Occasional Papers

Number 1, February 2017

The Brief, Eventful History of the

National Security Personnel System

Anthony R. Crain

NSPS
Cover: The Pentagon, Headquarters of the Department of Defense

Source: Defense Imagery

Cover Design: OSD Graphics, Pentagon

Historical Office

Office of the Secretary of Defense

February 2017

Occasional Papers

Number 1

The Brief, Eventful History of the

National Security Personnel System

Anthony R. Crain

NSPS
Contents

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Winding Road from the 1978 Civil Service Reform Act to NSPS . . . . . 2

The Cabinet Secretary as CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Best Practices Task Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

OSD’s Initial Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

The National Defense Authorization Act for Fiscal Year 2004 . . . . . . . . . . . 16

First Attempt at Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

The Secretary of the Navy Assumes Control . . . . . . . . . . . . . . . . . . . . . . . . 24

Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

System Mechanics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

System Collapse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

List of Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

This study is cleared for public release. The views expressed or implied 

within are solely those of the author and do not necessarily represent 

the views of the Department of Defense, the Office of the Secretary of 

Defense, or any other agency of the federal government.

Portions of this work may be quoted or reprinted without permission, 

provided that a standard source credit line is included. The Historical 

Office of the Office of the Secretary of Defense would appreciate a 

courtesy copy of reprints or reviews.
6

i

Foreword

With the publication of this first occasional paper, the OSD Historical Office embarks 

on a new series that intends to provide scholarly perspectives on policy issues, offer 

a forum for our historians’ papers presented at academic conferences, summarize 

office publications that are works in progress, or cover other discrete topics. All of our 

occasional papers will undergo rigorous peer review to help ensure that they meet high 

standards for research quality and objectivity.

In the course of doing research and shaping it into narratives, historians often catch 

glimpses of side avenues and byways diverging from their main route. The fortunate 

historians among us are able to bookmark these for later, and they often become their 

most interesting and meaningful projects. The National Security Personnel System 

(NSPS) is a case in point. The OSD Historical Office conducts and collects oral histories 

of Pentagon personnel at all levels. In the wake of Secretary Donald Rumsfeld’s tenure, the 

National Security Personnel System was very much on the minds of Pentagon leadership 

and line workers alike. When we realized we had over 35 interviews that focused on 

NSPS, reflecting the opinions and accounts of its champions and its detractors, we 

decided to make an original contribution to a perennial discussion about how to strike 

the right balance between employee protections and managerial flexibility. As readers 

will learn in this short study, the discussion played out in spectacular fashion in the early 

years of the 21st century.

Years after the National Security Personnel System’s dissolution, references to the system 

still evoke strong sentiments from those who engineered it, worked under it, and 

opposed it. The strength of protagonists’ memories stems from the personnel system’s 

importance to policymakers at every level. Personnel policy determines how individuals 

are hired, promoted, evaluated, compensated, reprimanded, and fired. At the top of 

the department, the secretary of defense is tasked with making DoD responsive to the 

president and accountable to Congress. When considering just the civilian side of the 

Department of Defense, the secretary manages a workforce larger than that of most 

corporations and which conducts a diverse array of missions. At the same time, the 

department must compete with the private sector to attract, retain, and promote the best 

and brightest civilian employees. Civilian personnel reform will remain a central concern 

for both Office of the Secretary of Defense (OSD) officials, who continually seek to 

attune management to ever-changing requirements, and those whose occupations and 

livelihoods are shaped by it.
1

NSPS

ii

Those who attempt future reforms will want to pay close attention to their precedents 

in order to address some fundamental questions. Is it better to gradually reform a 

longstanding system like the General Schedule? Or should it happen all at once? Is 

getting buy-in from all the constituencies (and within the Department of Defense, there 

are many) worth the effort, or does compromise weaken reform? Will memories of the 

NSPS effort linger, and how will those memories shape reaction to the next reform 

effort, be it large or small?

Anthony Crain’s study of NSPS, based on dozens of oral histories, a newly acquired 

collection of archival material, and a careful reading of arguments for and against NSPS, 

won’t settle these questions once and for all; history rarely provides clear-cut answers. 

But Dr. Crain elevates these questions and shows how each of the major stakeholders 

in the NSPS debate addressed them and shaped them. In taking on a controversial 

issue and taking all sides seriously, he’s provided an auspicious start to the Occasional 

Papers series, which will showcase many of the surprisingly relevant topics that this office 

uncovers in the course of its broader research and service.

The author and I wish to acknowledge the many people who have provided invaluable 

advice and assistance. We are indebted to OSD Historical Office editor Allen Mikaelian 

for his meticulous review and thoughtful improvements. We also appreciate the astute 

critiques from OSD historians Glen Asner, Thomas Christianson, Joel Christianson, 

Richard Hunt, and Shannon Mohan and former OSD historian Jon Hoffman. And we 

are particularly grateful to Kathy Jones, OSD Graphics designer, for her artful design. 

The occasional papers series as well as our other publications are available on the OSD 

Historical Office website. We invite you to peruse our collection at http://history.defense.gov.

Erin Mahan

Chief Historian

Historical Office,

Office of the Secretary of Defense

February 2017

Introduction

In early 2003 Secretary of Defense Donald Rumsfeld attempted to transform civilian 

management in the Department of Defense by replacing the General Schedule 

(GS) system, the federal pay scale system that had governed most civil servants 

since 1949, with the new National Security Personnel System (NSPS). NSPS was a 

pay-for-performance system that established new regulations for civilian personnel 

compensation, promotion, discipline, reassignment, labor relations, and hiring. 

The system’s creators within the Office of the Secretary of Defense (OSD) intended 

to give managers greater latitude to reward top performers with larger pay increases 

and bonuses than they had under the GS system. Because the Department of 

Defense employed about a third of all non-postal federal civilian personnel (roughly 

660,000 civilians worked for DoD in 2003), NSPS was a significant challenge 

to the GS system that had implications far beyond the Defense Department. 

Rumsfeld’s OSD successfully pushed the system through Congress but struggled 

to implement it effectively. At the system’s zenith in 2009 over 200,000 civilians, 

less than one third of the total DoD workforce, were working under NSPS. After 

becoming a subject of great controversy, DoD wound down the system in the first 

years of Barack Obama’s presidency.1

Since the formation of the Department of Defense, most DoD civilians have 

been governed by the rules and regulations of the Civil Service Commission 

or, after the Civil Service Reform Act (CSRA) of 1978, the Office of Personnel 

Management. NSPS was a reaction to, and even a rejection of, some of the 

precepts undergirding the civil service, such as the principle of “rank in job” and 

rigid job classifications, which stemmed from particular political and economic 

conditions of the late 19th and early to mid-20th century. In the minds of its 

architects, NSPS was an attempt to improve responsiveness, effectiveness, and 

efficiency with 21st-century management techniques. To accomplish these goals, 

the NSPS architects attempted to design, implement, and sustain a new system 

in a department that was managing complex military conflicts in Afghanistan 

and Iraq. They confronted a civil service culture deeply embedded in the federal 

workforce and fiercely guarded by members of Congress and public-sector unions, 

which had grown in prominence during the late 20th century. Ultimately, the 

ground beneath the reformers proved too unstable, the girders supporting NSPS 

too weak, and the effort too diffuse. NSPS collapsed in 2009.2
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Occasional Papers • Number 1 NSPS

The Winding Road from the 1978 Civil Service Reform Act to NSPS

The civil service system Rumsfeld wanted to replace was itself the product of a late 

1970s push to bolster merit principles in government by reforming the General 

Schedule, a system widely viewed as inefficient and unmanageable. As Patricia 

Ingraham, a leading scholar of public administration reflects, “By the 1970s, the 

lack of internal consistency in the merit system, as well as the procedural baggage 

it had accumulated in the first hundred years of its history, created a system that 

was widely perceived to be broken.” In a June 1977 Gallup poll, 67 percent of 

respondents believed that federal workers did not work as hard as private-sector 

employees—but 64 percent answered that government employees were better 

paid than private-sector workers, and 76 percent 

said that government employees received better 

benefits. The political atmosphere of the late 

1970s was ripe for bureaucratic reform.3

In 1977, responding to public discontent and 

seeking to assert greater executive control, 

President Jimmy Carter promised reform, 

claiming, “There is no merit in the merit 

system.” He and his appointees concluded that 

regulations meant to protect the civil service 

from politicians had become so onerous that 

they impeded the president’s executive authority. 

Carter hoped to enhance merit mechanisms with 

the Civil Service Reform Act (CSRA), which 

Congress, then controlled by Democrats, passed 

in October 1978. Rather than receive pay increases related directly to tenure, 

GS supervisors under CSRA received only half of their pay raises automatically. 

The other half were held in a pool and distributed to employees according to 

their performance. The CSRA also replaced GS grades 16 through 18 with the 

Senior Executive Service (SES), which gave top executives “rank in person,” 

meaning that those executives could be reassigned throughout the government 

without losing rank. They faced more stringent but more rewarding performance 

evaluations than GS employees.5

Yet Congress dismantled much of the GS pay-for-performance apparatus in the 

following decades and many observers became increasingly convinced that the 

CSRA had failed to strengthen civil service management. Critics claimed the 

CSRA pay pool system was unfair, lacked performance evaluation uniformity 

across agencies, failed to award high performers adequately, and did not improve 

performance. In 1984 Congress replaced the structure with the Performance 

Management and Recognition System (PMRS). PMRS standardized performance 

evaluations and made employees in the top two tiers of a five-tier appraisal system 

eligible for performance awards and competitive merit increases. Under PMRS, 

over 80 percent of midlevel managers received performance ratings that made 

them eligible for pay increases higher than the typical raise in the GS system. 

Nevertheless, managers complained the rating system was unfair. Moreover, 

the large number of pay increases caused personnel costs to rise steeply, and 

many claimed there was no commensurate improvement in performance. Congress scuttled 

the system in 1993.7

The enactment of the CSRA and the federal 

government’s subsequent difficulties in implementing widespread merit pay reform triggered a 

wave of public administration literature on payfor-performance systems. Many scholars found 

that for merit pay to work effectively the system’s 

employees had to be convinced that pay accurately 

reflected their performance. Others questioned 

the emphasis on pay as a motivator for improving 

performance. Jeffrey Pfeffer, professor of business 

theory and organizational behavior at Stanford University, found that pay-forperformance systems often motivated the wrong types of behavior. He stressed 

that the proliferation of pay-for-performance systems in the private sector did 

not constitute empirical evidence for the effectiveness of such systems but merely 

indicated a managerial fad. When examining the evidence, Pfeffer found that the 

pay-for-performance systems frequently “devolve into pay for ingratiation” or 

inadvertently incentivize cheating. Moreover, he argued that managers frequently 

chose to rely on monetary remuneration because it was simpler than an evidencebased management approach to improving an organization’s culture. Pfeffer 

writes, “One might particularly question the relevance of financial remuneration 

compared to a public service motive in a work force that has chosen to work for 

the government instead, for instance, of going into investment banking.” Rather 

“Ask almost any government manager around the country about civil 

service, and you’re likely to hear a 

long list of complaints: The system 

is enmeshed in a web of rules and 

regulations; tests of dubious validity 

are used for entry and promotion; 

exceptional government service goes 

unrewarded while mediocre performance is protected; civil service 

workers get virtual lifetime tenure.”

Neal Peirce, Washington Post, 17 

December 1977  4

“It gives managers more flexibility 

and more authority to hire, motivate, reward, and discipline employees to ensure that the public’s work 

gets done. At the same time, it provides better protection for employees 

against arbitrary actions and abuses 

and contains safeguards against political intrusion.”

Jimmy Carter, Statement on Civil 

Service Reform Act,

13 October 1978 6
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Occasional Papers • Number 1 NSPS

than emulate private-sector practices and focus primarily on pay as a motivating 

factor, Pfeffer argued for a broader improvement of organizational culture: “The 

often disdainful way in which various agencies and their employees are spoken 

about makes instilling a culture of pride in performance difficult. The continuing 

efforts to outsource, downsize, and cut governmental agencies sent not-so-subtle 

messages that the work, and the workforce, are not valued.”8

Although establishing new methods of linking pay with performance throughout 

the government had proven difficult under CSRA, many small-scale payfor-performance demonstration projects started under the act proved more 

lasting and provided lessons for future reform. Reorganization Plan No. 2 of 

1978, which was passed along with the CSRA, created the Office of Personnel 

Management (OPM) and allowed it to experiment by operating up to ten 

different demonstration personnel projects simultaneously. Each could have a 

maximum of 5,000 employees and could last up to five years before Congress 

would decide whether to make the demonstration permanent. These experiments 

tested whether personnel policy changes might improve the performance of small 

and often specialized subsets (relative to the entire federal workforce) of employees 

and provide lessons for large-scale reform. The Naval Weapons Center (NWC) 

and the Naval Ocean Systems Center (NOSC) both started such systems. When 

OPM compared performance at these California-based labs with findings at two 

East Coast labs under the GS system, reviewers found that NWC and NOSC 

had better hiring results and higher performer retention results than their GS 

counterparts. Whether the means to success in small and relatively homogeneous 

organizations with specific missions could transfer to the entire DoD civilian 

workforce remained unclear. Yet, by the 1990s, budget decreases occurred as 

a private-sector technology boom heightened many policymakers’ urgency for 

DoD civilian management reform. The department sought to do more with 

fewer resources.9

After concluding that CSRA had largely failed to achieve many of its architects’ 

aims, Democratic and Republican policymakers in the 1980s and 1990s 

advocated new federal workforce personnel reforms inspired by the private 

sector. The resulting evolutionary changes would update rather than undo the GS 

system. One of the greatest changes came in 1987, when the Federal Employee 

Retirement System (FERS) replaced the Civil Service Retirement System, a 

generous defined-benefit plan that appeared increasingly archaic as the private 

sector shifted to defined contribution plans. By combining a more modestly 

defined benefit pension plan with Social Security and a defined contribution 

plan, called the Thrift Savings Plan, FERS was intended to increase the flexibility 

of the federal workforce.

Nevertheless, reform initiatives were mostly limited to small demonstration 

personnel projects, blue-ribbon commissions, General Accounting Office (GAO) 

reports, and published books and articles that castigated the GS system. In 1989 

the National Commission on the Public Service, chaired by former Federal Reserve 

Chair Paul Volcker, found that “even when the public sector finds outstanding 

candidates, the complexity of the hiring process drives all but the most dedicated 

away.” Responding to these findings, Congress passed the Federal Employees Pay 

Comparability Act of 1990, which granted federal workers pay adjusted to local 

cost of living, sought to make private and public-sector pay comparable, and gave 

agencies new pay authority for critical positions.10

President Bill Clinton wanted further reforms to increase government efficiency 

and cut unnecessary regulations. Vice President Al Gore’s National Performance 

President Bill Clinton and Vice President Al Gore present National Performance Review Awards for the Reinventing Government 

initiative on 1 June 1994. Gore’s review sought to reinvigorate the federal government through streamlining and downsizing. 

The Bush administration later concluded that more needed to be done to enhance managers’ authority. (FEMA Photo Library, 

Photograph by Andrea Booher)
6 7

Occasional Papers • Number 1 NSPS

Review (NPR) concluded that taxpayers paid far too much for a “personnel 

quagmire,” spending billions of dollars for 54,000 personnel staff to classify 

employees within a system of “459 job series, 15 grades, and 10 steps within 

each grade.” Further, GS employees found themselves locked into particular job 

series, as their skills and experience could not 

be transferred. Succinctly damning the federal 

personnel system, Gore’s reviewers wrote, “Does 

this elaborate system work? No.”11

Echoing the Volcker commission’s findings, 

Gore’s review found that the system had become 

so cumbersome that managers themselves often 

could not advise highly qualified aspirants on 

how to apply for positions. High performers 

felt unrewarded and underperformers suffered 

no consequences. In addition to recommending 

the decentralization of personnel management, 

the NPR concluded that some agencies would 

function better if many of their human resources 

practices were exempted from Title 5 of the 

U.S. Code, which codified civil service rules. In 

response, Congress exempted the Federal Aviation 

Administration in November 1995 from many 

personnel rules, including staffing, performance management, compensation, 

and reduction-in-force determinations. The Internal Revenue Service gained 

similar exemptions in 1998. Yet the vast majority of federal employees remained 

in the GS system.12

In 1998 Secretary of Defense William Cohen chartered the U.S. Commission on 

National Security for the 21st Century, which was cochaired by former Senator 

Gary Hart (D–CO) and former Senator Warren Rudman (R–NH) and became 

known as the Hart-Rudman Commission. In its final report, the commission 

warned that the nation faced “an unprecedented crisis of competence in 

government.” It warned that the civil service faced a demographic calamity—as 

aging baby boomers retired, the government would need to recruit more talented 

young people: “Today’s technological age has created sweeping expectations of 

speed, accuracy, and customization for every product and service.... Talented 

people seeking careers where they can quickly make a difference see government 

as the antithesis to best management practices.”14

The problems discussed in the Volcker Report, the National Performance 

Review, and the Hart-Rudman Commission continued to resonate with Defense 

policymakers in the ensuing decade. In 2000, in essays collected in Keeping the 

Edge, Defense officials with experience spanning multiple administrations urged 

a personnel management overhaul to prepare DoD for the 21st century. In his 

contribution to the volume, Ashton B. Carter, then professor of science and 

international affairs at Harvard University and codirector of the Preventative 

Defense Project, stressed:

The current DOD Civil Service system is badly in need of reform. 

It is out of touch with the labor market that supplies its people; 

it inhibits professional development and innovation by its work 

force; and it is incapable of responding to the changing needs of the 

DOD. A new system is needed to attract and retain high quality, 

innovative people who can implement and manage the new DOD.

He wrote that a new system, severed from the General Schedule, could “attract 

the right people because it would have more flexible pay and hiring rules, portable 

pensions, contracts for limited periods of government service as well as easier 

entry, exit, and re-entry into the system.” John White, deputy secretary of defense 

from 1995 to 1997, and David Chu, assistant secretary of defense and director 

for program analysis and evaluation from 1981 to 1993, concluded that “the Civil 

Service has to be judged a failure in its ability to adjust to changing requirements 

and encourage the innovation and continuous improvement needed.”15

In February 2000 the Defense Science Board’s Task Force on Human Resources 

Strategy also concluded that the civilian personnel system desperately needed 

a redesign and recommended that DoD reform its personnel system to adopt 

contemporary private-sector practices. Recognizing other agencies’ successful 

breaks from OPM and anticipating the NSPS architects’ early hopes, the reviewers 

recommended legislation amending Title 10 and Title 5 of the U.S. Code in 

order to transfer civilian management authority from OPM to the secretary of 

defense and permit the “Secretary to establish policies and develop force-shaping 

tools for all components of the new ‘total force’ and in doing so meet changing 

DoD requirements.” With such authority, the reviewers believed, the secretary 

“Fairness was achieved by treating 

everyone equally, but in a world full 

of compelling individual situations, 

‘fairness’ became unresponsiveness. 

Bias was avoided by making sure 

local officials and front-line federal employees couldn’t make discretionary decisions—even though they 

knew best what needed to be done—

and by punishing them when they 

did. The result was a system that 

hobbled users and abusers alike, 

treated adults like children, and 

made everyone a suspect.”

