U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

86–287 PDF 2014

TITLE 42: A REVIEW OF SPECIAL HIRING 

AUTHORITIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

SEPTEMBER 14, 2012 

Serial No. 112–178 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

SUBCOMMITTEE ON HEALTH

JOSEPH R. PITTS, Pennsylvania 

Chairman 

MICHAEL C. BURGESS, Texas 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

TIM MURPHY, Pennsylvania 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

JOHN D. DINGELL, Michigan 

EDOLPHUS TOWNS, New York 

ELIOT L. ENGEL, New York 

LOIS CAPPS, California 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 4 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 5 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 6 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 8 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, prepared statement ........................................................................... 64 

WITNESSES

Robert Goldenkoff, Director, Strategic Issues, Government Accountability Office ......................................................................................................................... 9

Prepared statement 1

Robert J. Cramer, Managing Associate General Counsel, Government Accountability Office ................................................................................................ 10 

Prepared statement .......................................................................................... 12 

SUBMITTED MATERIAL

Human Resources Manual, Instruction 42–1, dated February 15, 2012, Department of Health and Human Services, submitted by Mr. Pallone ............. 49 

Hearing memorandum ............................................................................................ 66 

Report, dated July 2012, ‘‘Human Capital: HHS and EPA Can Improve Practices Under Special Hiring Authorities,’’ Government Accountability Office .. 69 

Letter, dated July 11, 2012, from Lynn H. Gibson, General Counsel, Government Accountability Office, to Hon. Denny Rehberg, et al. .............................. 121 

1Mr. Goldenkoff and Mr. Cramer submitted a joint statement for the record. 

(1) 

TITLE 42: A REVIEW OF SPECIAL HIRING 

AUTHORITIES 

FRIDAY, SEPTEMBER 14, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HEALTH, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123, Rayburn House Office Building, Hon. Joseph R. Pitts (chairman of the subcommittee), presiding. 

Members present: Representatives Pitts, Burgess, Shimkus, 

Gingrey, Latta, McMorris Rodgers, Barton, Pallone, and 

Schakowsky. 

Staff present: Brenda Destro, Professional Staff Member, Health; 

Debbee Keller, Press Secretary; Katie Novaria, Legislative Clerk; 

Krista Rosenthall, Counsel to Chairman Emeritus; Alan Slobodin, 

Deputy Chief Counsel, Oversight; Heidi Stirrup, Health Policy Coordinator; Alli Corr, Democratic Policy Analyst; Ruth Katz, Democratic Chief Public Health Counsel; and Anne Morris Reid, Democratic Professional Staff Member. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. PITTS. The time of 10 o’clock having arrived, the subcommittee will come to order. 

The chair recognizes himself for 5 minutes for an opening statement. 

Title 42 of the Public Health Service Act provides authority to 

appoint and set pay for difficult-to-fill, critical scientific and medical positions in the Public Health Service. The Department of 

Health and Human Services uses this authority, which allows them 

to pay individuals above the salary limits of other government employees, to attract and retain topnotch scientists and researchers 

who might otherwise go into academia or the private sector. 

Clearly, the Secretary needs some flexibility to attract and retain 

the best and brightest in science and medicine, but these authorities should be limited and transparent. 

Laws passed by Congress and regulations promulgated since the 

1930s and 1940s show that the program was intended for special 

use when there was no other way to hire needed experts; it was 

never intended to be used as an alternative compensation program. 

Yet, in 2010, almost 7,000 employees at HHS were appointed using 

2 

Title 42 authority, a 25 percent increase over 5 years. Some of 

those annual salaries have reached levels higher than $350,000. 

HHS has recently moved to lower the caps on these salaries, yet 

the Secretary of HHS can still approve pay levels higher than the 

caps, which may give her more hiring and compensation authority 

than anyone else in the Federal Government. 

In 2005, the Environmental Protection Agency began hiring experts using the Title 42 authority, once again, to fill critical science 

positions. Now, 15 of the 17 positions at the EPA are paid at or 

above Executive Level 4. 

The extensive use of Title 42 and the unprecedented authority of 

the Secretary to compensate some experts at extraordinarily high 

rates led the committee to ask the GAO to analyze the laws that 

govern Title 42 and audit its use at HHS and the EPA. Today, we 

have asked GAO to share the results of that study. 

Congressman Joe Barton has introduced H.R. 6214, the HHS 

Employee Compensation Reform Act of 2012, which makes simple, 

commonsense changes to the use of Title 42 authorities. It limits 

the use of Title 42 authority to HHS; caps the number of Title 42 

hires to 5 percent of the total number of employees at HHS; ensures that compensation may not exceed 150 percent of Executive 

Level 1; allows up to 50 employees to be paid without regard to 

compensation limitation if the Secretary determines the position is 

vital; and requires a report to Congress 6 months after enactment. 

I commend Mr. Barton for his work on this issue. 

And I would like, at this time, to yield the remainder of my time 

to Dr. Burgess. 

[The prepared statement of Mr. Pitts follows:] 

3 


86287.001

Opening Statement of the Honorable Joe Pitts 

Subcommittee on Health 

Hearing on "Title 42 - A Review of Special Hiring Authorities" 

September 14, 2012 

(As Prepared for Delivery) 

Title 42 of the Public Health Service Act provides authority to appoint and set pay for difficult to 

fill, critical scientific and medical positions in the Public Health Service. 

The Department of Health and Human Services (HHS) uses this authority, which allows them to 

pay individuals above the salary limits of other government employees, to attract and retain topnotch scientists and researchers who might otherwise go into academia or the private sector. 

Clearly, the Secretary needs some flexibility to attract and retain the best and brightest in science 

and medicine. But, these authorities should be limited and transparent. 

Laws passed by Congress and regulations promulgated since the 30s and 405 show that the 

program was intended for special use when there was no other way to hire needed experts. It 

was never intended to be used as an alternative compensation program. Yet, in 2010, almost 

7,000 employees at HHS were appointed using Title 42 authority, a 25 percent increase over five 

years. 

Some of those annual salaries have reached levels higher than $350,000. HHS has recently 

moved to lower the caps on these salaries. Yet, the Secretary of HHS can still approve pay levels 

higher than the caps, which may give her more hiring and compensation authority than anyone 

else in the federal government. 

In 2005, the Environmental Protection Agency began hiring experts using the Title 42 authority, 

once again to fill critical science positions. Now,15 ofthe 17 positions at the EPA are paid at or 

above Executive Level IV. 

The extensive use of Title 42 and the unprecedented authority of the Secretary to compensate 

some experts at extraordinarily high rates led the committee to ask the GAO to analyze the laws 

that govern Title 42 and audit its use at HHS and EPA. 

Today, we have asked GAO to share the results of that study. 

Rep. Joe Barton has introduced H.R. 6214, the HHS Employee Compensation Reform Act of 

2012, which makes simple, commonsense changes to the use otTitle 42 authorities. 

It limits the use of Title 42 authority to HHS; caps the number of Title 42 hires to 5 percent of the 

total number of employees at HHS; ensures that compensation may not exceed 150 percent of 

Executive Levell; allows up to 50 employees to be paid without regard to compensation limitation 

if the secretary determines the position is vital; and requires a report to Congress six months after 

enactment. 

I commend Mr. Barton for his work on this issue. 

