. But the statement by

the Department insists that they’re willing to work collaboratively

with the unions, even in areas where bargaining is not required.

Do you see that as an opportunity to work with them?

Ms. KELLEY. I know that’s what they say. I don’t believe that it

will happen. I believe there will be enough leeway in the advice

that is given that it will not be encouraged, supported, that managers won’t be held accountable to do it, and because there is not

bargaining, it will be an excuse to not discuss, collaborate, share

information or do anything.

In our experience, over the past year, as a lot of new issues have

come forward, because of the combination of so many employees

into CBP, for example, we have seen exactly that, that they have

run roughshod over the process even that is in place today.

Mrs. DAVIS OF VIRGINIA. I think we all agree, and you all shook

your heads and agreed with me earlier that there does need to be

some changes. As with anything, and I’m one of the first ones

guilty of it, change is scary. It makes people nervous, especially

when you’re talking about their livelihood. I’m hoping that we can

all work together and come up with something that’s good for our

Federal employees. Because you are an asset to us.

The one thing that I have been very pleased with AFGE in, and

with NTEU, is that the times I’ve spoken to you, we haven’t always

154

agree, but we’ve always been open and discussed the issues. I’m

hoping we can continue that process.

And as always, I thank you all for coming and for being witnesses today for us. Hopefully we can work through this and get

some sort of model that will be good for our Federal employees

down the road. We’re going to have some bumps, and we all know

that. I’m hoping that these hearings will make it open and we can

get over those bumps without too many injuries along the way.

Anything else?

[No response.]

Mrs. DAVIS OF VIRGINIA. I thank you all for coming, and again

thank you for your patience. With that, the hearing is adjourned.

[Whereupon, at 1:05 p.m., the subcommittee was adjourned, to

reconvene at the call of the Chair.]

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Æ