Al Gore in Common Sense 

Government, 1995 13
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Occasional Papers • Number 1 NSPS

could craft a more flexible system that could compete with businesses for the best 

employees. Many of these ideas would be put into action during the presidency 

of George W. Bush.16

The Cabinet Secretary as CEO

In 2001 shortly after Bush entered office, the Office of Management and Budget 

(OMB) published The President’s Management Agenda, which called for “freedom to 

manage” and encouraged agencies to make greater use of existing authorities while 

the administration sought statutory authority to reform management practices. 

Richard Falkenrath, special assistant 

to the president, later reflected that 

Bush intended “to treat department 

and agency heads like CEOs, and let 

them control their agencies.”17

Gradually, administration off­icials 

concluded that the General Schedule, 

created in 1949 when most government employees performed routine, 

standardized tasks, was unsalvageable. 

Believing that previous incremental 

reform efforts had failed to improve 

the personnel system, they concluded 

that attempts to save it would be overly 

burdensome, time consuming, costly, 

and ineffective.18

In April 2002 OPM Director Kay 

Coles James released a white paper 

recommending the total elimination of the GS, arguing that it had become 

top-heavy, failed to link pay to performance, and did not attract the best and 

brightest. Its passing should not be mourned, she wrote, as “the fact that a system 

like the General Schedule may be at the end of its useful life is nothing new in 

modern post-industrial organizations, as the Federal Government must become.” 

OPM officials planned to replace what they saw as a moribund system with a 

modern meritocratic scheme. OPM officials wanted departments to work with 

them to transform their personnel systems rather than allow individual agencies 

to unilaterally craft personnel systems that suited their purposes. The cabinet 

secretaries would gain greater flexibility by collaborating with OPM, which 

offered personnel expertise and experience, for the writing of enabling legislation 

and regulations.19

Such a plan anticipated someone with the background and temperament of 

Donald Rumsfeld. President-elect Bush wanted “a tenacious, innovative secretary” 

to transform DoD to reflect the geopolitical shifts brought by the Cold War’s 

end, overcome bureaucratic resistance to changes, and create an “agile, lethal, 

readily deployable” military. He picked Rumsfeld, 

who had served as Gerald Ford’s secretary of 

defense, to “run the bureaucracy, not let it run 

him.” After leaving the Pentagon following Ford’s 

defeat by Jimmy Carter, Rumsfeld had proved an 

effective CEO of two Fortune 500 companies. 

In both cases, he increased profits drastically by 

cutting costs, focusing the business operations 

on core missions, and hiring a close-knit, loyal 

team of skilled operators capable of influencing 

the government to ensure regulations did not 

become overly onerous. He regarded laying off 

surplus employees, or “pruning” as he termed it, 

as central to success and even good for those who 

had lost their jobs, as they could pursue careers 

more appropriate to their skills and interests.20

Returning to the Pentagon in 2001, Rumsfeld 

attempted to bring his private-sector management 

methods to DoD to make the department 

more flexible and effective. Early in his tenure, one of his short and frequent 

memos, known as “snowflakes,” revealed his distaste for what he considered 

an antiquated system: “Grade and rank systems [are] more than 100 years old 

and ... were rejected years ago by the for-profit sector in favor of flatter, more 

nuanced organizations and compensation arrangements.” In a 10 September 

2001 Pentagon speech to the civilian workforce, he called the DoD bureaucracy 

“an adversary that poses a threat, a serious threat, to the security of the United 

States of America.... With brutal consistency, it stifles free thought and crushes 

new ideas.” He stressed DoD’s need to “employ the tools of modern business—

Donald Rumsfeld escorts President Bush and Vice President Dick Cheney 

as they depart the Pentagon on 19 June 2001. President Bush wanted his 

agency heads to act as CEOs and aimed to give them greater management 

flexibility. (DoD photo by Helene C. Stikkel)

“The system did not move people into 

the positions for which they were 

best suited, nor did it reward good 

performance. As I knew well, the 

ability to hire and reward the most 

talented and move underperformers 

into other lines of work was essential to success in the private sector. 

Yet due to congressional restrictions 

and the influence of government labor unions, it was nearly impossible 

for senior DoD officials to recruit, 

promote, transfer, or replace civilian 

workers efficiently.”

Donald Rumsfeld reflecting on the 

General Schedule in his memoir, 

Known and Unknown21
10 11

Occasional Papers • Number 1 NSPS

more flexible compensation packages, modern recruiting techniques and better 

training.” As with other aspects of Rumsfeld’s transformation drive, the successful 

legislative push for a personnel system change became possible only after the 

September 11 terrorist attacks, when Bush’s popularity soared and Congress became 

receptive to legislation justified in national security terms. Rumsfeld’s Quadrennial 

Defense Review, released on 30 September 2001, 

stressed DoD’s need for “new tools to manage ... 

and an overhaul of existing approaches.”22

After 11 September 2001 the White House 

began the largest U.S. government restructuring 

since the 1947 National Security Act. Bush 

announced plans for a new Department of 

Homeland Security (DHS) on 6 June 2002. 

The department’s formation provided the 

administration with an opportunity to challenge 

the GS system and government unions. DHS 

and OPM worked together to institute Max-HR, 

a short-lived pay-for-performance civilian personnel management system at DHS that 

overrode collective bargaining requirements. 

Public-sector unions eroded Max-HR through 

lawsuits before the Democratically controlled 

Congress ended it altogether. OSD officials 

later viewed Max-HR as a cautionary tale that 

warned against close collaboration with OPM. 

They reasoned that, unlike DHS, DoD was an 

established agency and the secretary of defense 

already managed military personnel. With a 

proven executive at the helm, OSD could craft a 

transformational system on its own.23 

Upon reviewing DoD personnel practices, Rumsfeld and his team concluded 

that the department faced considerable barriers to building a workforce with the 

proper set of skills to meet emerging technological challenges. Rumsfeld picked 

David Chu to serve as his under secretary of defense for personnel and readiness 

(P&R). Chu had earned a Ph.D. in economics from Yale University and had 

served as assistant secretary of defense and director for program analysis and 

evaluation from 1981 to 1993. His first day on the job was 1 June 2001, nearly 

six months into Rumsfeld’s tenure. Chu believed that the 1990s post-Cold War 

reduction of civilian personnel contributed to a demographic imbalance weighted 

heavily toward older employees that had to be addressed for DoD to operate 

effectively as the baby boom generation retired from the workforce. P&R officials 

concluded that the Pentagon had been hemmed in by rigid civil service rules and 

consequently relied primarily on hiring freezes, 

voluntary turnover, retirements, and buyouts to 

achieve this downsizing.25

But since civilian billets were simply eliminated after retirements, these methods had 

the unintended consequence of leaving the 

department with an older workforce. Between 

FY 1987 and FY 2002, the department reduced 

its direct-hire U.S. civilian personnel from 

1,050,541 to 655,746, a reduction of almost 

400,000 billets. The Office of the Under 

Secretary of Defense for Personnel and Readiness 

found that 73 percent of the DoD workforce was 

over 40 years old in May 2001 versus 54 percent 

in 1989. By the early 2000s, P&R officials 

concluded that the Defense workforce had 

more seniority, but managers lacked sufficient 

means to reward talent, competency, and 

performance, which made it difficult to ensure 

that the best employees would fill positions 

opened by retirement. Responding to the 

1990s information revolution and correcting the missteps of the 1990s postCold War military drawdown, they believed, required the flexibility to change 

job categories in order to alter the demographic composition of the civilian 

workforce.26

Chu’s P&R team concluded that DoD was struggling to compete with technology 

business juggernauts which had swept away long-established personnel practices. 

As the economy boomed, employers competed fiercely for the best college 

graduates and technical workers. P&R officials surmised that as the “Generation 

Xers are maturing into the mainstay of the workforce for future decades,” the 

“We talked to members and those on 

the Government Affairs Committee 

in the Senate and Government Reform in the House. They were a little 

territorial about it: ‘Why are you divorcing from civil service? We have 

Homeland Security,’ which they 

have just given some unique authorities, ‘Why can’t you just do the 

Homeland Security thing?’ And my 

response was, ‘You did good work 

with Homeland Security. We just 

want to go the next step,’ so we tried 

to make it logical. I said, ‘Use the 

Department of Defense as a laboratory. Let us try some of these things,’ 

and we earned over months of hearings and meetings and sessions 

some degree of credibility where we 

could enjoy some confidence that it 

was going to move forward.”

Charlie Abell, 16 September 2014 

interview 24

“The human resource challenges 

facing DoD have changed rapidly 

over the last decade as a result of 

many factors. A robust economy, 

civilian sector competition to fill 

high-technology positions, declining 

American public interest in public 

service, major changes in the Department’s missions and operational 

tempo, and a significant downsizing 

of the Department’s workforce are a 

few examples. Reducing the size of 

the overall workforce by more than 

a million personnel, from a high in 

1987 of 4.1 million, has left in place 

a very different force distribution—

in age, education, and skill.” 

Craig Fields, Final Report of 

the Defense Science Board Task 

Force, February 2000 27
12 13

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imminent mass retirements of the baby boomers would mean that DoD would 

need to fill a talent and experience vacuum with the best and brightest of the 

“Digital Generation.” To do so effectively, they would need to implement personnel 

practices to ensure that the best were hired, retained, and promoted, as “Digital 

Generation” candidates differed substantially from earlier generations that prized 

long-term job security. Rumsfeld’s personnel team concluded that DoD faced 

great disadvantages in this competition; its hiring processes averaged five months 

and entry-level pay in some fields was inflexible and uncompetitive, while private 

companies often could hire promising graduates immediately and better match 

pay with skills. The secretary’s team argued that because the Pentagon was at a 

disadvantage when it came to hiring technology-savvy workers, it increasingly 

had to rely on private contractors. Rather than navigating the myriad rules and 

regulations surrounding civilian hiring and management, managers increasingly 

decided, according to Chu, “I’m not going to bother hiring somebody; I’m just 

going to write a check to a contractor.” The belief that the DoD civilian workforce 

faced a demographic and managerial crisis and needed more flexibility to deal 

with 21st-century challenges was the core assumption behind the creation of the 

National Security Personnel System.28

The Best Practices Task Force

Responding to Rumsfeld’s request for additions to DoD’s 2003 legislative agenda, 

Chu emphasized, “If you’re willing to take on a big issue, Mr. Secretary, the 

civilian personnel system ought to be one such issue.” Rumsfeld was more than 

willing. When Deputy Under Secretary of Defense (Civilian Personnel Policy) 

Ginger Groeber told Rumsfeld that it was politically possible to institute pay 

banding, which would condense GS grades and steps into larger bands and 

give managers greater pay flexibility, he responded: “Is that all there is? Are 

you kidding me? Is this all you guys want to change?” Baffled by the numerous 

restraints on civilian management, he tasked personnel officials to come up with 

more comprehensive reforms.29

In response, Chu and Under Secretary of Defense for Acquisition, Technology, 

and Logistics Edward Aldridge launched the Best Practices Task Force to 

determine what they could learn from the demonstration projects operating 

under personnel rules substantially different from the GS system. Not wanting 

to lose momentum, Chu asked Groeber in March 2002 to conclude the study by 

September, a turnaround “which was pretty sporty in terms of major bureaucratic 

reviews.” In addition to assessing the demonstration projects, Groeber’s reviewers 

collected evidence to address potential objections to a new pay-for-performance 

system, as they knew the department could not implement a transformative 

personnel system uncontested.30

The speed of the review resulted in friction between 

OSD reviewers and the services. Although Chu and 

Groeber contended that the task force obtained 

service support for management change, many of 

those officials later remembered it differently. The 

military services and OPM also felt excluded from 

the review, according to some. Mary Lacey, then 

technical director of the Naval Surface Warfare 

Center and later NSPS program executive officer, 

recalled, “The thing that was troublesome was that 

the opinions and experiences of the people that had 

been operating under these alternative personnel 

systems, and in some cases for as long as 25 years, 

were really discounted.” Moreover, although P&R 

made OPM aware of the Best Practices Task Force, 

the reviewers did not solicit the personnel agency’s 

counsel. Personnel and Readiness also excluded 

OPM from the initial crafting of legislative 

proposals stemming from the study, believing that 

such collaboration would delay its implementation 

and result in incremental rather than wholesale 

reform. They wanted the system rolled out quickly, as they felt a quick launch 

would give the secretary the control over civilian personnel he needed to wage a 

global war on terrorism more effectively.31 

OSD’s Initial Goals

In line with Rumsfeld’s pursuit of military transformation, OSD personnel 

officials initially developed ambitious goals for NSPS. They wanted a system 

that rewarded top performers quickly, encouraged poor employees to improve 

or leave, and freed managers from impediments to promote, demote, or 

Under Secretary of Defense for Personnel and 

Readiness David Chu at a Pentagon media roundtable 

on 8 August 2001. Chu launched the Best Practices 

initiative and promoted the legislation necessary to 

implement NSPS. (DoD Photo by R. D. Ward)
14 15

Occasional Papers • Number 1 NSPS

reassign employees. They emphasized the need to appeal to the best college 

graduates, considered reducing the importance of veterans’ preference to hiring 

and retention, and hoped to accelerate hiring and disciplinary actions. Most 

important, speed remained the architects’ top priority as they considered a 

department-wide civilian personnel transformation.

In November 2002 Chu told Rumsfeld that after reviewing DoD’s personnel 

practices, he and his staff recommended a system similar to AcqDemo, the 

acquisition demonstration project, for all Defense civilians. Implemented in 

1999, AcqDemo sought to simplify and expedite hiring and replaced GS grades 

and steps with pay bands. What worked for acquisition personnel would work 

for the entire department, they reasoned. Rumsfeld agreed. Groeber named the 

proposed pay-for-performance system the “National Security Personnel System,” 

stating that the name best described the system’s raison d’être. Despite the NSPS 

architects’ attempts to mimic the best practices of successful demonstration 

projects, lab directors with alternative personnel systems mostly wanted to 

continue running their own systems rather than subordinate themselves to an 

untested department-wide structure and successfully lobbied Congress to remain 

out of NSPS. As a consequence, the new system was deprived of many who had 

positive experiences with personnel reform.32

Key officials within the Office of the Under Secretary of Defense for Personnel 

and Readiness initially discussed limiting veterans’ preference, reasoning that 

since the Pentagon looked favorably on those familiar with the military, it had 

already staffed itself with proportionally more veterans than other agencies. 

Moreover, because older veterans were mostly male and DoD recruited veterans 

heavily, the Defense workforce had become male-dominated, especially at the top 

of the GS scale. In 1998 less than 15 percent of GS-15 DoD civilian employees 

were female. P&R officials concluded that veterans, because of the preference, 

often received scores higher than better-qualified applicants, causing supervisors 

to reject entire applicant lists, restart hiring processes, and rework job postings 

in the hope of attracting more qualified candidates. OSD officials feared that the 

preference placed veterans in jobs for which they were underqualified, causing 

supervisors to work around them by hiring contractors.33

The NSPS architects also sought to sever DoD civilian employees from OPM. 

Rumsfeld came to believe, to his consternation, that OPM could successfully 

stymie personnel decisions, making it difficult to select employees quickly to 

accomplish certain unique tasks. Thus, although Deputy Secretary of Defense 

Paul Wolfowitz recommended, for politically pragmatic reasons, emulating the 

DHS personnel legislation language regarding coordination with OPM, he also 

suggested providing the secretary with a “magic bullet” to overrule the agency: 

“On personnel matters that affect the ability of the Department of Defense to 

perform essential national security functions,” the proposed legislation read, 

“the Secretary may overrule the [OPM] Director, subject to the appeal to the 

President.” The secretary could of course interpret such essential functions 

broadly. Moreover, OSD wanted civilians entirely exempted from Title 5 of the 

U.S. Code, which codifies civil service policies, and placed instead under Title 10, 

which codifies armed forces personnel laws. OSD’s original NSPS proposal read, 

“Notwithstanding all other titles, the Secretary of Defense may create his own 

human resources management system.” OPM soon discovered and attempted 

to derail DoD’s separation efforts, forcing Rumsfeld to assume a greater role in 

defending the proposed system.34 

The system architects also excluded government employee unions from the initial 

stages of NSPS development. OSD officials feared that bargaining with the 

unions would result in numerous delays and a far less transformational system. 

Nevertheless, Groeber recalled that she had repeatedly tried to meet with union 

officials, who studiously avoided her. Moreover, she stated that union officials 

told her they wanted no part in formulating NSPS concepts but would wait 

for OSD to present them before commenting. She viewed unions’ avoidance 

of early cooperation as a stratagem to quash NSPS by allowing union leaders to 

later claim that OSD had acted alone. Conversely, union officials viewed DoD’s 

apparent willingness to meet with them as a ploy to allow OSD to later claim 

to Congress that they had sought union officials’ input when they had not. The 

American Federation of Government Employees (AFGE) Chief of Staff Brian 

DeWyngaert and General Counsel Mark Roth believed that Groeber and her 

team had little genuine interest in working with the unions.35

Personal and Readiness officials worried most about opposition from AFGE, the 

largest union representing DoD employees. Chu appealed to AFGE President 

Bobby Harnage in January 2003, well before OSD publicized its legislative 

proposals: “If we don’t change this system, the civilian workforce of this department 

is slowly going out of business because the rules are so cumbersome. When a 
16 17

Occasional Papers • Number 1 NSPS

new function arises, no one wants to turn to civil servants. It’s too hard to hire. 

It’s too hard to pay competitively. It’s too hard to manage.” Harnage, however, 

felt that OSD exaggerated managerial problems and wanted to use the national 

security imperative as a pretext to degrade workers’ rights and weaken the unions. 

Later, Chu concluded that the union leader refused compromise because he faced 

AFGE presidential reelection, and any concession to the Bush administration 

would doom his prospects. Despite his resistance, Harnage lost the election in 

August 2003 to John Gage, a more voluble foe of the administration’s policies 

who had made opposition to NSPS a campaign centerpiece.36

Harnage’s early opposition presaged the fierce battle unions would wage as Congress 

considered the NSPS proposal. Union leaders bitterly opposed the authorizing 

legislation at congressional hearings, attacking every aspect of the proposed system 

and accusing the Pentagon of nefarious motives and methods. On 29 April 2003 

the AFGE president warned that the Pentagon was now directing the “shock and 

awe” approach it employed against Saddam Hussein’s regime in Iraq on Congress 

in a quest to eradicate “decades of social progress” and punish “a workforce that 

has just made a crucial and extraordinary contribution to our victory in Operation 

Enduring Freedom.” He accused OSD of “arrogance,” “bully[ing],” mounting 

a “disinformation” campaign, issuing “the not-so-veiled threat that if they don’t 

get the power they demand they’ll simply privatize everything,” moving “money 

and jobs to political favorites and cronies,” and seeking “unchecked authority” 

for the secretary. He decried the pay-for-performance concept, asserting: “Expert 

opinion is unanimous that individualized pay-for-performance schemes, if they 

make any effort whatsoever to be fair and based on measurable factors, eat up an 

enormous amount of managerial resources and make everyone unhappy. They 

do not improve productivity and they do not accomplish organizational goals.” 