### 
4 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman. 

Title 42 is a special hiring provision that Congress explicitly gave 

to HHS through the Public Health Services to allow HHS to attract 

the best and brightest. Many of these men and women hired under 

Title 42 could easily be making three or four times what they make 

working in the public sector but have chosen to dedicate their work 

to government service. Because of the salary constraints under normal Title 5 hiring practices, HHS’s hands were tied as to what it 

could offer to leaders of these fields to attract them to HHS. 

This program began with noble purposes and continues to be an 

important recruitment tool for HHS, the agency that Congress intended to be using it. It should come as no surprise that the 

minute other Federal agencies heard of this higher salary structure, they came to Congress asking for authority to pay themselves 

more. It would be one thing if these agencies had come to this committee, the authorizing committee, which wrote the Title 42 statute 

to begin with. Instead, the EPA did an end run around Energy and 

Commerce and went directly to Appropriations asking for the authority. 

Every member of this committee should be shocked and outraged 

that an agency under our jurisdiction chose to ignore our authority 

as the authorizing committee for such hires. This is a congressional 

jurisdictional issue if there ever was one. Not only did the EPA do 

the end run for years, but in oversight hearing after oversight 

hearing they would refuse to give us information as to their hiring 

practices. It is a precedent that has been set, and what is to stop 

every Federal agency, every Federal bureaucracy from doing the 

same thing? 

I introduced earlier this Congress H.R. 2791, the Health and 

Human Services Hiree Clarification Act, which codifies this committee’s clear intent that Title 42 is only to be used by officials at 

HHS—not EPA, not Department of Labor, and not the Park Service. I am happy to see that Mr. Barton has included language from 

this legislation in his bill, as well. If other agencies believe so 

strongly that they need a special hiring authority, come to the authorizers, justify their request, and do it as regular order dictates. 

This hearing is long overdue. I thank the chairman for the consideration. I will yield back balance of my time. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

ranking member, Mr. Pallone, for 5 minutes for an opening statement. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to ask unanimous consent to include in the record the 

statement of our ranking member, Henry Waxman. 

Mr. PITTS. Without objection, so ordered. 

[The prepared statement of Mr. Waxman appears at the conclusion of the hearing.] 

5 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Today, we are here to discuss a special hiring authority available to the Department of Health and Human Services 

which is informally known as Title 42. The statute was created 

nearly 70 years ago to help the government recruit and retain the 

best and the brightest individuals in medicine, science, and other 

important fields. 

While we all wish it would be the case, a sense of civic duty is 

not always enough. This is something that I can certainly sympathize with, as I am sure many Members of Congress can, too. 

Young people want to come and dedicate their lives to public service, but sometimes the salary of Congress simply does not compete 

with the private sector. And that is why the House Administration 

created the Student Loan Repayment Program, which serves as an 

incentive to recruit and retain bright, young professionals to work 

for us in Congress. 

But, today, we will specifically hear from GAO about the recent 

studies that shed light on improvements that can be made to the 

Title 42 process. In fact, HHS even recognized the need to examine 

their hiring practice on their own prior to GAO, and they started 

an internal review back in 2010. They also currently implement a 

number of changes in response to this study and support its recommendations. 

But I just wanted to say to my colleagues, let’s tread carefully 

during this discussion. We must not react negatively simply for politics’ sake. It is good to be concerned, and it is certainly fair for this 

committee to maintain its oversight responsibilities, but this statute has been used by Democrats and Republicans alike, and it is 

critical to the quality and caliber of the work of the Department. 

If we were to somehow restrict HHS’s good work that has come 

about because of Title 42, we could be doing serious harm to the 

research in this country, both in terms of our ability to respond to 

public health emergencies like H1N1 and to drive toward the scientific breakthroughs like sequencing the human genome. 

The agencies listed in the GAO report are devoted to enhancing 

health, lengthening life, and reducing the burdens of illness and 

disability, as well as protecting all Americans from significant 

risks, whether these risks are from illness, the environment, or bioterrorism. 

NIH, as we know, is the premier biomedical research institute in 

the world. CDC, also an agency listed in the report, is globally renowned as a leader in disease prevention and health equity. Without dedicated funding of these agencies and top talent within their 

ranks, the U.S. would not be the leader in the biomedical and pharmaceutical industry, the global leader in disease prevention and 

public health, or a leader in the fight against devastating diseases 

such as cancer, obesity, and HIV. 

Now, using NIH as an example, NIH is the driving force behind 

the biomedical research that has advanced and continues to improve the health of Americans and grow the U.S. Economy. Thanks 

in large part to NIH research, Americans are living longer, living 

healthier, and suffering less from morbidity and mortality of countVerDate Aug 31 2005 09:59 Feb 06, 2014 Jkt 037690 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\PROGRA~1\WS_FTP\86287.TXT WAYNE
6 

less diseases when compared to the past. Not only has the general 

health of the Nation been improved, but these gains have added an 

estimated $3.2 trillion annually to the U.S. economy since 1970. 

Yet it seems that we continue to ask NIH and CDC to do more 

with less. In the current climate, we are doing well if the budgets 

of these agencies just stay the same. Our reliance on their service 

has grown as new public health and environmental threats emerge 

and the burden of disease grows. 

NIH employs nearly 19,300 civil servants in its workforce. Of 

those who are hired under Title 42, 44 percent are researchers and 

clinicians, and less than 2 percent of all NIH employees are paid 

above the general Federal schedule. 

Meanwhile, the American Academy of Medical Colleges releases 

an annual report which describes compensation for professionals in 

the medical and research fields. And consider that an associate professor in radiology can make $430,000, while a department chair 

can make over $650,000 per year, a professor in plastic surgery can 

make over $650,000, and the department chief, more than 

$800,000. 

HHS’s current policy caps compensation at $275,000 unless an 

exception is approved by the Secretary. And a recent CBO report 

found that Federal workers with a professional degree or doctorate, 

which is currently a requirement for Title 42, earned about 23 percent less than their counterparts in the private sector. 

I just think it is important to keep in mind the types of people 

we would be affecting if we restrict Title 42. Let me mention Dr. 

Fauci, director of the National Institute of Allergy and Infectious 

Disease at NIH. He is the recipient of the Presidential Medal of 

Freedom, has been fighting a battle against HIV and AIDS since 

the epidemic began. He is recognized around the world as one of 

the greatest scientific minds of our generation. In 2003, there was 

an Institute for Scientific Information study that showed that over 

the 20-year period from 1983 to 2002, Dr. Fauci was the 13th most 

cited scientist among 2.5 million to 3 million authors in all disciplines and that he was the 10th most cited HIV–AIDS researcher 

in the period 1996 to 2006. And he is compensated under Title 42. 

So I am just pointing out that we really have to be careful what 

we do here. I look forward to the discussion. I welcome our witnesses. I thank the Department, you know, for their input on this. 

But I do think we have to watch what we do, because I am concerned that we do not want to lose the best and the brightest. 

Thank you, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the chair emeritus of the full committee, Mr. Barton, 5 minutes 

foran opening statement. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Chairman Pitts. And I want to thank 

you and your staff and Dr. Burgess and his staff and Chairman 

Upton and his staff and my staff for working so diligently on this 

issue. 

The ranking member, my good friend from New Jersey, Mr. 

Pallone’s opening statement I thought was very good. He didn’t 

7 

state it, but he said that this might be about politics. Well, it is 

not. We have been investigating this for 3 years. You know, it is 

to Chairman Upton’s credit and Chairman Pitts’ credit that we finally have a full hearing just on this, unfortunately on a day when 

we have a bill on the floor that a lot of our members are engaged 

with concerning Solyndra. 

But this is an important issue. We do want the best and the 

brightest, as Congressman Pallone just said, those that could find 

revolutionary cures for some of the dreaded diseases that we have 

been fighting so long. We want those scientists to work for the 

Health and Human Services and the National Institutes of Health. 

That is why Congress originally passed this legislation a number 

of years ago, to give special hiring authority so that we could get 

in those exceptional cases the best and the brightest. 

The bill that I have introduced doesn’t eliminate that. It still allows a large number of exemptions to hire those very special people. 

What has happened, though, Mr. Chairman, is that what was a 

well-intentioned piece of legislation 70 years ago has been used as 

a loophole to create an alternative pay scale. This special hiring authority that we commonly call Title 42 has become commonplace. 

It is almost an alternative pay scale, not just a special pay scale. 

Nearly 25 percent—25 percent—one out of four, of NIH employees 

are hired under Title 42. 

Mr. Pallone alluded to the director of NIH, who is an exceptional 

individual and is worth a lot more than we are paying him. But 

he is one of 6,500, you know? That is the problem. Not that we 

hired these extremely exceptional people under Title 42; it is that 

we hire thousands of people who are very competent, very qualified, but I doubt that they are all as exceptional as Dr. Fauci is. 

Ten percent of all HHS employees—10 percent of all HHS employees are hired under Title 42. Believe it or not, even the Environmental Protection Agency is now using Title 42 to hire I think 

somewhere in the neighborhood of 25 people. That is just not acceptable, Mr. Chairman, in a time when we have budget deficits of 

over a trillion dollars every year. 

Title 42 was not created to create an alternative pay scale. It was 

not created to inflate unnecessarily government salaries. Legislation, in my opinion, is needed to rein this in. 

H.R. 6214 is not a draconian, slash-and-burn piece of legislation. 

It does limit the use of the provision of Title 42 to HHS; that 

means the EPA can’t use it. I think that is common sense. It would 

cap the number of hires under this authority to 5 percent. Now, 5 

percent is hardly, you know, earth-shattering. That is still, at 

60,000 people, 5 percent is 3,000 people. So surely within that 

3,000-person cap we can get the best and the brightest if we need 

to. 

It would ensure that compensation under Title 42 does not exceed 150 percent of the Executive Level 1 pay scale under Section 

5312, Title 5 of the regular government employee compensation 

scale. 

It would allow, no matter what the general pay scale is, up to 

50 people, at the discretion of the Secretary of HHS, to be paid 

without regard to compensation limit—up to 50. So if we get an AlVerDate Aug 31 2005 09:59 Feb 06, 2014 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\PROGRA~1\WS_FTP\86287.TXT WAYNE
8 

bert Einstein or if we get somebody who literally has the cure for 

cancer, if the Secretary wants to pay that individual, I don’t know, 

a million dollars, this piece of legislation would allow that to happen, but only up to 50 employees. 

The bill also would require an annual report to the Congress detailing the use of Title 42 and an enumeration of those that were 

receiving Title 42 compensation. 

So, Mr. Chairman, this is an issue that the subcommittee has 

been looking at for a number of years. It is an issue that I requested a GAO report on several years ago, which we are about to 

get the executive summary given to us. And hopefully this is a bill 

that, on a bipartisan basis, in the very near future we can move 

in some shape, form, or fashion. 

I will say this—I know my time has expired. If there are tweaks 

to the bill and our minority friends want to change some of it, I 

am open to it, and I would expect that Mr. Pitts and Mr. Upton 

also would be. And we encourage our NIH and HHS officials to 

work with us to perfect this bill. 

And, with that, I yield back. 

Mr. PITTS. The chair thanks the gentleman. 

Now, standing in for the ranking member of the full committee, 

the gentlelady from Illinois, Ms. Schakowsky, is recognized for 5 

minutes. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

In order to improve our Nation’s health and wellbeing and to 

stay competitive in the global marketplace, it is pretty clear to me 

that our government needs to recruit top talent in research and development. Title 42 has allowed us to bring in our Nation’s top scientists to apply their expertise to discoveries that improve health 

and save lives. It is vital that our Federal agencies have the authority to recruit and retain vital scientific talent. 

The Department of Health and Human Services, and in particular NIH, has cited difficulties in recruiting and retaining top individuals in medicine, science, and other critical fields. As a result, 

our government has made an effort to bridge skill gaps that threaten our agencies’ ability to meet their missions. 

Even prior to this report—and I want to underscore that—even 

prior to this report, HHS has been diligently working on improving 

its Title 42 hiring process. HHS recently implemented a policy that 

capped annual base salaries, clarified the definition of scientific positions for the purpose of Title 42 hiring, and use of a streamlined 

recruitment process to ensure that all other hiring authorities have 

been exhausted before Title 42 was used. 

I am also pleased that NIH has heeded GAO’s recommendations 

and is working to incorporate them into their Title 42 changes. 

While I agree that it is important in our oversight role to ensure 

that NIH does not abuse this authority, an ill-advised effort to 

statutorily cap all pay under Title 42 or to cap HHS’s ability to use 

Title 42, such as in H.R. 6214, would have a detrimental effect on 

critical government research. 

9 

Our Nation’s top scientists could make significantly more in comparable private-sector jobs. When they agree to apply their skills 

and expertise to the public sphere, the American people benefit 

from their work. Congress must ensure that our government’s esteemed research institutions are able to attract top talent, and, to 

do so, Title 42 funding should not be subject to an arbitrary cap. 

I look forward to hearing the testimony from our witnesses concerning how HHS can build upon their work to modify its Title 42 

policy, to work with my colleagues across the aisle to make sure 

that there are no abuses of this authority, and to ensure that the 

appropriate use and documentation of this important authority is 

available to us. 

And I thank you, Mr. Chairman. And I yield back. 

Mr. PITTS. The chair thanks the gentlelady. 

All the other opening statements of the Members will be made 

a part of the record. 

I would like to introduce today’s witnesses. 

Mr. Robert Goldenkoff is the director of strategic issues for the 

Government Accountability Office. 

Welcome. 

Mr. Robert Cramer is the managing associate general counsel, 

also with the Government Accountability Office. 

Your written statements will be made part of the record. Thank 

you both for being here today. 

And, Mr. Goldenkoff, you are now recognized for 5 minutes for 

a summary of your testimony. 

STATEMENT OF ROBERT GOLDENKOFF, DIRECTOR, STRATEGIC ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE; 

ROBERT CRAMER, MANAGING ASSOCIATE GENERAL COUNSEL, GOVERNMENT ACCOUNTABILITY OFFICE 

STATEMENT OF ROBERT GOLDENKOFF 

Mr. GOLDENKOFF. Thank you. 

Chairman Pitts, Ranking Member Pallone, members of the subcommittee, thank you for the opportunity to be here today to discuss Title 42, a special hiring authority used exclusively by the Department of Health and Human Services and the Environmental 

Protection Agency to help them overcome difficulties in recruiting 

and retaining individuals in medicine, science, engineering, and 

other fields. 

The two agencies use the higher salaries and other flexibilities 

available under Title 42 to make them more competitive in the 

labor market for individuals in these highly specialized fields and 

more agile in meeting their mission requirements. 