Although Harnage exaggerated when he claimed expert unanimity, his warnings 

that NSPS would consume excessive managerial resources proved prophetic.37

The National Defense Authorization Act for Fiscal Year 2004

In early 2003, as the Pentagon prepared for war with Iraq, Rumsfeld pursued 

White House backing for NSPS after it became evident that OPM had successfully 

attacked a key part of the proposal. OSD had submitted the legislative proposal 

directly to the OMB without prior consultation with OPM. Officials from OPM 

took up their cause with OMB, stating that exempting DoD from Title 5 would 

give it an unfair advantage in personnel recruitment and retention over the rest 

of the government, allowing DoD to poach employees from other departments 

and agencies. OMB successfully pressed DoD to drop its exemption proposal.38

Forced to readjust tactics, OSD went after exemption authority through other 

means. Rumsfeld believed his cabinet-level status would allow him to convince 

White House Chief of Staff Andrew Card to arbitrate differences over NSPS 

legislation in DoD’s favor. Rumsfeld, Wolfowitz, and Chairman of the Joint 

Chiefs of Staff General Richard Myers met with Card and the director of OPM at 

the White House. To Chu’s surprise, Myers had offered to join them, explaining, 

“I think this is important. This is critical for the Department.” After learning 

about NSPS, the chairman became an enthusiastic supporter of personnel system 

reform to better support the military. Card thought Rumsfeld brought along 

the coterie of top Pentagon 

officials to express DoD’s 

earnestness but was concerned 

that OPM viewed the attendance of such a high profile 

group for an HR matter as 

indicative of DoD’s hubris. In 

a tense meeting, the Defense 

leaders argued that the department already managed 

over 1.4 million active and 

1.2 million guard and reserve 

military personnel. It could 

handle DoD civilians, both the 

GS employees and members of 

the Senior Executive Service. 

Card balked at DoD operating 

independently and refused to 

allow the Pentagon to drop 

veterans’ preference or manage its own SES cadre. Nevertheless, the White House 

supported a national security waiver in the proposal to grant the secretary authority 

to prescribe NSPS regulations without the OPM director. OPM and DoD leaders 

both believed they had lost vital parts of their arguments and continued to promote 

contrasting agendas: the former attempted to link NSPS to the administration’s 

Rumsfeld applauding President George W. Bush during his remarks before signing 

the National Defense Authorization Act at the Pentagon on 24 November 2003. In 

addition to funding the Department of Defense, the act authorized the secretary to 

implement the National Security Personnel System. (DoD photo by Helene C. Stikkel)
18 19

Occasional Papers • Number 1 NSPS

wider personnel reforms while the latter moved to sever the system from the rest of 

the government.39

After gaining the administration’s support, Rumsfeld allowed his P&R team 

to test congressional receptivity, which had improved markedly after the 2002 

midterm election. For the first time since 1934 the incumbent president’s party 

gained seats in both houses. With Bush’s popularity rating at 63 percent prior 

to the congressional elections and the Global War on Terrorism preoccupying 

voters, the Republicans gained a majority in the Senate and retained their 

majority in the House.40 Republican leaders were eager to give DoD authority to 

revamp its civilian personnel system. “I was knocking on an open door from their 

perspective,” Chu recalled.41 He found the chairman of the House Government 

Reform Committee, Thomas Davis (R–VA), and the Chairman of the House 

Armed Services Committee, Duncan Hunter (R–CA), particularly sympathetic 

to NSPS and critical allies. He and Groeber also tried to enlist congressional 

Democrats and met with those who privately expressed support for or interest 

in NSPS. Groeber recalled that after taking a seat in Senator Edward Kennedy’s 

(D–MA) office, the senator’s two Portuguese water dogs walked to her and lay on 

her feet. Kennedy told her that his dogs can detect the character of a person, and 

he had never seen his dogs do that. He said they trusted her and he would trust 

her. Although he would not support NSPS, he would not oppose it. But with 

many skeptical about its feasibility and others privately conscious of the need to 

maintain labor union support, most Democrats opposed the system.42

Throughout the months of legislative deliberations, Defense leaders repeatedly 

stressed the national security imperative heightened by the terrorist attacks of 

9/11 to reform civilian management. Speaking in June 2003 before the Senate 

Armed Services Committee, Rumsfeld argued that 320,000 military personnel 

performed civilian functions. Replacing soldiers with civilians would relieve stress 

on military manpower while troops fought in Afghanistan and Iraq. He contended 

that supervisors had “to be freed up so they can make greater use of the Civil 

Service, rather than being forced to use military personnel or contractors because 

they cannot efficiently manage the DoD civilian workforce.” He explained that 

83 percent of civilians supporting Operation Iraqi Freedom were contractors and 

a mere 17 percent were civil servants: “Why? Because in most cases, the complex 

web of rules and regulations prevents us from moving DoD civilians to new tasks 

quickly. As a natural result, managers in the Department turn to the military or 

to private contractors to do jobs that DoD civilians could and should be doing.” 

Of course, the DoD’s increasing reliance on contractors in the late 20th and early 

21st centuries was not merely a result of cumbersome rules and regulations—

DoD relied on privatization to maintain critical functions while official civilian 

and military personnel numbers stagnated or dropped, especially after the end 

of the Cold War. Yet, rather than just relying more directly on the private sector, 

Rumsfeld argued that DoD must emulate it.43 

Democrats’ strong opposition required OSD and congressional Republicans 

to resort to creative legislative maneuvering to push NSPS through Congress. 

Continued White House backing proved helpful since Bush’s popularity was still 

high. Rumsfeld also enlisted Vice President Richard Cheney. David Chu recalled 

that OSD officials had explained to Cheney by video conference the merits of 

NSPS, about which he had heard “evil things.” According to Chu, the vice president 

responded, “This is a sensible thing to do.” The president’s legislative team helped 

convince a sufficient number of House and Senate Republicans to support the 

enabling legislation. After four months of deliberation, the Senate and the House 

agreed on a final National Defense Authorization Act (NDAA) for fiscal year 

2004 that granted DoD authority to implement NSPS. The labor relations sunset 

provision, which granted DoD the right to curtail collective bargaining until 

after November 2009 unless Congress authorized an extension, proved critical for 

compromise and later crucial for allowing DoD to parry the unions’ legal attacks 

on the system. The House and Senate passed the conference report on 11 and 12 

November, respectively, and Bush signed the authorization act on 24 November 

2003. The act gave the defense secretary authority to develop and deploy NSPS, 

but because Congress did not approve his desired national security waiver, he 

had to do so in coordination with the OPM director. The secretary had gained 

enactment authority, but still needed a feasible implementation plan and had to 

work out what coordination with OPM would entail.44

First Attempt at Implementation

Initially, the Defense Civilian Personnel Management Service directed 

NSPS implementation. On 1 December 2003 OSD established the NSPS 

implementation office; Bradley Bunn headed the office and reported to Groeber. 

The implementation team aggressively pursued ambitious goals, agreeing to 

convert the entire department within two years and stating that there would 

be one DoD civilian personnel system rather than separate systems for OSD and 

the services. By 11 February 2004 the team decided to migrate 300,000 DoD 
20 21

Occasional Papers • Number 1 NSPS

employees to NSPS by October 2004, focusing primarily on white-collar employees. 

Rumsfeld and Chu set the tempo. With an emphasis on a speedy rollout and a 

desire to create the most transformational system possible, OSD developed NSPS 

plans without soliciting input or “buy-in” from demonstration personnel system 

leaders, the services, government employee unions, or the Office of Personnel 

Management. The lack of input helped cause the 

initial implementation drive to falter.45

Groeber later spurned the notion that OSD had 

snubbed the services and argued that OPM tried 

to maintain excessive control over DoD personnel. 

Her actions were guided by the idea that too much 

cooperation, at too early a stage, would blunt the 

system’s transformative edge and delay its rollout. 

Instead, OSD planned to present a fait accompli

quickly, then persuade or pressure others to accept 

the system. She thus restricted planning for the 

transformation of the entire Defense Department’s civilian workforce system to 

OSD. She believed, for reasons of national security, that the secretary should have 

the same authority to manage civilians as he did when managing the military and 

should not be forced to spar frequently with OPM over civilian management.47

Many military service human resource officials found this approach authoritarian. 

William Navas, assistant secretary of the Navy for manpower and reserve affairs, 

felt that Groeber “was under the impression that she could take the law into her 

own hands with a small group of her people in OSD—draft the implementing 

regulations, and issue them to the services ... and the DoD agencies, and that 

they would be implemented in a very short period of time.” Sharon Seymour, 

then associate director of personnel policy on the Air Staff, stressed that OSD 

demanded a quick rollout. She was of the opinion that Groeber “was not 

a particularly democratic person when it came to these things. [The political 

appointees] were in charge and we weren’t.... [Groeber] was a hard case, she was 

hard to get along with.” Seymour felt that the OSD’s haste was meant to allow 

it to maintain design control and “jam” the system through DoD before the 

unions could mobilize against it. Yet union mobilization proved rapid enough to 

effectively resist the initial implementation attempt.48

Union leaders reacted soon after Congress passed NSPS enabling legislation. They 

agreed to a meeting with OSD and OPM officials on 26 and 27 February 2004. 

Prior to the meeting, OSD presented the unions with a paper that laid out NSPS 

concepts, including replacement of collective bargaining with union consultations. 

Even before the meeting took place, union leaders castigated NSPS in conversations 

with members of Congress and the media. And at the meeting, Groeber told union 

representatives: “The law says that DoD can put in place an NSPS, and the means for 

your participation, unions, is this process. It is meet and confer; it is not bargaining.”

Both her tone and the proposals infuriated union officials. In particular, they took 

exception to the proposed Defense Labor Relations Board, described by OSD as 

a third party that would resolve labor-management disputes. The unions assumed 

that the defense secretary would handpick compliant board members. According to 

the AFGE meeting minutes, one union leader complained at the conclusion of the 

second day: “I take exception because it is as if you are speaking to us like we are 

children.” Another exclaimed: “I have sat here for the last two days listening to your 

bullshit. I represent over 600,000 DoD employees. We are not going to be a part 

of this dog and pony show anymore. We will leave our labor relations [people] and 

attorneys here to finish this.”49

OSD’s concepts also distressed officials at OPM and OMB. OMB questioned 

why OSD opted not to follow the personnel regulations established by the 

Department of Homeland Security and warned that the proposal threatened to 

diminish veterans’ preference, which would contradict the administration’s policy. 

On 9 March 2004 OPM Director Kay Coles James sent Rumsfeld a critique of 

the NSPS design proposals. She argued that the Pentagon’s overreach endangered 

congressional support for the DHS system, NSPS, and the Bush administration’s 

attempt to transform the entire federal personnel system. OPM officials found 

particularly alarming proposals designed to diminish veterans’ preference, which 

they felt must remain “sacrosanct” in the new system. The proposed regulations 

would limit veterans’ preference in reduction-in-force layoffs to only those with 

the most severe disabilities and would practically end veterans’ preference for 

hiring decisions, she wrote. Moreover, under NSPS, veterans would no longer 

have the right to a pretermination notice and hearing after one year of federal 

service but would need three years like nonveteran employees.50 

George Nesterczuk, the senior advisor to James on NSPS who had drafted the 

letter, recalled that OPM officials reasoned that DoD could not afford to have 

powerful veterans’ groups joining the unions in opposition. If united, such forces 

“The CPMS office at DoD was sharing information with OPM, but it 

was after the fact—‘This is what 

we’re going to do tomorrow.’ ...

It wasn’t ‘Let’s talk about what we 

might do next week.’”

George Nesterczuk, 26 August 

2008 interview  46
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Occasional Papers • Number 1 NSPS

might kill not only NSPS but also other aspects of the administration’s legislative 

agenda. The letter warned that the NSPS proposals were too specific and cautioned 

that poor execution could undermine their shared goal of transforming personnel 

management. OPM found the unions’ negative response “predictable.” Although 

OPM concurred with OSD’s efforts to avoid being hamstrung by collective 

bargaining, the letter warned:

The proposal may be contrary 

to law, insofar as it attempts to 

replace collective bargaining 

with “consultation” and eliminate collective bargaining 

agreements altogether. In addition, other elements of the 

proposal—for example, those 

dealing with union elections 

and dues withholding—lack a 

clear and defensible national 

security nexus and jeopardize 

those parts that do.

The letter recommended that OSD 

concern itself less with establishing 

deadlines and regulations and more with 

getting the support of the civilians who 

would be converted into the system. 

Although OPM was attempting to be helpful, the letter indicated just how far 

apart OPM and OSD remained on NSPS.51

Having sensed growing opposition, even before receiving James’ letter, Rumsfeld 

asked Secretary of the Navy Gordon England to review the system on 12 February 

2004. England had vast managerial experience as a senior executive at General 

Dynamics and viewed addressing civilian personnel matters as essential to DoD’s 

long-term effectiveness. England had developed good rapport with James while 

working with her to implement the DHS personnel system when he briefly 

served as deputy secretary of homeland security. He concluded that the P&R 

implementation team’s approach, widely perceived as unilateralist, would end 

in debacle. England reflected that their “approach was just not sound in terms 

of their expectations, what they could accomplish.” He stressed, “I just couldn’t 

imagine we could implement a system this fast in the federal government without 

OPM.” England later reflected, “That was not an appropriate way to do a new 

personnel system.” Members of Congress who helped pass NSPS enabling 

legislation fulminated at DoD’s approach and intimated that they would revoke 

NSPS authority if OSD did not change course.52

England persuaded Rumsfeld that implementation would require support from 

OPM and those who felt insulted and snubbed. He remembered telling the 

defense secretary that implementation would fail: “There was no possible way of 

implementing this in the Department the way 

it was being approached, and... ongress wasn’t 

going to let us do it anyway, and, therefore, you’d 

better stop what’s doing and recreate a whole 

new process for the National Security Personnel 

System.” England warned that NSPS would end 

in a fiasco if rolled out without the backing of 

those who would implement it. OPM had already 

expended much political capital driving the new 

Department of Homeland Security personnel 

system through Congress. White House officials 

feared that if DoD veered too far from the course 

DHS had already set, the administration’s 

efforts to reform management in the entire 

federal government would derail. England felt Chu’s personnel staff had “let 

him down.” He explained that “Their approach...was just not sound in terms 

of their expectations, what they could accomplish,” and stressed: “Look...this 

thing that you want to implement might be the best thing since sliced bread. 

But in this town, the process for implementing it is as important, if not more 

important, than the end product.”53

England argued for mounting a more significant effort over a longer period of 

time to achieve acceptance among all parties with an interest in the system. He 

presented his case to the Senior Level Review Group, an assemblage of top uniformed 

and civilian officials who met regularly during the Rumsfeld era. Groeber strongly 

disagreed, arguing that the implementation goals were carefully considered and 

realistic. England prevailed and advised a strategic pause along with a comprehensive 

redesign to allow OSD to address the system’s shortcomings while gaining the trust 

Secretary of the Navy Gordon England addressing U.S. sailors aboard 

the USS Theodore Roosevelt in Norfolk, Virginia, before they 

deployed on 19 September 2001. In early 2004, Secretary Rumsfeld 

turned to England to review and overhaul the implementation of 

NSPS. (Photo by PHC Dolores L. Parlato)

“There was much trepidation... 

about moving forward in the manner and the speed that we were intent upon going. And Gordon England, who was then Navy Secretary, 

specifically was very upset with this. 

He went to Rumsfeld, so Rumsfeld 

moved authority over deployment 

from my office to England, as a person, in early 2004.” 

David Chu, 25 March 2009 

interview 55
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Occasional Papers • Number 1 NSPS

of those whose support was needed. Rumsfeld agreed. He opted for England, rather 

than Chu’s office, to direct implementation, even while serving as secretary of the 

Navy. Groeber, no longer spearheading NSPS implementation, left the federal service 

shortly after England took charge.54

The Secretary of the Navy Assumes Control

The change meant that the secretary of the Navy was directing a department-wide 

transformation—a rather unconventional arrangement. On 19 May 2004 England 

was designated the NSPS senior executive. The implementation team now answered 

directly to him, and the Office of Personnel and Readiness would assist the effort. 

England shifted the implementation focus to achieving broad support and preparedness 

for the new system through consultation and compromise. Moreover, he promised to 

work with OPM to implement the system and attempted to achieve union agreement. 

He accomplished far greater success with the former. Principal Deputy Under Secretary 

of Defense for Personnel and Readiness Charles Abell recalled: 

When Secretary England was tasked to oversee this, boy, that was Sir 

Galahad riding to the rescue. He came in. He said: Let’s establish a 

workgroup, multiservice, which was a great idea, and, also, if he said it 

once he said it a thousand times, “The soft stuff is the hard stuff,” and 

once we learned that, then we knew we had to focus on the soft things. 

It wasn’t: “Get the pay grade out there.” It was: “Get the performance 

management system right, and everything else would follow.”... I was 

too close to the forest, and Secretary England brought that perspective 

in. He’d run a factory and he knew unions, he knew workforce, and 

he just had the temperament to sometimes tap me on the shoulder 

and say: “Take a break,” and sometimes kick me in the butt and say: 

“Get going on this.” I really appreciated it.56

England’s management of NSPS gave it greater legitimacy throughout the 

department, as the system appeared less like the concoction of a single office 

and more like a broad DoD initiative that had to be taken seriously. The reform 

effort’s standing increased further after England succeeded Wolfowitz, first as 

acting deputy secretary of defense in May 2005, and then as deputy in January 

2006. Chu later stressed that although some personnel officials were upset that 

P&R no longer directed NSPS autonomously, “being Deputy Secretary allowed 

England to drive it forward in a way that my office by itself might not have 

without constantly appealing to the Secretary.”57

Once placed in charge of NSPS implementation, England created a Program 

Executive Office (PEO) that reported directly to him but was staffed by the 

Civilian Personnel Management Service, the agency that had previously led the 

implementation drive. He tasked the PEO with the “responsibility to design, 

develop, assess, and deploy a fully operational NSPS.” On 8 June 2004 England 

appointed Mary Lacey, a mechanical engineer and experienced manager who had 

helped craft a broad pay band 

system at the Naval Surface 

Warfare Center as program 

executive officer of NSPS. 

England picked Lacey because 

of her experience managing the 

department’s largest personnel 

demonstration project, her 

effectiveness at dealing with 

unions, and her enthusiasm for

NSPS. Although Personnel 

and Readiness officials’ feelings 

were “a bit bruised” because 

their implementation drive 

had been halted, the new NSPS 

leadership continued to rely 

on P&R staff to launch NSPS. 

Bradley Bunn, whom Groeber had initially tasked with implementation, became 

deputy to Lacey and served as the bridge between the new NSPS directors and 

the personnel and readiness staff, who continued to provide policy expertise. The 

PEO then started the work of implementing NSPS from scratch.58

Review groups provided the PEO and the Navy secretary with thorough 

explications of every facet of launching an effective system rollout while 

integrating the views of service and OPM officials. Working groups, known as 

integrated product teams (IPTs), examined all aspects of NSPS implementation, 

including labor relations, public relations, and system rollout timelines. Above 

the IPTs, the Overarching Integrated Product Team (OIPT) sifted through the 

IPT reviewers’ findings and briefed Chu and England. Demonstrating that OPM 

would now be treated as a partner, the OIPT was cochaired by Charles Abell 

and George Nesterczuk, the senior OPM advisor to DoD on NSPS, on matters 

Gordon England outlines the processes used to develop the National Security Personnel 

System at a 7 July 2004 town hall meeting in the Pentagon. (U.S. Navy photo by 

Chief Journalist Craig P. Strawser)
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Occasional Papers • Number 1 NSPS

agency found most objectionable, such as the diminution of veterans’ preference. 