Joining me today is Robert Cramer, GAO’s managing associate 

general counsel. As requested, our remarks will focus first on the 

extent to which HHS and EPA have used Title 42 to appoint and 

set pay for employees since January 2006; and, second, whether 

those appointments followed applicable internal controls. We were 

also asked to determine whether there were any statutory pay caps 

for individuals appointed under Title 42. 

Overall, HHS’s use of Title 42 has increased from 5,361 positions 

in 2006 to 6,697 positions in 2010, an increase of around 25 perVerDate Aug 31 2005 09:59 Feb 06, 2014 Jkt 037690 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\PROGRA~1\WS_FTP\86287.TXT WAYNE
10 

cent. HHS officials attributed this increase in Title 42 employees 

to, among other factors, the agency’s response to urgent public 

health matters. For example, HHS officials said they used Title 42 

to quickly hire experts needed to develop a vaccine in response to 

the H1N1 flu pandemic of 2009. Nearly all of HHS’s Title 42 employees work in one of three operating divisions: NIH, FDA, and 

the CDC. 

In implementing Title 42, HHS and EPA can set base pay as 

high as $250,000. In comparison, most Federal employees are paid 

under the general schedule, where the highest base pay amount 

was $155,500 in 2010, a threshold known as Executive Level 4. 

That same year, more than a fifth of HHS’s Title 42 employees had 

a base salary that exceeded that Executive Level 4. 

Importantly, special hiring authorities need adequate internal 

controls to ensure agencies use them cost-effectively. However, 

HHS lacks reliable data to manage and oversee its use of Title 42. 

As one example, because of shortcomings with its personnel database, it was difficult for HHS to provide accurate head counts of 

its Title 42 employees to us and to Congress. 

For its part, since 2006, EPA has used Title 42 to appoint 17 employees, 15 of which earned over $155,500 in 2010. EPA appointment and compensation practices were generally consistent with its 

guidance; however, EPA does not have post-appointment procedures in place to ensure Title 42 employees meet ethics requirements to which they have previously agreed. 

In our report on which this testimony is based, we made recommendations to HHS to strengthen its oversight and management of its Title 42 authority and a recommendation to EPA to improve enforcement of its ethics requirements. HHS agreed with our 

recommendations, while EPA disagreed, citing actions it had already taken. We acknowledge the EPA’s plans to address these 

issues but maintain that the recommendation was needed to ensure implementation of tighter ethics provisions. 

I will turn now to my colleague, Bob Cramer, who will discuss 

the extent to which statutory pay caps apply to certain Title 42 appointments. 

STATEMENT OF ROBERT CRAMER 

Mr. CRAMER. I am pleased to be here to discuss our legal opinion 

concerning pay caps for consultants appointed pursuant to Title 42 

of the United States Code. 

At the outset, let me say that this was a very difficult issue. It 

required us to analyze laws that have been enacted over the course 

of many years, from 1923 to 2009. Laws we analyzed are in different pay systems, and we encountered challenges in attempting 

to resolve ambiguities arising from pay laws enacted at different 

times over those many years, nearly 90. 

What we did find was that a provision in a 1993 appropriations 

act established a permanent cap on the pay of individuals appointed on a limited-time basis under Title 42 at all the public 

health agencies except three. The cap currently limits base pay to 

$155,500. The permanent cap in the 1993 appropriation actually 

originated back in 1956, when Congress first enacted it. Congress 

11 

included it again in every appropriation until 1993, each year, but 

in 1993 it made it permanent. 

Now, in 1956, when the Public Health Services regulations included time limitations on employment of all consultants—so everyone had a limited-time appointment, so the appropriation cap 

applied to everyone. But in 1966 the regulations changed and the 

time limitation was removed. But when Congress enacted the appropriation cap in 1967 and in each of the following years, it continued to apply the cap only to those consultants appointed for limited periods of time. 

We also examined two pay caps found in Title 5. The first of 

these is Section 3109, which limits pay for temporary consultants. 

In 1992, Congress directed OPM to prescribe regulations to administer 3109, and OPM’s regulations provide that 3109 does not 

apply to consultants under Title 42. Under the law, this interpretation is entitled to considerable weight since OPM is the agency 

charged by Congress with administering 3109. Moreover, OPM’s interpretation is consistent with actions of Congress, which have signaled that 3109 does not apply to the Title 42 consultants. 

Since 1970, the appropriation acts for HHS have contained separate provisions placing identical compensation limits for consultants subject to 3109 and for Title 42 consultants appointed for limited periods of time. Obviously, identical provisions would be unnecessary if Congress believed that 3109 applied to the Title 42 

folks. 

The other pay cap that we considered is Section 5373 of Title 5. 

It caps pay at level 4 of the executive schedule, currently $155,500 

also. 

In deciding that 5373 does not apply to Title 42 consultants, we 

were again guided by congressional actions. For example, after 

5373 was enacted, Congress enacted the permanent pay cap that 

I spoke of before, which limits pay for Title 42 limited-time appointments to Executive Level 4. This provision would not have 

been necessary if Congress believed that the pay cap in 5373 applied, since it also limits pay to Executive Level 4. 

Additional evidence that 5373 does not apply to Title 42 is provided by Congress’ actions when it extended the authority to EPA. 

Our review of the legislative history at the time indicates that EPA 

and HHS each informed Congress during the legislative process 

that they did not apply the 5373 cap to the Title 42 consultants. 

In conclusion, if Congress wants to establish upper limits for appointments under Title 42, you may wish to consider, as indeed you 

are, enacting legislation to specifically enact such limits. 

That concludes our statements, and Mr. Goldenkoff and I would 

both be happy to answer any questions you may have. 

[The prepared statement of Mr. Goldenkoff and Mr. Cramer follows:] 

12 


86287.002

GAO 

For Release on Delivery 

Expected at 10:00 a.m. EDT Friday, September 14, 2012 

GAO-12-1035T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on Health, 

Committee on Energy and Commerce, 

House of Representatives 

HUMAN CAPITAL 

The Department of Health 

and Human Service's and 

Environmental Protection 

Agency's Use of Special Pay 

Rates for Consultants and 

Scientists 

Statement of 

Robert Goldenkoff, 

Director, Strategic Issues 

Robert Cramer 

Managing Associate General Counsel 

GAO 

Accountability * Integrity * Reliability 
13 


86287.003
14 


86287.004

Chairman Pitts, Ranking Member Pallone, Members of the 

Subcommittee, 

Thank you for the opportunity to be here today to discuss a special hiring 

authority used by the Department of Health and Human Services (HHS) 

and the Environmental Protection Agency (EPA) to help them overcome 

difficuHies in recruiting and retaining individuals in medicine, science, 

engineering, and other fields in support of their missions. One reason for 

these difficulties, according to agency officials, is that salaries available 

under typical federal government hiring authorities are not always 

competitive with those in the private sector for individuals in these highly 

specialized fields. Since 2001 , we have designated strategic human 

capital management a government-wide high-risk area in part because of 

the need to address current and emerging critical skills gaps that are 

undermining agencies' abilities to meet their missions. 1 Effective use of 

various human capital flexibilities such as special hiring authority is one 

way agencies can be more competitive in the labor market for top notch 

employees. At the same time, adequate internal controls are needed to 

ensure the flexibilities are used cost-effectively and in accordance with 

applicable laws and agency guidance. 

One such human capital flexibility that is available only to HHS and EPA 

is known informally as Title 42 because it is provided under 42 U.S.C. 

§§209(1) and 209(g).2 Section 209(1) authorizes the employment of 

special conSUltants to assist and advise in the operation of HHS's Public 

Health Service (PHS), while section 209(g) authorizes fellowships in the 

PHS for scientists who may be aSSigned to studies and investigations for 

the term of their fellowships. 3 In 2005, Congress provided EPA with the 

authority to use section 209 to make a limited number of appointments in 

its Office of Research and Development. Congress initially granted this 

authority to EPA for fiscal years 2006 through 2011, but Congress 

amended the authority twice and currently EPA is permitted to employ up 

High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: Feb. 2011). 

2HHS has other special hiring authorities provided under Title 42 of the U.S. Code, but this 

testimony deals exclusively with the special hiring authorities under 42 U.S.C. §§ 209 (Q 

and (g). 

3The PHS is comprised of most operating divisions within HHS-inc!uding the National 

Institutes of Health, the Food and Drug Administration and the Centers for Disease 

Control and Prevention-as well as some staff divisions within the Office of the Secretary. 

Page 1 GAD-12-1035T 
15 


86287.005

to 30 persons at anyone time through fiscal year 2015. HHS has used 

sections 209(1) and (g) and EPA has used section 209(g) to appoint 

individuals from the private sector and academia as well as to convert 

federal government employees under other pay systems-such as the 

General Schedule-to Title 42. 

In implementing Title 42, HHS and EPA can set higher pay limits than 

those provided under typical civil service hiring authorities. According to 

HHS and EPA officials, the pay setting flexibility is needed to compete 

with the private sector and academia to recruit and retain critical 

personnel. For example, the highest base pay amount in the General 

Schedule in 2012 is $155,500. In comparison, per HHS policy, the annual 

base salary for many appointments under Title 42 at HHS cannot exceed 

$250,000 per calendar year, with total compensation not to exceed 

$275,000 unless approved by the Secretary.4 Similarly, EPA policy caps 

annual base salary for Tille 42 employees at $250,000, with total 

compensation that may not exceed $275,000. As discussed below, under 

certain types of Tille 42 apPOintments, statutory pay caps may apply. 

To obtain a better understanding of the appointment and compensation 

practices under sections 209(1) and 209(g), we were asked to review the 

ex1ent to which HHS and EPA have (1) used the authority under sections 

209(1) and (g) 10 appoint and set pay for employees since January 2006, 

and (2) followed applicable agency policy, guidance, and internal controls 

for appointments and compensation. 5 We were also asked to determine 

whether there are any statutory caps on pay for conSUltants and scientists 

appointed under sections 209(1) and (9). This testimony is based on our 

report (GAO-12-692) and related legal opinion (B-323357) issued in July 

2012 that both addressed the questions above. 

4The salary and compensation limits were lowered in HHS policy issued in February 2012. 

In March 2007, HHS limited annual base salary for employees hired under section 209(f) 

to $350,000 and $375,000 in total compensation. These higher limits were in place during 

most years of our review of HHS's Title 42 use (2006 through 2010). Total compensation 

at HHS indudes base pay; recruitment and retention incentives; and cash awards, such 

as performance bonuses. 

5According to HHS human resource officials, personnel data prior to 2006 were likely not 

reliable for our analysis. EPA began using Title 42 in 2006. HHS data are available 

through the end of 2010, the last year of complete data available at the time we did our 

study; and at EPA. through the end of 2011. 

Page 2 GAO.12·1035T 
16 


86287.006

HHS Has Increased Its 

Use of Title 42, but 

More Reliable Data 

Could Improve HHS's 

Oversight 

For the report and legal opinion, we analyzed agency Title 42 data, 

interviewed agency officials, and conducted file reviews. 6 Details on our 

objectives, scope, and methodology are contained in those two products. 

The audit work upon which this statement is based was conducted in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

During calendar year 2010, HHS had 6,697 employees who were 

appointed under sections 209(1) or (g).7 All but 27 of these employees 

served at the National Institutes of Health (NIH), the Food and Drug 

Administration (FDA), or the Centers for Disease Control and Prevention 

(CDC), while the remaining employees served in the Office of the 

Secretary or within other operating divisions, as shown in figure 1. 

eSee GAO, Human Capital: HHS and EPA Can Improve Practices Under Special Hiring 

Authorities. GAO-12-692 (Washington. D.C.: July 9, 2012), and GAO. Pay for Consultants 

and Scientists Appointed under Title 42.8-323357 (Washington. D.C.: July 11, 2012). 

7 AU years are in calendar years unless otherwise stated. 2010 data was the last year of 

complete HHS data available at the time of the study. 

Page 3 GA0-12·1035T 
17 


86287.007
18 


86287.008

Title 42 Employees Serve 

in Various Functions 

NIH relied on the use of Title 42 authority for a substantial portion-44 

percent-of its total research and clinical practitioner workforce. 

Table 1: NIH Relied on Title 42 for a Greater Percentage of its Total Workforce and 

Research and Clinical Practitioners than FDA and CDC, 2010 

Tille 42 Titie42 

Total percentage of Total percentage of 

operating total operating researchers researchers 

Tille 42 division division and clinical and clinical 

Agency employees workforce workforce practitioners practitioners 

NIH 4,879 19,292 25 11,040 44 

FDA 862 14,617 6 10,025 9 

CDC 929 9.707 10 5,817 16 

SOllrce GAO ana~is of HHS and QPM's Central Personnel Data F!I<I data 

Title 42 employees at HHS serve in a variety of functional areas, including 

scientific and medical research support and in senior, director-level 

leadership positions, Base salary ranges for Title 42 employees varied by 

operating division and occupation. In 2010, almost 60 percent of Title 42 

employees at NIH served in one of five general occupations: staff 

scientist, research fellow, senior investigator, clinical research nurse, and 

clinical fellow, Table 2 describes some of the general responsibilities and 

duties, and salary data for these occupations at NIH, 

PageS GAO-12-10l5T 
19 


86287.009

Table 2: Most Common Title 42 Occupations at NIH and Characteristics 

Occupation (number of Title 42 

employees in 20i0) 

Staff Scientist (1,103) 

Research Fellow (666) 

Senior Investigator (521) 

Clinical Research Nurse (347)c 

Clinical Fellow (249) 

Characteristics 

Supports the long-term research of a senior 

investigator and independently designs 

experiments, but does not have 

responsibilities for initiating new research 

programs 

Scientists obtaining experience in biomedical 

research while providing a service relevant 

to the NIH's program needs 

Has been granted tenure. b 

Some senior investigators are assigned 

organizational responsibilities in the institute 

or center, that is, section or branch chief 

Specializes in the care of research 

participants and is responsible for assuring 

participant safety, formulating patient care 

plans, integrity of protocol implementation, 

accuracy of data collection, and recording 

Participates in protocol-based clinical 

research (i.e., research with people serving 

as volunteer participants) as weI! as 

laboratory research 

Source: GAO analysis of HHS data and documents 

Salaryll 

Base salary range: $82,000·200,000 

Average base salary: $118,000 

Median base salary: $114,000 

Base salary range: $45,000-112,000 

Average base salary: $70,000 

Median base salary: $69,000 

Base salary range: $117,000·350,000 

Average base salary: $192,000 

Median base salary: $195,000 

Base salary range: $62,000-96,000 

Average and median base salary: 

$78,000 

Base salary range: $57,000-137,000 

Average base salary: $84,000 

Median base salary: $82,000 

aSalary figures as of 201 O. AU figures are rounded to the nearest thousand dollars. 

bTenure at NIH differs from tenure at an academic institution. Tenure at NIH is defined as the longw 

term commitment of salary, personnel, and research resources needed to conduct an independent 

research program within the scope of the institutes' missions, and subject to regular review. Tenure 

may be conferred on Title 42 employees despite the nonpermanent nature of the position. 