An OPM concepts paper released in April 2004 mentioned Homeland Security’s 

Max-HR and NSPS as “‘designer systems’[that] represent the future of our 

civil service, flexible enough to fit an agency’s unique mission and culture, yet 

inextricably connected to one another by the civil service values....” Although 

OPM sought to allow agencies greater flexibility to engineer personnel systems 

best suited for their unique missions, James stressed the need for departments to 

rely on OPM’s stewardship to ensure that the federal government did not become 

balkanized to the point where its leveraging power was jeopardized.61

Like Chu, England initially sought union acceptance of NSPS, meeting and dining 

with labor leaders in hopes of wooing them, while being careful to avoid giving them 

a say in the system’s design. Like Chu, the Navy secretary found them implacable. He 

could not alter labor’s staunch opposition, and meetings between OSD and union 

leaders remained hostile. OSD officials repeatedly stressed the need to break from 

the GS’s rigidities and build a system that reflected 21st-century labor practices, 

technological changes, and the national security imperative for a flexible civilian 

workforce. Union leaders responded that NSPS was a thinly veiled, ideologically 

driven attempt to coerce DoD civilians into reverting to 19th-century conditions. 

England concluded that unions would never relent and later regretted that he had 

not initially excluded union members from NSPS altogether.62

Like OSD, the unions used the strategic pause, which they attributed to their 

own efforts, to reconsider strategy. In a press release, AFGE President John Gage 

triumphantly stressed, “Let us not forget, downplay, or even take for granted 

the fact that DoD’s recent turn of direction is the result of the continuous 

and thunderous outpouring of outrage by federal employees (DoD and other 

agencies), AFGE, and our sister unions since DoD announced its concepts paper 

on February 6th.” In February 2004 36 unions representing Defense Department 

employees had united in opposition to NSPS.63

The unions condemned NSPS before draft regulations had been published. 

Lacey had unintentionally given unions further ammunition by stating that the 

implementation team would “go dark” while drafting regulations. Her purpose 

had been to allow OSD and OPM to agree to regulations before presenting them 

to the unions, as many of the regulations would change through interagency 

negotiation and, she felt, union involvement would only create confusion 

and consternation. The unions, however, accused OSD of sinister secrecy. At 

NSPS had a rather elaborate design process after the strategic pause. Source: 

Image recreated from Patricia Adams’ 21 October 2004 presentation, OSD 

Historical Office Reference Collection.

related to DoD jointly prescribed regulations. The OIPT supported and advised 

both England and the PEO, making design recommendations for England to 

approve. Rather than establish NSPS regulations internally, as Groeber’s team had 

planned, the new implementers opted to publish the rules in the Federal Register 

to bolster the system’s legitimacy. OSD and OPM also collaborated closely in 

constructing new draft regulations and on plans for working with the unions.59

England decided to roll out the system in the same fashion that DoD introduced 

new weapons projects, staggering employee conversions in “spirals.” He later 

reflected, “We piloted, launched it, learned from that spiral, the next spiral, 

incorporated the improvements.... Like you would turn a weapon system to the 

warriors, we would turn a new personnel system to the personnel community.” 

The size of the spirals could then be adjusted based on the successes or flaws 

found in the earlier migrated groups.60

As a consequence of the new approach, OPM officials’ tone changed markedly. 

Working with OPM, DoD dispensed with aspects of the system that the personnel 
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Occasional Papers • Number 1 NSPS

AFGE’s Legislative and Grassroots Mobilization Conference in February 2005 

Gage joined John Sweeney, president of the AFL-CIO, in denouncing the 

system. Gage said, “NSPS will put the squeeze on employees by enabling the 

agency to mess around with pay, work schedules, leave, and evaluations without 

any meaningful appeals rights.” Sweeney added: “The Bush Administration is 

now stepping out way beyond any appropriate flexibility in work rules and into 

radically undermining good pay, decent workplace standards and workers’ rights 

throughout the federal workforces.... We are here to tell the Bush administration 

that the attack on workers’ rights ends here.”64

On 14 February 2005 OSD published the outline of NSPS as draft regulations 

in the Federal Register for public comment, which resulted in a deluge of 

concerns. Over 57,000 citizens made public comments, expressing anxiety over 

the erosion of collective bargaining, the reduction of adverse actions and appeals 

rules, and the enormous power the system would 

give managers.66 Although unions disagreed 

over specific objections, they united in overall 

opposition to the system. Simultaneous with the 

draft’s publication, the AFGE sent a message to its 

members entitled, “The Valentine’s Day Slaughter 

of DoD Civilians,” which claimed that NSPS 

would give supervisors the arbitrary power to fire 

or relocate civilians and promised that the unions 

would “engage in what will become the biggest 

grassroots mobilizations of American workers ever 

seen.” The United Defense Workers Coalition 

(UDWC) objected to the proposed system 

“in its entirety” and recommended against its 

implementation unless it was completely revised. 

The coalition stated that DoD officials had refused compromise and rejected the 

coalition’s offer to create a system with components ensuring that employees’ pay 

remained comparable to the private sector. Moreover, the UDWC stated that 

DoD refused to negotiate over linking fixed percentages to performance levels, or 

for guaranteeing collective bargaining for employees belonging to unions once the 

system was in place. Moreover, the coalition questioned the pay-for-performance 

system and the pay pools, arguing that they gave managers “excessive power to 

manipulate ratings and payout decisions”; that performance appraisals “notoriously” 

failed to evaluate performance accurately; and that the pay pool system, in which an 

additional layer of supervisors reviewed whether managers’ performance evaluations 

fairly determined pay, merely compounded the unfairness of the entire system. 

They objected to the “concept and legality of pay pool panels and pay pool 

managers with authority to manipulate the system.” Moreover, the UDWC 

argued that DoD had failed to explain adequately how employee reassignment 

or promotion would affect pay, did not provide clearly defined performance 

measures, diminished the employee appeals process, provided the secretary 

with arbitrary power to institute force reductions, and unlawfully degraded the 

collective bargaining powers of unions.67

Just before the UDWC submitted its condemnation, the Senate held hearings 

on the proposed regulations. Abell and Nesterczuk both argued that the system 

neither infringed on employee rights nor on veterans’ preference. Gage countered 

by stressing that by not allowing performance evaluations to be subjected to 

the union’s negotiated grievance and arbitration process, the new system would 

allow political cronyism and personal favoritism. Moreover, he argued, the 

weight performance evaluations given in NSPS would lessen veterans’ preference 

in retention decisions. He said that performance incentive tools existed in the 

GS system but were underutilized because of perennial budget constraints. He 

cited scholarship by Jeffrey Pfeffer to argue that that pay-for-performance did not 

measurably improve performance, consumed managerial resources, and caused 

most workers to lose pay and become increasingly discontented.68

In response to union comments, DoD adjusted aspects of its pay-for-performance 

system before DoD and OPM announced the submission of the final regulations 

to the Federal Register on 26 October 2005. DoD changed the system regulations 

to mandate that supervisors provide employees with performance expectations in 

writing, establish a 6 percent minimum pay increase for promotions, and permit 

bargaining unit employees to use negotiated grievance procedures to challenge 

performance ratings. It also limited the number of times DoD could reduce an 

employee’s pay because of misconduct or poor performance to once per year.69

Despite DoD adjustments in response to public comments, the unions continued 

to criticize the system and used legal means to attempt to block implementation. 

AFGE filed suit against DoD (AFGE v. Rumsfeld) on 7 November 2005, causing 

DoD to further postpone implementation. The lawsuit accused DoD of a “failure 

to abide by the requirements of 5 U.S.C. § 9902(m)(3) in developing a labor 

relations system for the Department of Defense” and of establishing “a DoD 

“To me, with my Navy background, 

going dark is a term that means you 

are going silent. There is a period 

that a submarine goes down. It goes 

dark. Runs dark, runs deep. It is 

quiet. We had gotten all the input we 

were going to get from the unions. 

We had gotten lots of input, and it 

was time to sit down and write the 

draft regulations.” 

Mary Lacey, 16 January 2009 

interview  65
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Occasional Papers • Number 1 NSPS

labor relations system and employee appeals process that are contrary to law.” The 

U.S. District Court for the District of Columbia decided on 27 February 2006 

in AFGE’s favor on collective bargaining, the National Security Labor Relations 

Board, and adverse action appeals. The court ordered DoD to freeze NSPS labor 

relations regulation and employee appeals procedures but allowed nonbargaining 

employees in Spiral 1.1, the first group selected by OSD, to migrate into the 

system. The unions continued to object to the system as DoD appealed the district 

court ruling and proceeded to 

implement NSPS’s performance 

management, compensation 

and classification, and 

workforce-shaping provisions 

for Spiral 1. DoD appealed 

to the U.S. Court of Appeals, 

which, citing the law’s sunset 

provision, overturned the 

district court’s ruling. The U.S. 

Supreme Court refused AFGE’s 

filing of a writ of certiorari,

which would have resulted in a 

Supreme Court Review of the 

U.S. Court of Appeals decision. 

Despite this legal victory, on 

17 September 2007 DoD announced it would move ahead with NSPS human 

resources regulation for nonbargaining unit employees only.70

The strategic pause proved highly consequential. OSD had perhaps avoided a 

total debacle by postponing implementation and gained a powerful advocate in 

Gordon England. Yet the delay allowed union opposition to crystalize, resulting in 

a later rollout at a much slower pace than the architects had originally envisioned 

and giving the unions time to coordinate strategy for mounting a sustained attack 

on the system. Moreover, renewed efforts to reach out to unions failed, and union 

leaders simply viewed DoD’s pause as an indication that their opposition had 

been effective. It had, after all, been the substance of NSPS proposed changes—

not merely OSD officials’ tone—that had provoked the unions. 

Implementation

It was not until spring 2006 that OSD finally began rolling out the most 

significant personnel change since the Civil Service Reform Act, but they did so 

on a far smaller scale than initially anticipated. England gave Lacey great leeway. 

Rather than require that she constantly seek his approval, he stressed that she 

should use her best judgment while keeping him informed and allowing him to 

give her “high cover” when needed. He told Lacey that implementation should 

be “event-driven” rather than “time-driven.” Instead of requiring conversion to 

follow arbitrary deadlines, progress 

would follow capability. Earlier, 

on 15 December 2004, England 

had stated that DoD would begin 

converting 300,000 employees 

into NSPS as early as July 2005, 

with 60,000 personnel migrated in 

the first phase. Yet as a consequence 

of rollout preparedness difficulties 

and union legal challenges, just 

11,000 employees were included in 

the 30 April rollout of Spiral 1.1.71

Lacey anticipated that early spiral 

success would convince those 

slated for later migration that NSPS was better than the old system. The system’s 

architects hoped that eventually even some union members would clamor for 

admission after hearing of migrated employees’ satisfaction. However, they 

also predicted that it would take years for those in the early spirals to become 

satisfied with NSPS as managers learned their new evaluation responsibilities and 

employees adapted to new performance expectations. To achieve early success, the 

PEO selected for the first group managers who most enthusiastically supported 

change and whose organizations were best prepared to adapt to a new pay-forperformance system, but implementers, Sharon Seymour recalled, also “twisted 

some arms” when employees were not so enthusiastic.Many who had their arms 

twisted were human resources personnel.72

OSD officials later gave Spiral 1.1 implementation mixed reviews, and early 

failures damaged managers’ and employees’ perceptions of NSPS. Bradley Bunn 

England and Chu meet with media members to outline NSPS implementation 

plans on 14 April 2004. (U.S. Navy photo by Chief Journalist Craig P. Strawser)

Gordon England and Acting Director of the Office of Personnel Management Dan 

Blair at a joint press conference on 10 February 2005. England strove to work more 

closely with OPM. (U.S. Navy photo by Chief Journalist Craig P. Strawser)
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Occasional Papers • Number 1 NSPS

later bemoaned early information technology (IT) problems, remembering the 

rollout as “a perfect storm of things devastating in the damage it really caused.” 

He admitted, “We over-engineered the system.” 

Early system glitches frustrated managers and 

employees alike, causing lasting damage to the 

system’s repute. Participants found the process 

of establishing annual work objectives excessively 

cumbersome, as employees and managers would 

“ping pong” objectives back and forth. Even 

relatively simple issues such as setting passwords 

proved overly complex. Reflecting later on the 

early Performance Appraisal Application (PAA) 

rollout, Mary Lacey remembered thinking: “Oh 

my God. This is so bad.” Michael Dominguez, 

Charlie Abell’s successor as principal deputy 

under secretary for personnel and readiness, 

acknowledged the early IT problems but, 

nonetheless, called the system rollout a “case 

study in how to do it right.” He credited the 

service secretaries’ and England’s leadership 

as well as the handpicked conversion group’s 

talent and enthusiasm for overcoming early IT 

obstacles. He recalled that the group “bowled through” the “broken” performance 

management and evaluation IT system.73

System Mechanics 

Where implemented, NSPS substituted pay bands for the 15-grade GS pay 

system. Ideally, managers could use pay band flexibility to pay qualified hires 

at more appropriate levels than their GS counterparts. Equally important, 

performance bonuses and pay raises would be based on pay pools—numerically 

limited groups of similar employees—which would ensure fiscal discipline and 

discourage evaluation inflation. The funds for a given pay pool were equal to 

the amount of money that would have been allocated under the old system to 

near-automatic step increases within a grade, annual pay raises, quality step 

increases, and bonuses. By tying all this money more closely to performance, the 

rewards were greater for those employees deemed to be the best, while lowerrated personnel saw their pay increase much more slowly than it would have 

under the GS system. To successfully implement NSPS, OSD had to shift the 

department’s understanding of fairness. As Stephen Kreiser, a Department of 

the Army civilian, argued, the success of NSPS rested with managers’ ability 

to shift the culture from one prizing consistency to one rewarding individual 

performance, emphasizing that “it is not fair to treat everyone as equals.”75

The system divided employees into four career groups: Standard Career Group; 

Investigative and Protective Services Career Group; Scientific and Engineering 

Career Group; and Medical Career Group. It further divided each career group 

into four pay schedules: Professional/Analytical; Technician/Support; Supervisor/

Manager; and Student. Each 

pay schedule had from one 

to four pay bands, with most 

schedules containing three: 

Expert, Journey, and Entry/

Development. Regardless of 

career group, most NSPS 

employees belonged to the 

second pay band, which 

collapsed numerous GS 

grades. On 30 April 2009, 

68.5 percent of the NSPS 

workforce belonged to 

NSPS Pay Band 2 (PB2).76

Starting salaries for new 

hires depended on the 

career group. Professional 

employees, for example, earned significantly higher entry-level pay than 

Technician/Support employees.77

The system allowed for alternative forms of competition in order to, according 

to a manual given to employees to help them understand the system, “minimize 

paperwork while filling the position with the right person at the right time.” 

For instance, a manager could select a subordinate for an “exceptional 

performance promotion,” without that employee applying for a position in the 

same occupational code, or specific position type, if he or she had received the 

“Well, theoretically I should have 

had a lot of leeway because they 

were supposed to be working for me. 

I was the customer, but the truth of 

the matter was that generally they 

did not listen a whole lot to what I 

had to say. It was the way they were 

going to do it. It was very frustrating. I actually even brought in a systems engineer to be my person that 

was going to oversee the work, and 

they effectively would ignore him. 

The problem with the first version 

was it just was not user-friendly, and 

they made no attempt to really make 

it user-friendly.” 

Bradley Bunn, 12 September 2008 

interview 74

On 28 April 2006, England signed the document authorizing the first group of employees, 

Spiral 1.1, to be moved into NSPS. This launch came far later and was much smaller than 

the architects had initially planned. (DoD Photo by R. D. Ward)
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Occasional Papers • Number 1 NSPS

highest performance rating in their most recent performance appraisals, and if 

the manager considered other candidates with the same performance scores. A 

manager could also use “alternate certification” to request an employee by name. 

A job offer could be made after the human resources office determined that the 

skills of the candidate named by the manager met the position’s qualifications. 

NSPS allowed the components to establish boards to recommend and evaluate 

candidates for vacant positions. Managers could thus fill a position without 

advertising a vacancy.78

The system architects sought to give managers and, to a lesser extent, employees 

greater pay and reassignment flexibility while increasing the level of interaction 

between supervisors and employees. In the GS system, managers often cannot 

change job duties without reclassifying a position, but a supervisor in NSPS 

could simply assign new tasks to employees within the same pay band. If DoD 

management directed reassignments, an employee could receive up to a 5 percent 

base pay increase for each reassignment. As in the GS, NSPS employees’ evaluation 

periods spanned the fiscal year. At the annual review, supervisors provided 

employees with narrative evaluations that they converted into numeric scores 

on a five-point scale (1: Unacceptable, 2: Fair, 3: Valued Performer, 4: Exceeds 

Expectations, 5: Role Model). In determining scores, supervisors considered 

“contributing factors” for each evaluation criteria. Such factors included critical 

thinking, cooperation and teamwork, communication, resource management, 

customer focus, technical proficiency, and leadership. The manager could increase 

or decrease individual overall scores by one point on the basis of contributing 

factors. Employees had to attain an overall score of at least three to be eligible 

for a performance-based pay increase but would automatically receive an overall 

score of one if they received a one for any performance objectives.

Managers could issue corrective actions to underperforming subordinates. Such 

actions included remedial training, an improvement period, a reassignment, an 

oral or written warning, a letter of counseling, a written reprimand, and other 

adverse actions. Under NSPS, employees could have their base salaries decreased 

because of an adverse action by a maximum of 10 percent per year. Such a pay 

reduction could only occur once in a 12-month period.79

Employees could write requests for rating reconsideration to pool managers 

within 10 days of receiving their assessments. The pay pool manager had 15 days 

after receipt of the appeal to respond with a written explanation of his or her 

determination. If employees remained dissatisfied, they could submit requests, 

within five days of receiving the pay pool manager review, to the Performance 

Review Authority, which supervised pay pools across the department to 

maintain evaluation consistency. Workers belonging to bargaining units could 

 Source: 2010 Status of Forces Survey of DoD Civilian Employees Source: 2008 Status of Forces Survey of DoD Civilian Employees

Managers’ and Supervisors’ Views of NSPS, 2010

“You have the tools, training, and information you need to make

pay decisions under NSPS”

45% 32% 23%

Agree Neither agree nor disagree Disagree Agree Neither agree nor disagree Disagree

Employee Views of NSPS, May 2009

“The use of Contributing Factors affects my approach to accomplishing my job objectives”

39% 35% 25%

“The 5-level NSPS performance rating scale provides meaningful performance differentiation”

30% 36% 34%

“The pay pool panel helps ensure that the performance rating and payout process is equitable”

27% 39% 34%
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Occasional Papers • Number 1 NSPS

that those employees who received the highest or lowest ratings truly deserved 

them. The panel could and often did send evaluations back to a manager to be 

rewritten or reranked. A pay pool manager made final decisions based on the 

panel’s recommendations.83

Source: 2008 Status of Forces Survey of DoD Civilian Employees

Although NSPS banned evaluation quotas, the system was designed to be cost 

neutral. Since only a small portion of employees could be given the highest 

ratings for the system to remain fiscally sound, the pay pools were set at a fixed 

amount. Unlike in the GS system, an employee’s pay raise would be determined 

by both the number of shares of the overall pay pool funds that a manager had at 

his or her disposal and the value of each share. 