CAs part of the sunsetting of the Clinical Research Support pilot, NtH is currently phasing out Title 42 

appointments for nurses. 

At FDA and CDC, the most common occupation of Title 42 employees is 

a fellow. In 2010,340 (40 percent) of FDA's Title 42 employees were staff 

fellows. These positions are for promising research and regulatory review 

scientists. FDA staff fellows' base salary range in 2010 is approximately 

$42,000 to $224,000, with an average base salary of about $96,000 and 

a median salary of about $92,000. According to FDA policy, total 

compensation for staff fellows may not exceed certain pay limits 

($155,500 in 2010) unless the FDA Director of Human Resources and 

Management and Services grants an exception, Three of 340 staff fellows 

at FDA earned more than $155,500 in 2010. 

Page 6 GAO·12·103ST 
20 


86287.010

Some Title 42 Employees 

Are Paid Above Executive 

Salary Levels 

Of CDC's Title 42 employees in 2010, 687 (74 percent) were senior 

service fellows or associate service fellows appointed to study areas such 

as basic and applied research in medical, physical, biological, 

mathematical, social, biometric, epidemiological, behavioral, computer 

SCiences, and other fields directly related to the mission of CDC. Senior 

service fellows had a base salary range in 2010 of approximately $49,000 

to $155,500, with an average base salary of about $103,000 and a 

median salary of about $100,000. Associate service fellows had a base 

salary range of approximately $44,000 to $93,000, with an average base 

salary of about $69,000 and a median salary of about $71,000. 

The average base salary for all HHS Title 42 employees in 2010 was 

about $116,000 and the median salary was about $101,000. More than 

one-fifth of all Title 42 employees at HHS, however, earned a base salary 

above Executive Level IV ($155,500 in 2010). There were Title 42 

employees that earned above $155,500 at NIH, FDA, and CDC. 

Table 3: HHS Title 42 Employees with Base Salaries within or Exceeding Federal 

Executive Salary Levels, 2010 

Executive level 

At or above Executive Levell ($199,700) 

Within Executive Levels I and" ($179,700·199,699) 

Within Executive Levels II and III ($165,300·179,699) 

Within Executive Levels III and IV ($155,500·165,299) 

Total 

Source: GAO analysis of HHS data, 

Number of Title 42 

employeesa 

629 

319 

295 

218 

1,461 

aThe remaining 5.236 Title 42 employees had salaries below Executive Level IV ($155,500) 

HHS officials said compensation flexibility helps HHS compete with the 

private sector and academia to hire and retain highly qualified employees 

with rare and critical skill sets. Officials further stated the salaries HHS 

can offer to its top researchers are often not commensurate with private 

sector salaries. However, they said the higher compensation limits under 

Title 42 combined with other benefits-such as name recognition and 

access to advanced research equipment and technology not often 

available in the private sector or academia-can help offset 

compensation disparities and make HHS attractive to researchers, 

doctors, and scientists. 

Page 7 GAO·12-1035T 
21 


86287.011

HHS Does Not Have 

Reliable Data on the Use of 

its Title 42 Authority 

HHS Did Not Consistently 

Adhere to Sections of its 

Title 42 Policy and Lacks 

Guidance for Some 

Authority Provisions 

Our analysis of HHS data found thousands of cases where the section 

authority applicable to the Title 42 appointment (section 209 (f) or (g)) 

was not recorded in the HHS central personnel transaction system. 

Although HHS relies on Title 42 authority to fill some of its most critical 

scientific and medical research positions, the lack of complete data and 

guidance may limit the agency's ability to strategically manage the use of 

the authority. For example, the lack of section authority data in its 

personnel system has made it difficult for HHS to provide accurate 

headcounts of employees hired under sections 209(f) or (g) and resulted 

in HHS overstating the number and operating division of its employees 

hired under these sections to oversight bodies, including Congress, and 

in response to our audit. HHS also erroneously reported appointments 

made under sections 209(f) and (g) that would have been prohibited by 

law, indicating the agency's data management practices may preclude 

effective oversight of the program and workforce planning. Effective 

oversight is particularly important in light of HHS's increasing use of Title 

42 and the number of employees earning salaries higher than most 

federal employees. 

To address this issue, we recommended that HHS ensure section 

authority-sections 209(f) or (g)-be consistently entered in appropriate 

automated personnel systems, such as making section authority a 

required, drop-down field in its personnel system where this information is 

initially entered. HHS agreed with our recommendation and stated that, 

as it moves forward with the implementation of a new human resources 

system, it will explore the possibility of using a drop-down field to enter 

Title 42 section authority. HHS also said that its Office of Human 

Resources will continue to work with Operating and Staff DiviSions to 

ensure that Title 42 personnel actions are processed in a consistent and 

accurate manner. 

HHS did not consistently adhere to certain sections of its policy for hiring 

and converting employees under section 209(f). For example, 

Special consultants may only be appointed under section 209(f) to fill 

scientific positions; however, the policy included no formal criteria and 

did not define "scientific." We reviewed the statement of duties for 28 

section 209(f) cases and found in 5 cases that it was unclear the 

position was SCientific. 

Appointments can only be made after other available personnel 

systems have failed to yield candidates that possess critical scientific 

PageS GAO·12-1035T 
22 


86287.012

expertise. These recruitment and retention efforts, according to the 

policy, are to be documented prior to making an appointment under 

section 209(1). In only 5 of the 28 section 209(1) case files we 

reviewed was there documentation showing HHS considered other 

personnel systems before using Title 42. 

209(1) policy also includes guidance for converting employees from 

other pay systems into special consultant positions under Title 42. 

The policy states conversions are only to be used in exceptional 

circumstances and employees may only be converted to the Title 42 

program if they meet all conversion criteria, such as providing 

leadership in a field equivalent to a full-tenured professor in academia 

and recognition as a national or international expert in the field. In our 

case reviews of six conversions to section 209(1), two cases met each 

of the requirements for converting employees. For other case files we 

reviewed, documentation provided by HHS did not support the basis 

for conversion. 

In August 2010, HHS's Office of Human Resources reviewed the 

agency's use of section 209(1) authority and found two issues similar to 

those found in our review. Recommendations from the audit report 

became the basis for a new 209(1) policy, which was issued in February 

2012.· Significant changes to the 209(1) policy include a definition of 

"scientific position"; a requirement that the same recruitment plan be used 

for both Title 5 and Title 42 employees to demonstrate that other available 

personnel systems failed to yield qualified candidates, and identifies 

specific positions and/or categories of positions at NIH that may be filled 

through section 209(1) without "exhausting" other recruitment mechanisms 

or authorities. 

While these changes to 209(1) policy are a step in the right direction, they 

still do not address the need to strengthen documentation to better 

support the use of Title 42. Therefore, we recommended that HHS, as 

part of its effort to implement new section 209(1) guidance, systematically 

document how policy requirements were fulfilled when hiring or 

converting 209(1) employees. HHS agreed with our recommendation and 

stated that its updated policy was, in part, due to our findings. 