Since the number of shares would be divided by the fixed pay pool total, those 

pools with a high proportion of top-rated employees would receive shares with 

lesser value than those received by top employees in pay pools with a higher 

percentage of employees receiving lower ratings. The system sought to offset this 

phenomenon by creating a discretionary Organizational or Team Achievement 

Recognition Payout to boost base pay and/or bonuses in an entire pay pool in 

addition to individual increases. Advocates of the system claimed this rewarded 

top performers rather than prizing average performers. The portion of the pay 

increases allotted to bonuses versus base salary increases varied according to 

file grievances through the department’s negotiated grievance procedure. In 

comparison with the GS system, NSPS significantly curtailed the effectiveness 

of employees’ appeals against adverse actions by allowing DoD to modify the 

rulings of administrative judges on the Merit Systems Protection Board.80

Unfortunately for the implementers, the evaluation and payout process proved 

riddled with problems. In its review of the January 2008 payout, GAO, which 

was itself under a pay-for-performance system, found that managers were told to 

rate most employees at level three (“Valued Performer”).81 Most managers were 

hesitant to rate employees at the levels one or two, because low ratings required 

extra paperwork to justify; the pay pools could revise the initial performance 

appraisal if the documentation was not convincing and thorough. The ability 

of the pay pools to revise managers’ ratings made both managers and employees 

afraid that poorly written documentation would affect employee payouts. 

Indeed, one pay pool panel member told internal reviewers that writing quality 

was a factor:

The eloquence of the writing is important. You need to focus [the] 

reader into what you want to see. The big thing is the “so what”—

what did that contribute, what did it advance; what was the impact? 

It’s not just what you did. There is a perception that this is a writing 

competition, but that is wrong. That said, it is also not entirely 

objective.

One discussion group told GAO examiners that, because of the extensive detail 

demanded in these discursive evaluations, it took an average of four hours to 

evaluate each employee.82

As with any new major personnel reform, system success ultimately depended 

upon managers evaluating employees fairly and competently, and supervisors 

were themselves assessed based on their performance management effectiveness. 

Temporary faults would appear whenever managers favored certain employees 

over others for nonwork reasons or when administrators gave all employees 

equally high evaluation scores, thereby forcing the pay pool panels to adjust 

numerous employee ratings. To ensure individual evaluations were fair and 

also to avoid across-the-board inflation, a panel of senior managers reviewed all 

evaluations in each pay pool. The pay pool panel compared all evaluations with 

the goal of ensuring that different managers were applying similar standards, and 

Useful Neither useful nor useless Useless

NSPS Employee Views on Rating Outcomes

“How useful was the information provided about rating outcomes in your pay pool?”

35% 42% 23%

“How useful was the information provided about rating outcomes in your pay pool?”

32% 36% 32%

2008 Survey

2010 Survey
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Occasional Papers • Number 1 NSPS

created suspicion and distrust. The system’s architects and managers were never 

able to put these concerns to rest.85

Moreover, although most workers ranked as “valued performers” under the 

new system, demographic data indicated slight but important racial disparities 

in performance ratings and pay increases. A 2008 Congressional Budget Office 

review of NSPS found that the average performance rating given in that year was 

3.45 on a five-point scale, pay increases averaged 3.46 percent, and the average 

bonus award was 1.77 percent. The average rating for white employees (3.5) 

was higher than the averages for black (3.30), Hispanic (3.38), and Asian (3.36) 

employees, and white employees also received higher percentages of incomes for

Source: Performance Payouts, 5 C.F.R. § 9901.342 (1 January 2008) 

total payouts. The unions would point to white employees’ higher ratings and 

payouts as further evidence of the system’s inherent inequity and inadequacy.86

The architects thought several years of further training and acculturation would correct 

early problems, as supervisors came to better understand the consequences of failing 

to evaluate employees competently and fairly. They expected that managers would 

gradually adapt to new evaluation responsibilities and learn to better explain how poor 

performing employees could improve. Meanwhile, employees would improve their 

understanding of the standards that determined their pay and bonuses.87

However, survey results from Spiral 1.1 employees, the NSPS vanguard, provide 

a revealing depiction of growing disillusionment among those with the most time 

in the system. Just six months into implementation, DoD surveys revealed a spike 

numerous factors, such as the type of work performed, the compensation increase 

distribution in comparable labor markets, and the proximity of an employee’s base 

pay to the pay band’s upper limit. If an employee reached the pay band’s maximum 

base salary, bonus pay would constitute the entirety of performance-based pay.84

The system’s architects had created the pay pools to ensure evaluation and payout 

consistency, but instead, paradoxically, they raised fairness and efficiency concerns. 

To achieve evaluation flexibility across a diverse organization, NSPS operated a 

total of 1,600 pay pools. Yet the attempt to ensure flexibility sometimes resulted in 

different payouts for similar accomplishments. To lessen the chances of unfairness, 

senior leaders spent substantial time away from their normal functions to serve 

as pay pool panelists to appraise supervisors’ evaluations. One pay pool manager 

told internal NSPS reviewers: “I spent two weeks with the sub-pay pool. This is 

undoable in the long term. It needs to be more efficient. We are going through 

each appraisal line by line and analyzing it.” After receiving rating changes from 

pay pools, managers felt they received inadequate explanations, which further 

complicated management-employee rapport as supervisors struggled to explain 

why the employee received a lower than expected evaluation. Many supervisors 

and employees did not understand how the pay pool process worked, which 

Source: CBO, A Review of the Department of Defense’s National Security Personnel System (November 2008) 

Performance Rating Scale and Associated Rewards in the

National Security Personnel System

_______________________________________________________________ 

Performance Rating “Shares” Standard Salary Adjustments Received Received _______________________________________________________________

5 - Role Model 5 to 6 Performance-based pay increase

4 - Exceeds Expectations 3 to 4 Rate range adjustments

3 - Valued Performer 1 to 2 Local market supplement increases

Rate range adjustments 2 - Fair 0 Local market supplement increases

1 - Unacceptable 0 No increases How Shares Determined Base Pay

Pay Pool Fund($) Share Value(%) = ________________________________________________________

Σ (base salary of each pool member × shares assigned each pool member)

 Employee Performance Payout = Base Salary × Shares × Share Value
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Occasional Papers • Number 1 NSPS

in employee dissatisfaction. The portion of Spiral 1.1 employees who believed the 

system would negatively affect DoD personnel practices rose from 25 percent in 

May 2006 to 42 percent in November 2006. Discontent only grew from there. By 

February 2008 just 22 percent of employees thought the system would improve 

the department and half concluded that the system was harmful to DoD.88

Pay increase as a percentage of base pay, including bonus awards. If left unchecked, base pay increase disparities would have 

resulted in major pay disparities for minorities. Source: CBO, A Review of the Department of Defense’s National Security 

Personnel System (November 2008)

Although the early technology problems tarnished NSPS’s reputation, managers 

and employees pointed to problems less tangible than IT user-unfriendliness. The 

system’s architects found it difficult to craft effective evaluation criteria that both 

managers and employees understood and judged fair. Managers also reported 

frustration with excessive evaluation requirements, meetings, and training. Some 

directors received less money for employee performance raises and bonuses than 

others, which damaged managerial and employee morale. Employees complained 

that managerial favoritism and even racial and gender attitudes played greater roles 

than actual performance in determining pay. Ironically, a system meant to lessen 

the bureaucratic morass and create greater fairness seemed more bureaucratic to 

some managers and less fair to many employees.89

The system’s reputation might have recovered had the evaluation and pay pool 

review process been more streamlined and transparent. Bunn later acknowledged 

that he would have implemented aspects of the pay pool process differently and 

would have focused more on preparing managers for their new NSPS evaluation 

responsibilities. He faced a difficult challenge, however. Many civil servants’ 

notions about fairness had been formed by long careers in the GS system, where 

seniority carried great weight and technical competency sometimes mattered 

more than leadership potential for promotion to managerial positions. Moreover, 

Average Pay Increase for NSPS Employees by 

Race/Ethnicity, 2008

5.6%

5.4%

5.2%

5.0%

4.8%

4.6%

4.4%

4.2%

4.0%

Total Payout (as a Percentage of Base Pay) under NSPS

White Hispanic Other Black Asian

All NSPS Employees

Percentage of Employees with Positive View of NSPS

Impact on ...

0% 5% 10% 15% 20% 25% 30% 35% 40%

% of non-NSPS employees who foresaw

improvement

% of NSPS employees who saw 

improvement

Hiring new employees

Disciplining/correcting poor work 

performance

Rewarding good work 

performance

Linking pay to performance

Classification of jobs by series and 

pay grade/pay band

Communication between 

supervisors and employees

Ensuring individual performance 

supports organizational mission 

effectiveness

Source: 2007 Status of Forces Survey of DoD Civilian Employees 
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Occasional Papers • Number 1 NSPS

worse than the General Schedule. The unions emphasized the system’s flaws and 

mounted a legal and political attack that would ultimately doom NSPS.90

System Collapse 

Following the 2006 midterm elections, in which the Democrats gained control 

of both the House and Senate, Rumsfeld resigned. Believing Rumsfeld’s exit 

portended the end of NSPS, the AFGE rejoiced. The UDWC called for the complete abolishment of the “Donald Rumsfeld Personnel System” that was “based 

on bad science” and “contaminated” by the former secretary. The new Congress 

began dismantling parts of the system. The National Defense Authorization Act 

for fiscal year 2008 reduced pay scale flexibility and removed the adverse actions, 

labor relations, and appeals aspects of NSPS. Moreover, members of Congress 

from districts with heavy concentrations of defense civilians increasingly 

expressed outrage with the system’s performance-based raises. In a letter to the 

new secretary of defense, Robert Gates, three representatives from Northern 

Virginia, Tom Davis (R–VA), Frank Wolf (R–VA), and James Moran (D–VA), 

stated their anger over 110,000 NSPS employees receiving less than 50 percent 

of the annual GS pay increase. Top performers were making more than they 

did under the GS system, but to prevent labor costs from mushrooming, NSPS 

pay pool managers had lessened salary increases for average and above average 

performers and cut them altogether for underperformers. Those accustomed to 

higher routine raises were angered by the change.91

Opponents of NSPS viewed the 2008 presidential election as pivotal and were 

hopeful that Democratic candidate Barack Obama would abolish the system 

if elected. Obama gave opponents of NSPS reason to hope. He wrote to John 

Gage that he found it “inappropriate and unwise for DoD to implement such 

a highly contentious, ill-conceived program so late in this administration, 

particularly following the vast revisions to the program included in the FY 

08 National Defense Authorization Act.” He stated his concern about race, 

gender, and age bias and said that he would “substantially revise these NSPS 

regulations, and strongly consider a complete repeal.” On 10 September 2008 

House Armed Services Committee Chairman Ike Skelton (D–MO) and Senate 

Armed Services Committee Chairman Carl Levin (D–MI) asked England 

not to finalize new NSPS rules before a new administration could review the 

system. They also expressed concern that certain regulations would violate 

although NSPS made many changes, it had not abandoned the rigid insistence on 

evaluation consistency, or addressed its own flawed mechanisms for ensuring it. In 

essence, rather than managers gaining greater flexibility and autonomy to reward 

high-performing employees and punish underperformers, supervisors found that 

opaque pay pool panels might scrutinize every word of their evaluations, and 

even overturn them, thereby damaging employees’ trust in their managers. The 

attempt by the NSPS architects to prevent managerial favoritism through uniform 

standards created new bureaucratic mire and caused many to see the system as 

Positive Neither positive nor negative Negative

Shifting Views of NSPS: 2007 and 2010 Employee Surveys

“Overall what type of impact will NSPS have on personnel practices in the DoD?”

25% 38% 36%

“Overall what type of impact do you think NSPS has had on personnel practices in the DoD?”

17% 32% 51%

2007 Survey

2010 Survey

Better Neither better nor worse Worse

Views of Employees and Supervisors

“Compared with previous personnel system, NSPS is ...”

29% 29% 42%

2010 Survey

Source: 2010 Status of Forces Survey of DoD Civilian Employees
44 45

Occasional Papers • Number 1 NSPS

Congress’ intent to restore collective bargaining rates to DoD employees. 

England responded by stating that DoD would finalize the NSPS regulations 

to bring policy stability to a system that then included 183,000 DoD civilians. 

Moreover, he stressed that only nonbargaining employees had been and would 

be converted into the system, and DoD “only forecasted roughly 200,000 in 

the system over the next year.”92

On 20 January 2009 President Obama froze all pending programs from the last 

administration. Because NSPS’s final regulations, which had been published in 

the Federal Register four days before, had not yet gone into effect, DoD could not 

further expand the system. Yet the new administration did not immediately seek 

to end NSPS. Bunn, who had replaced Mary Lacey as program executive, later 

recalled that the new political appointees wanted to understand the system and 

how to make it work more effectively.93

On 16 March the new deputy secretary of defense, William Lynn, announced a 

system review and a pause in new NSPS conversions pending a determination 

of whether NSPS was “fair, transparent, and effective.” The system covered 

205,000 Defense Department civilians when the review began. Prior to the 

announcement, Gage met with Lynn and told him that the system should be 

terminated. The PEO shifted from expanding implementation to responding to 

reviewers and congressional requests.94

On 14 May, Lynn and OPM Director John Berry asked the Defense Business 

Board, an independent federal advisory committee, to establish an NSPS review 

task group to examine whether the system fairly, effectively, and transparently 

achieved its original goals. Former Deputy Secretary of Defense Rudy de Leon 

served as chair, and the group heard from a wide range of participants and 

stakeholders unhappy with the system.95 Gage, for example, made his feelings 

about the NSPS clear in his statement to the AFGE: “NSPS is a tainted, 

fatally flawed system, created in a poisonous atmosphere by ideologues seeking 

to destroy collective bargaining, federal unions and employee rights and 

protections.... Despite its short existence, unlawful discriminatory practices are 

already coming to light. NSPS must be killed. No amount of rehabilitation can 

make it acceptable or workable.”96 

De Leon’s task group found numerous fundamental flaws in NSPS and recommended 

a complete “reconstruction.” The evaluators based conclusions on the 2008 NSPS 

Evaluation Report commissioned by the NSPS PEO in May 2009, public comments 

about the system, interviews of NSPS administrators and employees, interviews of 

members of the United Defense Workers Coalition, GAO reports, and meetings 

with experts. The reviewers concluded that DoD sought to do too much, too 

quickly, without the requisite infrastructure for pay-for-performance to operate 

successfully or the support of managers, employees, and unions. Consequently, 

the system destroyed trust among managers and employees, burdened supervisors 

with time-consuming evaluation duties, used software that confused managers 

and employees alike, created an overly broad Pay Band 2 that caused career 

rank disarray, developed unequal pay pools that fostered ill will, and shattered 

relations between DoD and unions. The group recommended reforming rather 

than eliminating NSPS and using lessons from NSPS to change the GS system, 

replacing GS grades with pay bands smaller than those in NSPS to give the GS 

system greater hiring flexibility.97

Despite administration officials concerns about NSPS, they still wanted to reform the 

performance management system in DoD and throughout the government. In June 

2009 OPM Director John Berry said that “the current federal pay system “is straining 

and ... balkanized to the point that it risks failure” and recommended a governmentwide performance management system, one that improves hiring and “weeds out the 

dead wood.” He hoped to work with unions and use the White House’s political 

clout to usher in reforms. Yet administration officials avoided use of the words “pay 

for performance,” as the label had become anathema to unions and congressional 

Democrats and synonymous with the previous administration. Instead he called for 

a “fair performance-appraisal system.” Berry even stressed to an AFGE convention: 

“I didn’t say ‘pay for performance’ ... that [new proposal] is not NSPS, not NSPS.” 

Gage was not convinced, stating, “We’ve got to kill the underlying concept” of pay 

for performance and cautioned, “even our friends who may be taken in by the phrase 

must feel our wrath.” He warned that if any new personnel management reform 

effort “smells of pay for performance ... this union will go nuclear.” The NSPS Task 

Group’s recommendations to reform but keep NSPS infuriated Gage, who wrote 

that the reviewers had “miscalculated the intensity of hatred toward this system and 

its name—‘NSPS’.... We wonder why DoD isn’t holding those responsible for NSPS 

accountable and terminating them for this colossal failure.”98

Outside observers noted serious system flaws but recommended correcting them 

rather than abolishing NSPS. The Federal Times found that NSPS successfully 

addressed gender discrepancies in the ratings that appeared early on and stressed: 
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Occasional Papers • Number 1 NSPS

“Don’t confuse ‘reason for concern’ with ‘reason for cancellation.’ Federal unions 

would argue the system should be scrapped. Far from it—the answer is certainly 

not to return to a General Schedule system that rewards slackers at the expense 

of the nation’s most productive employees.”99

After the administration ordered a system review, union leaders mounted 

a vigorous public defense of the GS system, arguing that despite the system’s 

flaws, it outperformed NSPS. In July 2009 National Treasury Employees Union 

President Colleen M. Kelley told an Excellence in Government conference at the 

Ronald Reagan Building: “It is a system that is fair. It is understandable.... It is 

transparent.” Gage claimed, “You can be very creative in the GS system,” and 

urged officials to make better use of the performance rewards available. At the 

conference, OPM Director John Berry stressed the need for internal reform and 

harangued politicians who denigrated civil servants for political gain.100

On 7 October 2009 the House-Senate NDAA Committee report, going against 

the task group’s recommendations, called for NSPS’s complete dissolution and 

the transfer of all NSPS employees out of the system by 1 January 2012. President 

Obama signed the NDAA on 28 October. The system’s termination moved over 

200,000 NSPS personnel back into the GS and other systems. When Congress 

ended the system, just 10,000 employees had received three NSPS performancebased payouts while 70,000 had experienced only one round. Union leaders 

celebrated the repeal. William Dougan, president of the National Federation of 

Federal Employees, declared that the eradication of the NSPS “cancer” would help 

heal management and labor wounds remaining from the past administration.101

In January 2010 the NSPS PEO became the NSPS Transition Office, and many 

of those responsible for implementing NSPS began orchestrating the system’s 

dissolution. Lynn selected John James Jr., an experienced senior executive who served 

as executive director, logistics, maintenance, and industrial operations at Naval Sea 

Systems Command, to head the transition office (which reported to the deputy 

under secretary of defense for civilian personnel policy). The department began 

moving employees from NSPS positions to corresponding GS grades and steps. 102

Although Congress mandated that no employee lose pay because of the transition, 

some employees who had benefited from NSPS were angered over their conversion 

to the GS system. Employees earning pay between two GS steps received the pay 

of the higher step. However, while those who received higher pay under NSPS 

than the corresponding GS grade allowed would continue to receive the higher 

NSPS pay, these employees would receive only half of the annual pay increase 

until the rate of step 10 in their grade again matched their NSPS-enhanced 

salary. Thus some high-performing employees who had advanced under NSPS 

felt punished by their return to the General Schedule, since they would have 

lower future pay raises than the average employee.103

The tight deadline created another issue. By 9 June 2010 over 53,000 Defense 

civilians had moved out of NSPS. An additional 165,000 employees transferred 

by 6 October 2010.104 The reconversion’s speed overwhelmed some offices, leading 

human resources departments to improperly downgrade some employees, which 

resulted in lawsuits.105

Despite NSPS’s termination, many administration officials remained convinced 

that the General Schedule needed an overhaul. In November 2009 John Berry 

lauded the GS system’s principle of equal pay for equal work, but warned 

that when it “prevents managers from adapting their job responsibilities to 

the ever shifting responsibilities of their departments, it becomes a millstone. 