Human Resources Manual, Instruction 42·1: Appointment of 42 U.S.C. § 209(D 

Special Consultants (Feb. 15,2012). 

Page 9 GAO·12·1035T 
23 


86287.013

For appointments made under Title 42, section 209(g), HHS has no 

agencywide implementing policy for appointing and compensating 

employees hired as fellows, including detailS about what documents are 

needed to support the basis for appOintments and compensation. We 

have previously reported that agencies should have clearly defined, welldocumented, transparent, and consistently applied criteria for appointing 

and compensating personnel. 9 In lieu of guidance from HHS, the 

individual operating divisions established their own policies and guidance 

for appointing and compensating fellows under 209(g), each with different 

levels of detail, compensation limits, and documentation reqUirements. 

The lack of an HHS-wide policy poses the risk that compensation 

decisions for section 209(g) fellows at HHS may not be made consistently 

across operating divisions. Although some guidance exists at the 

operating division level for setting compensation targets, in 11 of the 20 

case files we reviewed of section 209(g) fellows, we found either no or 

insufficient documentation to support the basis for compensation. Without 

an agencywide pOlicy, an agency cannot be assured that it is allocating its 

resources most appropriately. 

Therefore, we recommended that HHS, as part of its ongoing effort to 

develop agencywide policy for appointing and compensating employees 

hired under section 209(g), ensure the policy requires and provides 

guidance for documenting the basis for employee compensation. HHS 

agreed with our recommendation and stated that the section 209(g) policy 

will be implemented in the near future. 

A Model of Slrategic Human Capital Management. GAO-02-373SP (Washington. 

15.2002). 

Page 10 GAO-12-103ST 
24 


86287.014
25 


86287.015

According to EPA officials, the agency has identified mission critical 

personnel needs and is actively recruiting to fill the 13 remaining 

authorized Title 42 positions. The agency has no plans to use authority 

under section 209(f) at this time, but may consider it in the future. Officials 

told us EPA would need to develop guidance for implementing section 

209(1) before using the authority." 

Title 42 fellows at EPA lead scientific research initiatives, are considered 

experts in the related scientific discipline, and some manage or direct a 

division or office. According to EPA officials, Title 42 provides two 

important tools EPA needs to achieve its mission: (1) the flexibility to be 

competitive in recruiting top experts who are also sought after by other 

federal agencies, private industry, and academia; and (2) the appointment 

flexibility needed to align experts with specific skills to changing scientific 

priorities. EPA officials stated it is not the agency's intention to hire a 

fellow long-term under Title 42, but rather employ the individual as long 

as a priority remains high. 

Annual salaries for Title 42 fellows at EPA range from approximately 

$153,000 to $216,000, with an average salary of about $176,000 and a 

median salary of about $171,000. As shown in table 4,15 of the 17 EPA 

fellows had salaries exceeding Executive Level IV. 

Table 4: Number of EPA Title 42 Fellows with Salaries in Federal Executive Salary 

Levels, 2010 

Executive level Number of fellows 

At or above Executive Levell ($199.700) 

Within Executive levels I and II ($179J700~199,699) 

Within Executive Levels" and III ($165.300-179,699) 

Within Executive Levels III and IV ($155.500-165.299) 

Below Executive Level IV ($155.500) 

Source' GAO analysIs of EPA data 

response to a National Academy of Sciences National Research Council report in 

2000, EPA modeled its Title 42 program after the NIH program. NIH had already 

implemented its program and many structural aspects of the program are similar. 

5 

Page 12 GAO-12-1035T 
26 


86287.016

In December 2010, EPA began a pilot of using market salary data to 

estimate salaries of what Title 42 candidates could earn in positions 

outside of government given their education, experience, professional 

standing, and other factors. EPA used the market salary data to inform 

salary negotiations for the five fellows appOinted since the implementation 

of the pilot. According to EPA officials, the market salary pilot concludes 

in December 2012 and its effect will be analyzed at that time. 

In appointing Title 42 fellows, EPA generally followed appointment 

guidance described in its Title 42 Operations Manual. EPA could, 

however, improve procedures for resolving potential conflicts of interest. 

We conducted 10 case file reviews of EPA Title 42 employees and in two 

cases we reviewed, employees had potential conflict of interest situations 

arise after appointment resulting, in part, from the agency's failure to 

ensure Title 42 employees followed agreed upon ethics requirements. 

EPA acknowledged il could improve its poslappointment ethics oversight 

and reported it has plans 10 ensure that Title 42 employees follow 

requirements such as submitting confirmation of slock divestitures to its 

General Counsel, for example, and other ethics requirements. However, 

at the time of our review, EPA had not provided us with implementation 

plans or timeframes for its improved oversight. 

To address this issue, we recommended that EPA, as part of its efforts to 

improve postappointment ethics oversight, develop and document a 

systematic approach for ensuring Title 42 employees are compliant with 

ethics requirements after apPOintment. EPA disagreed with our 

recommendation, citing certain actions already taken, such as a plan to 

require proof of compliance with ethics agreements. We acknowledged 

EPA's plans to address these issues, but maintained the recommendation 

was needed to ensure implementation because the two ethics issues we 

reported occurred over 2 years ago. 

Page 13 GAO-12·1035T 
27 


86287.017

Legal Opinion 

Whether There are 

Statutory Caps on Pay 

for Consultants and 

Scientists Appointed 

under Title 42 

Our legal opinion, issued on July 11, 2012, responded to a Congressional 

request for our views on whether there are statutory caps on pay for 

consultants and scientists appointed pursuant to 42 U.S.C. §§ 209(1) or 

(g).'2 We concluded that an appropriations law provision enacted as part 

of the Fiscal Year 1993 Labor-HHS-Education Appropriations Act 

established a permanent appropriation cap on the pay of individuals 

appointed on a limited-time basis under 42 U.S.C. §§ 209(1) or (g) at 

agencies funded through that Act. With regard to individuals not subject to 

this cap, we concluded further that two other pay limitations set forth in 

Title 5 of the U.S. Code that we considered do not apply to appointments 

made pursuant to 42 U.S.C. §§ 209(1) or (g). 

Federal pay systems are extremely complex, and we encountered 

challenges in attempting to resolve ambiguities arising from pay laws 

enacted at different times over nearly 70 years. Sections 209(1) and (g) of 

title 42 were enacted in 1944 and have not been amended since that 

time. There have, however, been many significant changes in related 

laws and regulations that were relevant to our consideration of the issues 

raised. Consequently, we conducted extensive research of legislative 

history to aid in our understanding of congressional actions and the 

interplay of the laws addressed below, and examined regulations issued 

pursuant to these provisions over the last 65 years. We also solicited the 

views of HHS, the Office of Personnel Management (OPM), and the EPA. 

The appropriations for each fiscal year from 1957 through 1993 included 

a cap on pay for 'consultants or individual scientists appointed for limited 

periods of time" (underscoring added) pursuant to 42 U.S.C. §§ 209(f) or 

(g). The appropriations for fiscal year 1993 established a permanent cap 

on such compensation, providing that pay may be set at rates not to 

exceed "the per diem rate equivalent to the maximum rate payable for 

senior-level pOSitions under 5 U.S.C. § 5376." This cap currently limits 

base pay to $155,500. Our review of the legislative history of the first 

appropriation to contain the limit indicated that it was enacted due to other 

restrictions in law on compensation as an increase over then-existing pay 

authority. 

July 11, 2012. 