Classification today has become so stilted, and our HR staffers have become so 

used to manipulating it, that in the words of one of them, ‘a good classifier could 

make a Dixie cup a GS-14.’” AFGE staunchly disagreed with this assessment, as 

their vice president, Joseph Flynn, made clear before the House Armed Services 

Committee: “Despite much rhetoric to the contrary, the General Schedule pay 

system is simple, transparent, flexible, and particularly adept at rewarding high 

performance among employees when proper funding is available. Within-grade 

step increases, quality step increases, and individual performance bonuses are all 

designed to promote individual excellence.”106

The NSPS architects and implementers later lamented their system’s collapse. 

Groeber viewed NSPS as a case study of how difficult it is to enact good 

ideas in government. She believed that bureaucratic politics stifled innovation 

because too many compromises were required to enact such designs. She found 

the strategic pause unnecessary, felt the second push to implement NSPS had 

ceded too much authority to OPM, and that it moved too slowly. Charlie Abell 

thought the strategic pause had been necessary to prevent Congress and the 

unions from killing the system but regretted that even the readjustments had 

failed to salvage it. Nevertheless, he believed the system could have survived had 

the Obama administration done more to prevent Congress from abolishing it. 
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Occasional Papers • Number 1 NSPS

Bunn concluded that while he wished he had done more to prepare managers for 

their new responsibilities and done a better job designing the pay pool process, he 

was convinced that revisions to civilian personnel management should take place 

across the government and needed broad bipartisan congressional support. OSD 

was simply not equipped to produce, implement, and defend a major alternative 

to the General Schedule.107

Other reviewers concluded that the combination of design flaws, implementation 

setbacks, union legal attacks, and Democratic electoral victories in 2006 and 2008 

doomed the system. Howard Risher, a pay and performance consultant, found 

greatest fault with the pay pool process: 

The pay pools violated one of the primary tenets of salary management—

employees need to know what they can expect. According to reports, 

immediate supervisors had no control and were unable to explain how 

an increase was determined. The pay pool process was far more timeconsuming than industry would ever tolerate.

Robert Tobias, who had served on the Defense Business Board task force that had 

reviewed NSPS, faulted the “one-size-fits-all” nature of the system. He argued that 

DoD’s attempt to impose one performance management system over such a large 

and diverse workforce inevitably led to a disconnect between first-line managers and 

NSPS’s overarching goals. Nevertheless, many reviewers have expressed dismay that 

rather than seek to learn from NSPS and reform the General Schedule, little has 

been done to improve the flexibility of the current system.108

Conclusion

NSPS collapsed for several reasons. After the September 11 attacks, congressional 

openness to changes justified in national security terms allowed OSD to drive the 

system through Congress. Rapid implementation theoretically would have given 

the administration more time to shift the DoD’s culture to accepting pay-forperformance and to correct early flaws. However, the first implementers sought to do 

too much without the requisite infrastructure or widespread acceptance across DoD 

and the administration. By spring 2004 Secretary of the Navy Gordon England 

had convinced Rumsfeld that the system would collapse if rolled out as Groeber’s 

team intended. He mounted a salvage campaign to ensure the system would receive 

sufficient support and DoD would be prepared adequately for a successful launch. 

Yet valuable time had been lost and it would not be until April 2006 that the 

first employees migrated into the system. The unions had successfully unified in 

opposition and would help precipitate the system failure that England warned 

against in 2004. By summer 2006 violence in Iraq escalated, public approval 

for the Bush administration was plummeting, and the top leadership’s attention 

became focused heavily on combating the rising insurgency. Rumsfeld resigned 

in November 2006 after Democrats swept the midterm congressional elections. 

The political climate favorable to NSPS had vanished. In such an environment, 

the early IT glitches, the excessive time managers had to devote to evaluation 

responsibilities, and the inability to quickly change civilian attitudes to favor 

pay-for-performance raises and bonuses all appeared symptoms of an unsound 

scheme rather than mere setbacks to be overcome. President Obama’s election in 

November 2008 and his subsequent freezing of the NSPS rollout made it even 

less likely that DoD could fix the system. 

The Department of Defense civilian workforce was at once too big and too small 

for NSPS to work. When dealing with the byzantine evaluation, pay pool, and 

payout processes, many managers and employees found that NSPS had increased 

rather than lessened bureaucratic mire and unfairness. Moreover, legislation 

and implementation design adjustments and upheavals that potentially affected 

the livelihood and work patterns of several hundred thousand employees gave 

public-sector unions ample opportunities to cast NSPS as a failed system and 

major threat to workers’ rights. After the flawed system was in place, publicsector unions proved too strong and partisanship too fierce for adaptation. Yet 

the DoD civilian workforce was also too small, in the sense that it alone was 

designing, implementing, and defending a controversial personnel management 

transformation while the rest of the government largely continued with the 

familiar GS system. Ultimately, the system’s foes proved too numerous and the 

political terrain too inhospitable for NSPS to be reformed and not dissolved.
50 51

Occasional Papers • Number 1 NSPS

List of Abbreviations

AFL-CIO American Federation of Labor-Congress of Industrial Organizations

C.F.R. Code of Federal Regulations

CSRA Civil Service Reform Act

DHS Department of Homeland Security

DoD Department of Defense

FERS Federal Employee Retirement System

GAO Government Accountability Office (formerly the General 

Accounting Office)

GS General Schedule

IPT Integrated Product Team

NHHC Naval History and Heritage Command

NPR National Performance Review

NSPS National Security Personnel System

OASD Office of the Assistant Secretary of Defense

OIPT Overarching Integrated Product Team

OMB Office of Management and Budget

OPM Office of Personnel Management

OSD/HO Office of the Secretary of Defense/Historical Office

OUSD

(P&R) Office of the Under Secretary of Defense (Personnel and Readiness)

P&R Personnel and Readiness 

PAA Performance Appraisal Application

PEO Program Executive Office

PMRS Performance Management and Recognition System

SES Senior Executive Service

U.S.C. U.S. Code

UDWC United Defense Workers Coalition
53

NSPS

Notes

1. Memo, Chu for Rumsfeld, 15 Aug 2003, subj: DoD manpower by category, 

Rumsfeld Papers, <http://papers.rumsfeld.com/library>, accessed 14 Aug 2015; Wendy 

Ginsberg, Pay-for-Performance: Lessons from the National Security Personnel System 

(Washington, DC: Congressional Research Service, 2009), 1.

2. “Rank in job” meant that an employee’s rank was tied to one specific position and 

the qualifications for it. The Classification Act of 1923 established the principles of equal 

pay for equal work and rank in job. Its passage followed a wave of academic theories and 

business practices on scientific management of industrial workplaces designed to increase 

efficiency. The act standardized pay throughout organizations but sacrificed flexibility. 

Industrial-era reformers concluded that most government positions, like factory work, 

required few skills and duties and thus could be rigidly organized and measured. Although 

the system would change, the concepts of rank in job, standardized pay, and rigidity of 

tasks found in the 1923 act continued to guide most government work well into the 21st 

century and would be the primary target of NSPS. Patricia Ingraham, The Foundation of 

Merit: Public Service in American Democracy (Baltimore: The Johns Hopkins University 

Press, 1995), 38–39.

3. Ingraham, Foundation of Merit, 71; George Gallup, “Federal Workers Held In 

Low Public Esteem: The Gallup Poll,” Washington Post, 12 Jun 1977, 10.

4. Neal R. Peirce, “Civil Service: Reform Is Spreading,” Washington Post, 17 Dec 

1977, A19.

5. Ingraham, Foundation of Merit, 71; James Pfiffner and Douglas A. Brook, The 

Future of Merit: Twenty Years after the Civil Service Reform Act (Baltimore: The Johns 

Hopkins University Press, 2000), 3. See also Jeffrey L. Brudney and Stephen E. Condrey, 

“Pay for Performance: Explaining the Differences in Managerial Motivation Source,” 

Public Productivity & Management Review 17, no. 2 (Winter 1993): 130. The rewards, 

however, failed to approximate private-sector executive compensation and SESs proved 

less mobile than the CSRA architects had hoped. Members of the SES became increasingly 

disillusioned with bonuses. James Q. Wilson, Bureaucracy: What Government Agencies 

Do and Why They Do It (New York: Basic Books, 1989), 143–145; Peter H. Schuck, 

Why Government Fails So Often: And How It Can Do Better (Princeton, NJ: Princeton 

University Press, 2014), 323; Ingraham, Foundation of Merit, 84–85. The CSRA also 

codified employees’ rights into law under Chapter 71 of Title 5 of the U.S. code, which 

further strengthened government unions.
54 55

Occasional Papers • Number 1 NSPS

6. Jimmy Carter, Civil Service Reform Act of 1978: Statement on Signing S. 2640 

Into Law, 13 Oct 1978, The American Presidency Project, <http://www.presidency.ucsb.

edu/ws/?pid=29975>, accessed 29 Sep 2016. 

7. The initial CSRA pay pools went into effect in October 1981. Brudney and 

Condrey, “Pay for Performance,” 130; Government Accounting Office, A 2-Year Appraisal 

of Merit Pay in Three Agencies (Washington, DC: Government Printing Office, 1984); 

Ingraham, Foundation of Merit, 86. For critiques of later GS system pay-for-performance 

mechanisms, see Pfiffner and Brook, Future of Merit, 4–7; Patricia W. Ingraham and David 

H. Rosenbloom, “Political Foundations of the American Federal Service: Rebuilding a 

Crumbling Base,” Public Administration Review 50, no. 2 (Mar–Apr 1990): 210–219; 

Bernard Rosen, “Crises in the U.S. Civil Service,” Public Administration Review 46, no. 3 

(May–Jun 1986): 207–214; Paul A. Volcker, Leadership for America: Rebuilding the Public 

Service (Washington, DC: National Commission on the Public Service, 1989); Frank 

A. Yeager, “Assessing the Civil Service Reform Act’s Impact on Senior Manager Work 

Priorities,” Public Administration Review 47, no. 5 (Sep–Oct 1987): 417–424; Mark D. 

Laponsky, “Use and Abuse of Performance Appraisals Under the Civil Service Reform 

Act,” Labor Lawyer 3, no. 2 (Spring 1987): 287–298; Office of Personnel Management, 

Biography of an Ideal: A History of the Federal Civil Service (Washington, DC: OPM,

2003), 291–300; Ingraham, Foundation of Merit, 86–87.

8. Ingraham, Foundation of Merit, 86; Jeffrey Pfeffer, “Six Dangerous Myths about 

Pay,” Harvard Business Review 76, no. 3 (May–Jun 1998): 109–119.

9. Pfiffner and Brook, Future of Merit, 2–4; Alan K. Campbell, “Civil Service Reform: 

A New Commitment,” Public Administration Review 38, no. 2 (Mar–Apr 1978): 99–103; 

Gregory D. Foster, “The 1978 Civil Service Reform Act: Post-Mortem or Rebirth?” Public 

Administration Review 39, no. 1 (Jan–Feb, 1979): 78–86; OPM, Biography of an Ideal,

276–286; Wilson, Bureaucracy, 146–148; Ashton B. Carter and John P. White, eds.,

Keeping the Edge: Managing Defense for the Future (Cambridge, MA: MIT Press, 2001).

10. OPM, Biography of an Ideal, 292–296; Volcker, Leadership for America, 28. 

The commission included Donald Rumsfeld as a contributor and became known as the 

Volcker Commission after its chairman.

11. Al Gore, From Red Tape to Results: Creating a Government That Works Better and 

Costs Less (Washington, DC: Government Printing Office, 1993), 21.

12. Gore, From Red Tape to Results, 22. Government Accountability Office, Federal 

Aviation Administration: Human Capital System Incorporates Many Leading Practices, but 

Improving Employees’ Satisfaction with Their Workplace Remains a Challenge (Washington, 

DC: Government Printing Office, 2009), 5. 

13. Al Gore, Common Sense Government: Works Better and Costs Less (Washington, 

DC: Government Printing Office, 1993), 18-19, <http://govinfo.library.unt.edu/npr/

library/nprrpt/annrpt/pdf/com01.pdf>, accessed 29 Sep 2016.

14. United States Commission on National Security/21st Century, Road Map for 

National Security: Imperative for Change, the Phase III Report (15 Feb 2001), <http://www.

au.af.mil/au/awc/awcgate/nssg/phaseIIIfr.pdf>.

15. Carter and White, Keeping the Edge, 20. 

16. Although OPM sought to ensure that the government recruited the best 

qualified applicants, the reviewers stressed that the processing time required to screen 

potential candidates often discouraged the best candidates from applying as they could 

obtain jobs faster in the private sector. John S. Foster Jr. and General Larry D. Welch, 

USAF (ret.), Final Report of the Defense Science Board Task Force on Human Resources 

Strategy (Washington, DC: Defense Science Board Task Force, 2000), <http://www.dtic.

mil/get-tr-doc/pdf?AD=ADA374767>, xi, 33.

17. Office of Management and Budget, The President’s Management Agenda, FY 

2002 (Washington, DC: Executive Office of the President, Aug 2001), <https://www.

whitehouse.gov/sites/default/files/omb/budget/fy2002/mgmt.pdf>, 5; Falkenrath, 

quoted in Douglas A. Brook and Cynthia L. King, “Civil Service Reform as National 

Security: The Homeland Security Act of 2002,” Public Administration Review 67, no. 3 

(May 2007): 399–407.

18. In 1949, clerical occupations made up 70 percent of the federal Civil Service 

with 75 percent of employees at the rank of GS-7 or below. By 2003, clerical workers 

were a minority and a mere 30 percent of GS employees were at the GS-7 level and below. 

John F. Correll, “Rumsfeld Tackles the Civil Service,” Air Force Magazine 6, no. 7 (Jul 

2003).

19. See Kay Coles James, A Fresh Start for Federal Pay: The Case for Modernization 

(Washington, DC: Government Printing Office, 2002); George Nesterczuk, interview by 

Diane T. Putney, 26 Aug 2008, 20, Arlington, VA, OSD/HO.

20. George W. Bush, Decision Points (New York: Broadway, 2010), 83, 84; 

George W. Bush, “A Period of Consequences” (speech, The Citadel, Charleston, SC, 

23 Sep 1999), <http://www.citadel.edu/root/pres_bush>, accessed 8 Jan 2014; Donald 

Rumsfeld, Rumsfeld’s Rules: Leadership Lessons in Business, Politics, War, and Life (New 

York: Broadside Books, 2013), 62–63; Bradley Graham, By His Own Rules: The Ambitions, 

Successes, and Ultimate Failures of Donald Rumsfeld (New York: Public Affairs, 2009), 148. 

21. Donald Rumsfeld, Known and Unknown: A Memoir (New York: Sentinel, 

2011), 298.
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Occasional Papers • Number 1 NSPS

22. Rumsfeld, Known and Unknown, 294; Draft memo, Donald Rumsfeld, 25 

Jun 2001, subj: The DoD challenge, Rumsfeld Papers, <http://papers.rumsfeld.com/

library>. To combat bureaucratic inertia, Rumsfeld issued numerous memos typed on 

plain white paper, called snowflakes by those upon whom they fell. The subjects covered 

in the snowflakes varied widely—from sweeping strategic concerns to the mundane. 

Graham, By His Own Rules, 215. Rumsfeld sent a copy of his 10 September speech 

to Bush and emphasized his effort to pursue the president’s goal of gaining a greater 

freedom to manage. Memo, Rumsfeld for Bush, 10 Sep 2001, subj: Waste to warfighting, 

Rumsfeld Papers, <http://papers.rumsfeld.com/library>, accessed 28 Aug 2014. Rumsfeld 

himself acknowledged, “The 9/11 attacks provided an impetus to achieve many of the 

changes that were needed to meet the threats of the twenty-first century. Most of the 

previously intractable opposition yielded in the face of the new and uncertain threats to 

our national security.” Rumsfeld, Rumsfeld’s Rules, 143. The 2001 Quadrennial Defense 

Review emphasized the need for DoD human resources practices to stay abreast of those 

in the private sector. U.S. Department of Defense, Quadrennial Defense Review Report 

(Washington, DC: 30 Sep 2001), v, 51.

23. Tanya Ballard, “Unions Move to Block Implementation of New DHS 

Personnel System,” Government Executive, 22 Jun 2005, <http://www.govexec.com/

defense/2005/06/unions-move-to-block-implementation-of-new-dhs-personnelsystem/19510/>, accessed 17 Aug 2014; AFGE News Release, 6 Feb 2007, “Homeland 

Security Union Applauds House Cut of Max-HR Funding,” <https://www.afge.org>, 

accessed 15 Aug 2014; Stephen Barr, “DHS Withdraws Bid to Curb Union Rights,” 

Washington Post, 20 Feb 2008, <http://www.washingtonpost.com/wp-dyn/content/

article/2008/02/19/AR2008021902459.html>, accessed 20 Aug 2014; Ginger Groeber, 

interview by Thomas Christianson and Anthony Crain, 4 Sep 2014, Arlington, VA, 

untranscribed audio recording, OSD/HO. 

24. Charlie Abell, 16 Sep 2014, interview by Thomas Christianson and Anthony 

Crain, 16 Sep 2014, 6–7, Washington, DC, OSD/HO.

25. Memo, Charles Abell, George Nesterczuk for Gordon England, 25 Sep 

2004, subj: Requirements document for NSPS, 10, box 6, NSPS Initiative, OSD/

HO. England approved the document on 25 Sep 2004. Discussing the effects of the 

1990s drawdown, Chu stressed to Rumsfeld, “What is not reflected in these numbers 

is the growth in contracts over the years that offsets some of the manpower decreases.” 

Memo, Chu for Rumsfeld, 15 Aug 2003, subj: DoD manpower by category, Rumsfeld 

Papers, <http://papers.rumsfeld.com/library>, accessed 5 Sep 2014; Office of the Under 

Secretary of Defense (P&R), Department of Defense Civilian Human Resources Strategic 

Plan, (Washington, DC: Defense Technical Information Center, Apr 2005), 1, 4, 8, 

<http://www.dtic.mil/dtic/tr/fulltext/u2/a497250.pdf>, accessed 14 Nov 2014. White 

and Chu, “Ensuring Quality People in Defense,” in Carter and White, eds., Keeping the 

Edge, 230; Department of Defense OASD (Comptroller), Directorate for Management, 

Information Operations and Control, “Age Distribution of DoD Civilian Personnel,” 

1 Jun 1978, folder Civ. Pers. Statistics 1977–80, IX Manpower (1977–1980), Civilian 

Personnel, 1977–1980, box 1107, Subject Files, OSD/HO; General Accounting Office, 

Human Capital: Major Human Capital Challenges at the Departments of State and Defense

(Washington, DC: GAO, 20 Mar 2001), 8; David S. C. Chu, interview by Diane T. 

Putney and Alfred Beck, 25 Mar 2009, 28–29, Arlington, VA, OSD/HO; Gordon 

England and Robert Earl (former special assistant and chief of staff for Gordon England), 

interview by Diane T. Putney and Alfred Beck, 4 Jun 2009, 15–16, Arlington, VA, OSD/

HO; Schuck, Why Government Fails So Often, 322.

26. Memo, Chu for Rumsfeld, 15 Aug 2003, Rumsfeld Papers; OUSD (P&R), 

Civilian Human Resources Strategic Plan, 1; White and Chu, “Ensuring Quality People 

in Defense,” 230; Department of Defense OASD (Comptroller), Directorate for 

Management, Information Operations and Control, “Age Distribution of DoD Civilian 

Personnel,” 1 Jun 1978, folder Civ. Pers. Statistics 1977–80, IX Manpower (1977–1980), 

Civilian Personnel, 1977–1980, box 1107, Subject Files, OSD/HO; GAO, Human 

Capital: Major Human Capital Challenges, 20 Mar 2001), 8; OUSD (P&R), Civilian 

Human Resources Strategic Plan, 4; Chu interview, 25 Mar 2009, 28–29; England 

interview, 4 Jun 2009, 15–16. See also Schuck, Why Government Fails So Often, 322; 

OUSD (P&R), Civilian Human Resources Strategic Plan, 8.

27. Memo, Craig Fields for Under Secretary of Defense (Acquisition, Technology and 

Logistics), Final Report of the Defense Science Board Task Force on Human Resources 

Strategy, 28 Feb 2000, <http://www.dtic.mil/get-tr-doc/pdf?AD=ADA374767>, accessed 

29 Sep 2016.

28. College graduates increasingly motivated by the desire to do interesting work 

that helped others and less motivated by security viewed work in the federal government 

less favorably than employment in businesses or nonprofits. Paul C. Light, A Government 

Ill Executed: The Decline of the Federal Service and How to Reverse It (Cambridge: Harvard 

University Press, 2008); OUSD (P&R), Civilian Human Resources Strategic Plan, 4, 11;

Foster and Welch, Final Report, iii; Senate, Governmental Affairs Committee, Prepared 

Statement on the National Security Personnel System: Remarks as Prepared for Delivery by 

Secretary of Defense Donald H. Rumsfeld, 4 Jun 2003. 

Nesterczuk interview, 26 Aug 2008, 4–5; Chu interview, 25 Mar 2009, 44. 

Reliance on contractors expanded dramatically during the Bush administration’s Global 

War on Terror. Paul Light estimated, “Between 2002 and 2005, the number of Defense 

Department contract employees jumped from 3.4 million to 5.2 million, with a mix 

of jobs in both ‘hard contracts’ for material and ‘soft contracts’ for services.” Light, 

Government Ill Executed, 202. 

Many scholars have argued that agencies rely on contractors to disguise their true 

size (Light, Government Ill Executed; Schuck, Why Government Fails So Often; Memo,

Charles Abell, George Nesterczuk for Gordon England, 23 Sep 2004, subj: Requirements 

document for NSPS, box 6, NSPS Initiative, OSD/HO. The document was approved 
58 59

Occasional Papers • Number 1 NSPS

by England on 25 September 2004. Remarks of Charlie Abell, 29 Mar 2003, <http://

www.afge.org/Index.cfm?Page=Defense%20Conference&File-2003_03_29_Abell.

htm&print=True>, accessed 11 Apr 2008.

29. Chu interview, 25 Mar 2009, 3; Douglas Brook and Cynthia King, “Enactment 

and Implementation of the National Security Personnel System: Policy Made and Policy 

Unmade,” Public Administration Review 71, no. 6 (Nov/Dec 2011): 901.

30. Chu interview, 25 Mar 2009, 4–5. DoD had nine demonstration projects in 

operation, covering 30,000 employees. House, Committee on Government Reform, 

Subcommittee on Civil Service and Agency Organization, Hearings: Transforming the 

Defense Department; Exploring the Merits of the Proposed National Security Personnel System, 

108th Cong., 1st sess., 29 Apr 2003; DoD Civilian Acquisition Workforce Personnel 

Demonstration Project: Operating Procedures, <http://acqdemo.dau.mil/docs/revised_

op_proc.pdf>, accessed 2 Sep 2014; Groeber interview, 4 Sep 2014.

31. Mary Lacey, interview by Diane Putney, 16 Jan 2009, 8, Dahlgren, VA, OSD/

HO; Bradley Bunn, interview by Diane Putney, 14 Aug 2008, 7, 39, OSD/HO; Groeber 

interview, 4 Sep 2014. For a discussion on the history of Veterans’ Preference, see 

Ingraham, Foundation of Merit, 41–49.

32. Chu interview, 25 Mar 2009, 9; Lacey interview, 16 Jan 2009, 8; Nesterczuk 

interview, 26 Aug 2008, 15–16; Abell interview, 16 Sep 2014, 23; Barbara L. Schwemle, 

DoD’s National Security Personnel System: Provisions of Law and Implementation Plans

(Washington, DC: Congressional Research Service, 2006), 3. According to Groeber, the 

NSPS architects decided not to push the issue, reasoning that OSD would not interfere 

with already successful systems. Groeber interview, 4 Sep 2014.

33. White and Chu, “Ensuring Quality People in Defense,” 209; Chu interview, 

25 Mar 2009, 34–36; Groeber interview, 4 Sep 2014. OSD later decided against any 

modification to veterans’ preference and retention policy, but only after OPM officials 

cautioned that any attempt to lessen veterans’ preference would provoke fierce resistance 

from veterans groups and their congressional patrons.

34. Groeber interview, 4 Sep 2014; Memo, Wolfowitz for Rumsfeld, 13 Mar 2003, 

subj: Steering guidance on transformational legislation, Rumsfeld Papers, <http://papers.

rumsfeld.com/library>, accessed 3 Oct 2014. 

35. Nesterczuk reflected, “Past experience with collective bargaining over relatively 

minor issues tied the department up in knots. At times it has taken three to four years to 

resolve even relatively straightforward management initiatives. Nesterczuk interview, 26 Aug 

2008, 6; Groeber interview, 4 Sep 2014; Shane T. Prater and Eric W. Timmerman, “National 

Security Personnel System (NSPS): A History of Creation and Enactment of the Legislation 

Authorizing Its Establishment” (MS thesis, Naval Postgraduate School, 2008), 56. 

36. Chu interview, 25 Mar 2009, 12; “Federal Employees Oust Union Leader,” Wall 

Street Journal, 22 Aug 2003, B2; Christopher Lee, “Challenger Ousts AFGE Leader,” 

Washington Post, 22 Aug 2003, A19.

37. House, Committee on Government Reform, Subcommittee on Civil Service 

and Agency Organization, Transforming the Defense Department: Exploring the Merits of 

the Proposed National Security Personnel System, 108th Cong., 1st sess., 29 Apr 2003, 90. 

38. Chu interview, 25 Mar 2009, 25.

39. Chu interview, 25 Mar 2009, 7–8. Groeber interview, 4 Sep 2014; Andrew Card 

quoted in Prater and Timmerman “National Security Personnel System,” 52; Brook and 

King, “Enactment and Implementation,” 900–901.

40. Peter Baker, Days of Fire: Bush and Cheney in the White House (New York: 

Doubleday, 2013), 228; James E. Campbell, “The 2002 Midterm Election: A Typical 

or an Atypical Midterm?” Political Science and Politics 36, no. 2 (Apr 2003): 203–207; 

Jim VandeHei and Juliet Eilperin, “GOP Expands Its Majority; Midterm Gains Defy 

History,” Washington Post, 6 Nov 2002, A23. 

41. Chu interview, 25 Mar 2009, 11. 

42. Chu interview, 25 Mar 2009, 12–13. Charlie Abell stated that many Democrats 

with private-sector managerial experience conveyed their understanding and sympathy 

toward NSPS and promised not to oppose it aggressively. Abell interview, 16 Sep 2014, 

13–14.

43. Senate, Committee on Governmental Affairs, Hearings: Transforming the 

Department of Defense Personnel System: Finding the Right Approach, Donald Rumsfeld 

Testimony, 108th Cong., 1st sess., 4 Jun 2003; T. X. Hammes, Private Contractors in 

Conflict Zones: The Good, the Bad, and the Strategic Impact (Washington, DC: National 

Defense University, 2010).

44. Prater and Timmerman, “National Security Personnel System,” 82; Chu 

interview, 25 Mar 2009, 15–22. 

45. Steve Rodkey, NSPS Chronology, 3 Jan 2005, box 6, NSPS Initiative, OSD/

HO; Groeber interview, 4 Sep 2014; Chu interview, 25 Mar 2009, 40–41; William 

Navas, interview by John D. Sherwood, 6 Jan 2009, Arlington, VA, Naval History and 

Heritage Command, 15. Pete Brown (former interim NSPS program executive officer), 

interview by John D. Sherwood, 12 Aug 2008, 34, NHHC. 

46. Nesterczuk interview, 26 Aug 2008.
60 61

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47. Sharon Seymour (former associate director, personnel plans and programs for 

NSPS), interview by Al Garver, 29 Jul 2008, 11–12, Springfield, VA, Air Staff History Office.

48. Seymour interview, 29 Jul 2008, 11–12; Navas interview, 6 Jan 2009, 6.

49. Timothy F. Curry, interview by Diane T. Putney, 30 Jul 2008, 38, Arlington, VA, 

OSD/HO. The unions and members of Congress objected to the document, “National 

Security Personnel System Pre-Collaboration Relations System options, NSPS Labor 

Relations Outline,” 6 Feb 2004, box 14, NSPS Initiative, OSD/HO. Curry interview, 

30 Jul 2008, 38–39; AFGE, “DOD’s Conceptual Destruction of Collective Bargaining,” 

6 Feb 2004, <http://www.afge.org/Documents/DoD_Conceptual_Destruction_of_

Collective_Bargaining.pdf>, accessed 18 Aug 2014. For AFGE meeting minutes, see 

AFGE, DOD-NSPS Meeting, 26 Feb 2004, <http://www.afge171.org/DEFCON/Docs/

NSPS/20040226DoDNSPSMeeting.htm>, accessed 4 Aug 2014. The Groeber quote 

might not be exact. Rather, it is the message that Bunn remembers Groeber conveying to 

union officials. Bunn interview, 14 Aug 2008, 37–38. 

50. Ltr, Kay Coles James to Rumsfeld, 9 Mar 2004, <http://www.afge171.org/

DEFCON/Docs/NSPS/nspscomments/OL-10511803.pdf>, accessed 24 Aug 2014; 

OMB Comments on Mar 04 NSPS Proposal, undated, box 6, NSPS Initiative, OSD/HO.

51. The letter also urged OSD to publish the broad rules in the Federal Register, which 

would require DoD to open the rules up for 30 days for public comments. DoD would 

then have to respond to the comments before publishing the final rules. OSD normally 

did not publish rules in the Federal Register as OPM did. Ltr, James to Rumsfeld, 9 Mar 

2004. Thus “these two competing worlds [were] running up against each other.” Curry 

interview, 30 Jul 2008, 51–52. 

52. Nesterczuk interview, 4 Jun 2009, 14. Moreover, several officials later concluded 

that OSD lacked the necessary resources to make such a quick rollout possible. Bradley 

Bunn, interview by Ryan Carpenter and Anthony Crain, 26 Sep 2014, untranscribed 

audio recording, Fort Belvoir, VA, OSD/HO; Abell interview, 16 Sep 2014. Groeber 

disagreed with this notion. Groeber interview, 4 Sep 2014.

53. England interview, 4 Jun 2009, 15–16, 30; Nesterczuk interview, 26 Aug 2008, 

8–9. England’s comment about the need to focus on the implementation process rather 

than just the end goal as recalled by Bradley Bunn. Bunn interview, 14 Aug 2008, 32.

54. Groeber interview, 4 Sep 2014; Seymour interview, 29 Jul 2008, 4. Bunn 

and Abell both later stated that the initial rollout plans had been overly ambitious, and 

implementation would have ended in a debacle had they adhered to the initial timeline. 

Bunn interview, 16 Sep 2014; Abell interview, 16 Sep 2014. For Rumsfeld’s agreement 

with England’s new approach, see Memo, Rumsfeld for Gordon England, 19 Apr 2004, 

subj: Personnel system reforms, Rumsfeld Papers, <http://papers.rumsfeld.com/library>, 

accessed 1 Aug 2014. Rumsfeld’s selection of England to handle a DoD-wide matter while 

still secretary of the Navy provoked some indignation within the department. England 

interview, 4 Jun 2009, 16; Navas interview, 6 Jan 2009, 6–9. Groeber later stated that 

Gordon England’s assumption of the control of NSPS implementation became rather 

contentious. Groeber interview, 4 Sep 2014. 

55. Chu interview, 25 Mar 2009, 42.

56. Abell interview, 16 Sep 2014, 14. 

57. Chu interview, 25 Mar 2009; Memo, Wolfowitz for England, 19 May 2004, 

subj: Delegation of authority and assignment of duties pertaining to the National Security 

Personnel System, OSD 0710 5-04, box 3, NSPS Initiative, OSD/HO.

58. The NSPS PEO would not be formally chartered until 16 August 2004. Rodkey, 

NSPS Chronology, 3 Jan 2005; Program Executive Office, Charter, National Security 

Personnel System (NSPS) signed by Gordon England on 16 Aug 2004, box 14, NSPS 

Initiative, OSD/HO. On Lacey’s appointment, see Lacey interview, 16 Jan 2009, 3–4; 

England interview, 4 Jun 2009, 27–29. 

59. The Finance and Resources Integrated Product Team, for example, examined 

“the full range of financial management issues associated with the design, development, 

and implementation of the NSPS and to make recommendations on how to resolve them 

at the Departmental and/or Component level.” Members of the IPT included financial 

and HR representatives from the NSPS PEO and the components. National Security 

Personnel System (NSPS) Finance and Resource Integrated Product Team (IPT), Charter, 

Approved by Mary Lacey on 11 Feb 2005, box 6, NSPS Initiative, OSD/HO; Memo, 

Office of the Secretary of the Navy for distribution, 27 May 2004, subj: NSPS overarching 

integrated product team (OIPT), box 6, NSPS Initiative, OSD/HO. Other members of 

the OIPT included the assistant secretaries of the Army, Navy, and Air Force (manpower 

& reserve affairs), a representative of the secretary of defense, and a representative of the 

NSPS senior executive representative. Memo, Charles Abell and George Nesterczuk for 

Gordon England, 10 Nov 2004, subj: Action memo: OIPT recommendations for NSPS 

design—human resources management, box 6, NSPS Initiative, OSD/HO.

60. Navas interview, 6 Jan 2009, 10.

61. Kay Coles James, OPM’s Guiding Principles for Civil Service Transformation, 

14 Apr 2004, 3, box 3, NSPS Initiative, OSD/HO.

62. NSPS PEO, Potential Options for the National Security Personnel System 

Human Resource Management System Presented to Department of Defense Unions, 2 

Sep 2004, box 6, NSPS Initiative, OSD/HO; England interview, 4 Jun 2009, 16–17, 56; 

AFGE, “DOD’s Conceptual Destruction of Collective Bargaining,” 6 Feb 2004, <http://
62 63

Occasional Papers • Number 1 NSPS

www.afge.org/Documents/DoD_Conceptual_Destruction_of_Collective_Bargaining.

pdf>, accessed 18 Aug 2014.

63. John Gage, “Important New Developments in DoD’s Plans to Revise Its Labor 

Relations, Appeals, Performance Management and Pay Systems,” 2 Apr 2004, folder: 

2004, box 3, NSPS Initiative, OSD/HO. 

64. Lacey interview, 16 Jan 2009, 43–45. Gage’s and Sweeney’s AFGE Conference 

remarks quoted in AFGE Press Release, “Defense workers raise voices and signs 

to protest new personnel changes,” 8 Feb 2005, <https://www.afge.org/Index.

cfm?Page=PressReleases&PressReleaseID=416>, accessed 14 Apr 2014.

65. Lacey interview, 16 Jan 2009, 43–45.

66. National Security Personnel System Proposed Rule, 70 Fed. Reg. 7551 (14 Feb 

2005); Lacey interview, 16 Jan 2009, 46; Curry interview, 30 Jul 2008, 62–63; Byron 

Charlton to Bradley Bunn and Daniel Blair, NSPS: Comments on Proposed Regulations 

for the National Security Personnel System from Unions Representing DoD Employees, 

Mar 2005, in Joint Comments and Recommendations Submitted by the United Department 

of Defense Workers Coalition, by Program Executive Office: National Security Personnel 

System, folder Tim Curry, box 9, NSPS Initiative, OSD/HO.

67. Timothy Curry, DoD’s executive director, labor management and employee 

relations, recalled: “Some of them actually liked the idea of pay for performance, but 

only if you did collective bargaining on them. Others were completely against pay for 

performance no matter what, even if you did collective bargaining.” Curry interview, 

30 Jul 2008, 42; Memo, Don Hale to DoD employees, 14 Feb 2005, subj: The 

Valentine’s Day slaughter of DoD civilians, AFGE website, <http://www.afge171.org/

DEFCON/Docs/NSPS/20050214TOALLDODEMPLOYEES.pdf>, accessed 25 Aug 

2014; Ltr., Byron Charlton to Bradley Bunn and Daniel Blair, “Joint Comments and 

Recommendations Submitted by the United Department of Defense Workers Coalition” 

in Program Executive Office of the National Security Personnel System, NSPS: Comments 

on Proposed Regulations for the National Security Personnel System from Unions Representing 

DoD Employees (Arlington, VA: Mar 2005), folder Tim Curry, box 9, NSPS Initiative, 

OSD/HO. 

68. Senate, Committee on Homeland Security and Governmental Affairs, Oversight 

of Government Management, the Federal Workforce and the District of Columbia 

Subcommittee, Hearing on the Status of Federal Personnel Reform, 109th Cong., 1st 

sess.,15 Mar 2005; Jeffrey Pfeffer, “Six Dangerous Myths about Pay,” 109–119.

69. Ltr, Rumsfeld and Linda M. Springer to Cheney, 26 Oct 2005, folder Nesterczuk, 

box 9, NSPS Initiative, OSD/HO. NSPS PEO, National Security Personnel System Fact 

Sheet, Oct 2005, box 3, NSPS Initiative, OSD/HO.

70. Action memo, Mary Lacey for Gordon England, 31 Jan 2006, subj: Stand up 

of National Security Labor Relations Board (NSLRB), box 6, NSPS Initiative, OSD/

HO; American Federation of Government Employees, AFL-CIO et al. v. Donald H. 

Rumsfeld, Secretary, United States Department of Defense, et al., 422 F. Supp. 2d 16 (DC 

Cir. 2006); Trudy Walsh, “Proposed Defense HR System Suffers Setback,” Government 

Computer News, 6 Mar 2006, <https://gcn.com/articles/2006/03/03/proposed-defensehr-system-suffers-setback.aspx>, accessed 9 Sep 2014; Memo, John Gage for National 

Executive Council, Council Presidents, DEFCON, and DoD Locals, 1 Mar 2006, subj: 

Summary of NSPS court victory in AFGE v. Rumsfeld, box 1, NSPS Initiative, OSD/

HO; Mary Lacey, interview by Diane Putney, 22 Jan 2009, 45, Dahlgren, VA, OSD/HO; 

Gerry J. Gilmore, “Pentagon to Appeal Court Ruling Against New Personnel System,” 

Armed Forces Press Service, 1 Mar 2006, <http://archive.defense.gov/news/newsarticle.

aspx?id=15305>, accessed 3 Apr 2015; “DoD to Implement Elements of Human 

Resources System to Spiral 1.1 Employees,” Defense Civilian Personnel Management 

System, website printout in box 1, NSPS Initiative, OSD/HO; American Federation of 

Government Employees, et al. v. Robert M. Gates, Secretary, United States Department 

of Defense, et al., 486 F.3d 1316 (DC 2006). In spring 2007 the unions successfully 

dismantled the Department of Homeland Security’s Max-HR system through legal 

challenges. In March, Congress abolished the remnants of DHS’ Max-HR. AFGE Press 

Release, “Homeland Security Union Applauds Vote Repealing MAX-HR,” 28 Mar 2007, 

<https://www.afge.org/Index.cfm?Page=PressReleases&PressReleaseID=723>, accessed 

30 Jan 2015; AFGE, “DHS Personnel System Derailed, Thanks to AFGE Push to Cut 

Funding,” <http://www.securityinfowatch.com/news/10545704/dhs-personnel-systemderailed-thanks-to-afge-push-to-cut-funding>, accessed 30 Jan 2015.

71. Lacey interview, 16 Jan 2009, 19–20; DoD News Release, “DoD Selects 

First Group for National Security Personnel System,” 15 Dec 2004, <http://archive.

defense.gov/Releases/Release.aspx?ReleaseID=8069>, accessed 16 Jan 2015; Air Force 

National Security Personnel System Office, NSPS Newsletter, 26 Jan 2007, box 1, NSPS 

Initiative, OSD/HO; Barbara Haga, Roger Richman, and William Leavitt, “System 

Failure: Implementing Pay for Performance in the Department of Defense’s National 

Security Personnel System,” Public Personnel Management 39, no. 3 (Fall 2010): 220. The 

department estimated the implementation costs from fiscal years 2005 through 2008 

would be $158 million. The NSPS Program Executive Office made this projection in 

November 2005. The NSPS PEO later updated the estimate to $165.8 million in March 

2007. Congressional Budget Office, A Review of the Department of Defense’s National 

Security Personnel System (Washington, DC: Nov 2008), 30–31.

72. England interview, 4 Jun 2009, 46. In requesting Component Nominations for 

Spiral 1, Lacey wrote, “Organizations included in Spiral One must have adequate resources 

and funding, have Component endorsement, and should: 1. Have an adaptable workforce 

climate and demonstrated acceptance of and readiness for change. 2. Have established 

methods to measure effectiveness in accomplishing their mission and a strategic and/or 

business plan which ties to their human resources plan.” Memo, Mary Lacey for NSPS 

Component Program Managers, 28 Jul 2008, subj: Request for component nominations 
64 65

Occasional Papers • Number 1 NSPS

for NSPS spiral one, box 6, NSPS initiative, OSD/HO. Wendy Ginsberg wrote, “Spirals 

1.1, 1.2, and 1.3 were completed in March 2007. Spiral 2 began in October 2007, 

and was completed in April 2008, with more than 180,000 of roughly 670,000 DOD 

employees placed in NSPS. The final spiral began in October 2008 and was completed 

in March 2009, adding 14,000 additional employees to NSPS, bringing the total of 

DOD employees covered by NSPS to 211,000.” Ginsberg, Pay-for-Performance, 5. See 

also OPM, Creating a Foundation for the 21st Century Federal Workforce: An Assessment 

of the Implementation of the Department of Defense National Security Personnel System 

(Washington, DC: Government Printing Office, 2007), 7; Seymour Interview, 29 Jul 

2008, 14; PEO-NSPS, Spiral 1.1, 26 Jan 2006, box 1, NSPS Initiative, OSD/HO.

73. Bradley Bunn, interview by Diane T. Putney, 12 Sep 2008, 28–30, Arlington, VA, 

OSD/HO. For Lacey’s reflections on the early IT issues, see Lacey interview, 22 Jan 2009, 

35–36. Government difficulties with IT were not unique to NSPS. The Federal Aviation 

Administration’s Federal Advanced Automation System of the 1980s and early 1990s 

resulted in $1.5 billion in waste. Clay Shirky, “The Key to Successful Tech Management: 

Learning to Metabolize Failure,” Foreign Affairs 93, no. 2 (Mar–Apr 2014), <https://

www.foreignaffairs.com/articles/2014-02-12/key-successful-tech-management>. The 

initial PAA website User Guide was 167 pages. Performance Appraisal Application User 

Guide, Version 1, Oct 2006, box 18, NSPS Initiative, OSD/HO. The NSPS PEO had 

commissioned its own internal review through a contract with SRA International, Inc. 

See also SRA, National Security Personnel System 2008 Evaluation Report, G-2, Defense 

Technical Information Center, <http://www.dtic.mil/dtic/tr/fulltext/u2/a556017.pdf>, 

accessed 2 Oct 2014; Michael Dominguez, interview by Randy Richardson, 1 Aug 2008, 

Arlington, VA, Air Force Staff History Office, 15. 

74. Bradley Bunn, interview by Diane T. Putney, 12 Sep 2008, 28–30, Arlington, 

VA, OSD/HO.

75. Ginsberg, “Pay-for-Performance,” 7. For a contemporary explanation of the 

system, see “Town Hall to Answer Civilians’ NSPS Questions,” Fort Campbell Courier, 

8 Mar 2007, <http://www.fortcampbellcourier.com/news/article_d713f4d3-ccb0-5628-

90c3-cce2053c96fc.html>, accessed 14 Sep 2014; Stephen S. Kreiser, “The National 

Security Personnel System: An Optimization Strategy for Implementing Pay-forPerformance” (MS thesis, U.S. Army War College, 2006), 15.

76. Defense Business Board, Report to the Secretary of Defense: Review of the 

National Security Personnel System, Report FY09–06, (Jul 2009), <http://dbb.defense.gov/

Portals/35/Documents/Reports/2009/FY09-6_Review_Of_The_National_Security_

Personnel_System_2009-7.pdf>, 13.

77. Ginsberg, “Pay-for-Performance,” 8. For a complete listing of pay band salary 

levels for the four NSPS career groups and their GS equivalencies in 2008, see CBO, 

Review of the Department of Defense’s National Security Personnel System, 58–59; Memo, 

Charles Abell, George Nesterczuk for Gordon England, 25 Sep 2004, subj: Requirements 

document for NSPS 10, box 6, OSD/HO, NSPS Initiative.

78. NSPS PEO, HR Elements for Managers, Supervisors, and Employees, Spiral 1, 

Version 2, 41, box 18, NSPS Initiative, OSD/HO; House, Armed Services Committee, 

Readiness Subcommittee, Hearings: Department of Defense National Security Personnel 

System, Bradley Bunn Testimony, 111th Cong., 1st sess., 1 Apr 2009, 133. For an NSPS 

position description form, see Defense Technical Information Center, NSPS Position 

Description form, <http://www.dtic.mil/whs/directives/forms/eforms/dd2918.pdf>, 

accessed 1 Oct 2014.

79. NSPS PEO, HR Elements, Spiral 1, Version 2, 26, as quoted in Ginsberg, “Payfor-Performance, 11. 

80. Ginsberg, Pay-for-Performance, 11.

81. The GAO visited 12 sites (three for each component, including the Army, Navy, 

Air Force, and the Fourth Estate). The reviewers conducted wide-ranging interviews with 

officials at various levels of management and discussions with employees. GAO, Human 

Capital: DOD Needs to Improve Implementation of and Address Employee Concerns about 

Its National Security Personnel System (Washington, DC: Government Printing Office, 

2008), 4. 

82. SRA, National Security Personnel System 2008 Evaluation Report, 3–8; GAO, 

DOD Needs to Improve Implementation, 36. See also GAO, Human Capital: Monitoring 

of Safeguards and Addressing Employee Perceptions Are Key to Implementing a Civilian 

Performance Management System in DOD (Washington, DC: Government Printing 

Office, 2009).

83. NSPS PEO, HR Elements for Managers, Supervisors, and Employees: A Guide to 

NSPS, Spiral 1, Version 2, May 2006, 37, box 18, NSPS Initiative, OSD/HO. 

84. Charles Abell and George Nesterczuk, Requirements Document for National 

Security Personnel System (NSPS),. 23 Sep 2004, box 6, NSPS Initiative, OSD/HO; 

England interview, 4 Jun 2009, 42, 48; Performance Payouts, 5 C.F.R. § 9901.342 (1 

Jan 2008).

85. Haga, Richman, and Leavitt, “System Failure,” 221–222; SRA International, 

Inc., National Security Personnel System 2008 Evaluation Report, (15 May 2009), 3–32; 

GAO, Human Capital: DOD Needs to Improve Implementation of and Address Employee 

Concerns about Its National Security Personnel System, (Washington, DC: Government 

Printing Office, 2008), 37; GAO, Human Capital: Monitoring of Safeguards.
66 67

Occasional Papers • Number 1 NSPS

86. CBO, Review of the Department of Defense’s National Security Personnel System, 64.

87. England interview, 4 Jun 2009, 49–51; Lacey interview, 22 Jan 2009, 24.

88. Lacey interview, 22 Jan 2009, 11–12; GAO, Human Capital: Monitoring of 

Safeguards, 39.

89. Defense Business Board, Report to the Secretary of Defense: Review of the National 

Security Personnel System, Report FY09–06, (Jul 2009), 11; Brown interview, 12 Aug 

2008, 48. House, Armed Services Committee, Readiness Subcommittee, Hearings: The 

National Security Personnel System, 111th Cong., 1st sess., 1 Apr 2009.

90. Bunn interview, 26 Sep 2014; “AFGE News for DoD Employees: Ten NSPS 

Fatal Flaws You Should Know About,” AFGE, Fall 2008, <http://www.afge.org>, accessed 

12 Dec 2014 (web page discontinued). 

91. “AFGE: What’s Ahead After the Midterm Elections,” Government Standard,

Jan–Feb 2007, <http://www.afge171.org/afge/Standard/GS_2007_Jan_Feb.pdf>, 

accessed 2 Jun 2014; House, Armed Services Committee, Readiness Subcommittee, 

Hearings: The National Security Personnel System—Is It Really Working? Ron Ault, President 

of the Metal Trades Department, AFL-CIO, Prepared Testimony on Behalf of the UDWC, 

110th Cong., 1st sess., 6 Mar 2007; National Federation of Federal Employees News 

Release, “Bush Signs Defense Authorization, NSPS Reform Into Law,” 29 Jan 2008, 

<www.nffe.org/ht/display/ReleaseDetails/i/5360>, accessed 26 Feb 2008, printout in box 

3, NSPS Initiative, OSD/HO; Brook and King, “Enactment and Implementation,” 905. 

“NSPS Campaign Ends in Victory,” Federal Employee, Spring 2008, <http://www.nffe.

org/ht/a/GetDocumentAction/i/5712>, accessed 12 Sep 2014; Wendy Ginsberg, Payfor-Performance, 19.

92. Ltr, Barack Obama to John Gage, 9 Sep 2008, Washington Post, <http://www.

washingtonpost.com/wp-srv/politics/documents/Obama_NSPS.pdf>, accessed 10 Aug 

2014; Ltr, Ike Skelton and Carl Levin to England, 10 Sep 2008, on AFGE’s DEFCON, 

<http://www.afge171.org/DEFCON/Docs/NSPS/20080919-england_letter.pdf>, 

accessed 16 Aug 2014; Ltr, England to Skelton, 19 Sep 2008, <http://www.afge171.org/

DEFCON/Docs/NSPS/20080926SDOC3338.pdf>, accessed 26 Sep 2014.

93. Bunn interview, 26 Sep 2014.

94. DoD News Release, “DoD and OPM to Review National Security 

Personnel System,” 16 Mar 2009 <http://archive.defense.gov/Releases/Release.

aspx?ReleaseID=12556>; Joe Davidson, “Controversial Pay-for-Performance Program 

Put on Hold,” Washington Post, 17 Mar 2009, D03; Bunn interview, 26 Sep 2014. 

95. Memo, Lynn for Chairman, Defense Business Board, 14 May 2009, subj: 

Defense Business Board review of the National Security Personnel System (NSPS), 

folder D: Civilian Personnel, box 1161C, Subject Files, IX Manpower, OSD/HO; DoD 

News Release 337-09, 15 May 2009, “DoD, OPM Announce Defense Business Board 

NSPS Review,” <http://archive.defense.gov/Releases/Release.aspx?ReleaseID=12679>, 

accessed 17 Mar 2014. According to Bunn, the Program Executive Office sought to be 

as transparent as possible in responding to the reviewers. Bunn interview, 26 Sep 2014. 

96. John Gage, Statement before the Defense Business Board Task Group on the 

National Security Personnel System, 25 Jun 2009, <https://www.afge.org/globalassets/

documents/congressional-testimony/afge-1.0/jun-29-2009---defense-business-boardtask-group-on-the-national-security-system.doc>, accessed 14 Aug 2014.

97. Defense Business Board, Report to the Secretary of Defense: Review of the National 

Security Personnel System, (Jul 2009), <http://dbb.defense.gov/Portals/35/Documents/

Reports/2009/FY09-6_Review_Of_The_National_Security_Personnel_System_2009-7.

pdf>, accessed 1 Aug 2014.

98. Stephen Losey, “Performance Pay for All Feds,” Federal Times 45, no. 14 (1 

Jun 2009), 1–19; Joe Davidson, “No Boos (Yet) for a Plan That Isn’t Called ‘Pay for 

Performance,’” Washington Post, 25 Aug 2009, A13; Ltr, John Gage to Task Group on 

NSPS, 13 Aug 2009, AFGE website, accessed 23 Sep 2014, web page discontinued. 

99. Editorial, Federal Times 45, no. 15 (8 Jun 2009), 22. 

100. Joe Davidson, “Federal Diary: Union Chiefs Defend GS System, Up to 

a Point,” Washington Post, 21 Jul 2009, <http://www.washingtonpost.com/wp-dyn/

content/article/2009/07/20/AR2009072002940.html>, accessed 25 Sep 2014.

101. Davidson, “Union Chiefs Defend GS System”; Haga, Richman, and Leavitt, 

“System Failure,” 220; Joe Davidson, “Union Leaders Find Many Reasons to Be Merry 

about 2009,” Washington Post, 18 Dec 2009, A30.

102. U.S. Air Force, “New NSPS transition office announced,” American Forces 

Press Service, 21 Jan 2010, <http://www.af.mil/News/ArticleDisplay/tabid/223/

Article/117924/new-nsps-transition-office-announced.aspx>; Conversion or Movement 

Out of NSPS Pay System, 5 C.F.R. § 9901.372 (2008). For the Army’s transition plan, 

see Deputy Chief of Staff, Army Transition Guidance for Termination of National Security 

Personnel System (NSPS), (21 Jun 2011), <http://cpol.army.mil/library/general/nspsarchives/docs-repeal/Final_NSPStoGS_Guidance_Ver5_21June11.pdf>, accessed 27 

May 2014.

103. Wendy R. Ginsberg, Conversion from the National Security Personnel System 

to Other Pay Schedules: Issues for Congress (Washington, DC: Congressional Research 
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Service, 2011), 3–5. For more on the complexities of transitioning from NSPS to the 

GS system, see NSPS Transition Office, HR Practitioner: Transition from NSPS to GS, 

(30 Jul 2010), <http://cpol.army.mil/library/general/nsps-archives/docs-repeal/DoD_

Transition_Guidance_Chap_1-4_2010-07-30.PDF>, accessed 1 Jul 2014. 

104. Donna Miles, “NSPS Transition Well Under Way, Official Tells Congress,” 

American Forces Press Service, 9 Jun 2010, <http://www.defense.gov/news/newsarticle.

aspx?id=59564>, accessed 19 Mar 2014. For more on reconversion to the GS system, 

see “Fact Sheet: Pay Retention for Former NSPS Employees,” OPM, <http://www.opm.

gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/pay-retention-forformer-nsps-employees>, accessed 3 Apr 2014. 

105. See Stephen Losey, “In NSPS’ Wake: Confusion and Lawsuits,” 

Federal Times, 4 Mar 2012, <http://www.federaltimes.com/article/20120304/

DEPARTMENTS01/203040307>, accessed 5 May 2014. 

106. Joe Davidson, “Federal Diary: OPM’s Berry talks of ending GS system,” 

Washington Post, 3 Nov 2009, <http://www.washingtonpost.com/wp-dyn/content/

article/2009/11/02/AR2009110203524.html>, accessed 15 Sep 2014; House, Armed 

Services Committee, Defense Acquisition Panel, Statement by Joseph Flynn regarding 

Expert Perspectives on Managing the Defense Acquisition System and the Defense Acquisition 

Workforce, 111th Cong., 2nd sess., 25 Feb 2010. 

107. Groeber interview, 4 Sep 2014; Abell interview, 16 Sep 2014, 16; Bunn 

interview, 26 Sep 2014. 

108. Howard Risher, “Learning from NSPS Failure,” Federal Times, 23 May 2010, 

<http://archive.federaltimes.com/article/20100523/ADOP06/5230304/Learning-fromNSPS-failure>, accessed 12 Aug 2014; “Panel: NSPS Lessons and Future of Pay-forPerformance,” Federal News Radio broadcast, 27 Jan 2012, <http://www.federalnewsradio.

com/394/2724165/Panel-NSPS-lessons-and-future-of-pay-for-performance>.

About the Author

Anthony R. Crain joined the OSD Historical Office in August 2012. He holds 

a B.A. in history and political science from Indiana University and an M.A. 

and Ph.D. in history from Ohio State University. Dr. Crain is a specialist in 

U.S. diplomatic and modern European history. His dissertation, “Alliance in 

Turmoil: The United States, the Federal Republic of Germany, and the End of 

Détente” explores tensions between the United States and West Germany during 

the Carter administration.

About the Editor

Erin R. Mahan has been Chief Historian for the Secretary of Defense since 

2010. Previously she worked in the Center for the Study of Weapons of Mass 

Destruction at National Defense University and in the Historian’s Office at the 

U.S. State Department, where she was an editor of the Foreign Relations of the 

United States series. Dr. Mahan holds a Ph.D. in history from the University 

of Virginia.

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Historical Office

Office of the Secretary of Defense

Washington, DC