Page 14 GAO·12·1035T 
28 


86287.018

We considered the meaning of the phrase "for limited periods of time," 

which has appeared in aU of the relevant appropriations provisions from 

1956 to 1993. In 1956, when this language was first included in the 

appropriations law, the Public Health Service's regulations included time 

limitations on employment. Thus the time limit generally applied to all 

consultant appointments made under section 209(1) beginning in 1947, 

when the regulation containing the limit was first promulgated, unless 

"special circumstances" led the administrator to approve an extension. 

Further, the limit was in effect in 1956, when the first appropriations law 

provision referring to consultants appointed for "limited periods of time" 

was enacted. 

However, this time limitation was removed from the regulations in 1966. 

31 Fed. Reg. 12,939 (Oct. 5, 1966). Therefore, the appropriations pay 

cap applied to all section 209(1) consultants from 1956 until HHS changed 

the regulations in 1966 allowing for the hiring of consultants for indefinite 

periods. 

Although the regulations implementing section 209(1) no longer included a 

time limitation on the employment of special consultants after 1966, the 

appropriations provisions for 1967 and subsequent years, using virtually 

identical language each year, imposed a cap only on pay of "consultants 

or individual scientists appointed for limited periods of time pursuant to 

[42 U.S.C. §§ 209(1) or (g)J." The appropriations restriction did not impose 

any cap on pay for those conSUltants whose appointments were not 

limited in time. As a result, after the 1966 regulations were promulgated 

and continuing to the present, HHS has employed two categories of 

consultants: those appointed for limited periods of time, to whom the pay 

cap applies, and consultants appointed for indefinite periods, to whom the 

pay cap does not apply. 

Importantly, the appropriations pay restriction is applicable only to 

payments made from Labor-HHS-Education Appropriations Acts. Three 

components of the Public Health Service (the Agency for Toxic 

Substances and Disease Registrations, the Food and Drug 

Administration, and the Indian Health Services) are funded by 

appropriations acts other than the Labor-HHS-Education Appropriations 

Act, and are not covered by a restriction on funds appropriated under that 

Act. Thus, we concluded that there is a cap of Executive Level IV on the 

pay of consultants and scientists employed for limited periods of time 

pursuant to 42 U.S.C. §§ 209(1) or (g) in all but three of the Public Health 

Service Agencies. 

Page 15 GAO·12·1035T 
29 


86287.019

With respect to individuals not covered by the appropriation cap, we 

examined the applicability of two pay limitations found in title 5: section 

3109, which limits pay for consultants "procure[d]" on a temporary or 

intermittent basis, and section 5373, which limits pay fixed by 

administrative action. 

Section 3109, enacted in 1946, establishes specific legal parameters, 

including a pay cap and a limit on appointment duration, governing the 

employment of experts or consultants whose appointment must be 

authorized by an "appropriation or other statute." That pay cap applies 

unless a different cap is authorized by the appropriation or another 

statute. 

Beginning in 1956, Congressional actions signaled that section 3109 did 

not apply to section 209(1) appointments. From1956 and continuing until 

1993, Congress enacted provisions yearly in appropriations acts that set 

a cap (which mayor may not have been higher than that found in section 

3109 in any given year) for all those appointed pursuant to sections 209(1) 

or (9) for a limited period of time and funded out of the Labor-HHSEducation Appropriations Act. From fiscal year 1970 until the provisions 

became permanent in fiscal year 1993, the appropriations acts for HHS 

contained separate provisions placing identical compensation limits for 

experts and consultants subject to 5 U.S.C. § 3109, and for consultants 

and scientists appointed for limited periods of time pursuant to 42 U.S.C. 

§§ 209(1) or (g). Identical provisions would have been unnecessary if 

Congress believed that the limitations in 5 U.S.C. § 3109 would apply to 

42 U.S.C. §§ 209(1) and (g) consultants or scientists. 

Further, in 1992, Congress added subsection (d) to section 3109. It 

directs OPM to prescribe regulations necessary to administer section 

3109. OPM subsequently issued regulations which provide that section 

3109 does not apply to the appointment of experts or consultants under 

other authorities. 5 C.F.R. § 304.101. It also informed us that it "does not 

consider the cap under 5 U.S.C. § 3109 to apply to consultants under 42 

U.S.C. § 209(1)." This interpretation is entitled to considerable weight 

since OPM is the agency charged with administering section 3109. 

Based on our review, we found that Congress had not spoken directly on 

the applicability of section 3109 to the authorities in 42 U.S.C. 209(1) and 

(g) and that OPM's interpretation was reasonable. Therefore, we 

concluded that the provisions of section 3109 do not apply to consultants 

employed pursuant to 42 U.S.C. § 209(1). 

Page 16 GAO-12-1035T 
30 


86287.020

The other pay cap that we considered is found in section 5373 of title 5 of 

the United States Code, which places limits on pay fixed by administrative 

action. Pay fixed by administrative action refers to the various pay-setting 

authorities in which pay is determined by the agency instead of pursuant 

to pay rates under otherwise applicable statutory pay systems, such as 

the General Schedule. Congress first enacted section 5373 in 1964, 20 

years after it passed sections 209(1) and (g). Section 5373 limits pay set 

by administrative action to no more than the rate for level IV of the 

Executive Schedule, and lists specific pay authorities which are excepted 

from coverage. The rate for level IV of the Executive Schedule is currently 

$155,500 per year. 42 U.S.C. §§ 209(1) and (g) are not among the 

authorities explicitly excepted from section 5373. 

We looked at multiple issues in determining that the section 5373 cap 

does not apply to 42 U.S.C. §§ 209(1) or (g) apPOintees. We found no 

evidence that Congress had considered the section 209 authorities when 

the administrative pay cap was enacted. Sections 209(1) and (g) allow for 

compensation "without regard to the Classification Act of 1923." We 

parsed laws enacted in 1923 and later to see if this language should be 

interpreted to create an exemption from section 5373, which of course 

was enacted over 40 years after the Classification Act of 1923, and after 

several additional pay laws had also been enacted. Finally, we looked at 

Congressional action in appropriations passed from 1964 through 1993, 

and in extending section 209 authority to EPA in 2005 and in 2009. These 

Congressional actions led us to believe that it did not intend for the 5 

U.S.C. § 5373 pay cap to apply to consultants and scientists hired 

pursuant to 42 U.S.C. §§ 209(1) and (g). Given the evidence of how 

Congress viewed the authority, we did not object to HHS's interpretation 

that the 1993 appropriations cap is the only restriction on its authority to 

compensate individuals appointed under 42 U.S.C. §§ 209(1) or (g). 

In conclusion, with respect to the first issue, the 1993 appropriations act 

unequivocally limits the pay of consultants and scientists appointed for 

limited periods of time pursuant to 42 U.S.C. §§ 209(1) or (g) at agencies 

that are funded by Labor-HHS-Education Appropriations Acts. With 

regard to the two title 5 limitations, we think that the pay limitations do not 

apply to appointments made pursuant to 42 U.S.C. §§ 209(1) or (g). 

Page 17 GAO-12-1035T 
31 


86287.021

Concluding 

Observations 

The statutory pay provisions we analyzed, as mentioned earlier, were 

enacted over the course of nearly 70 years, and are in different federal 

pay systems. As one court has observed, "although some pay systems 

are 'linked' to one another," they have not been "fastidiously integrated" to 

achieve uniform federal compensation policies."" In this case, the issues 

raised - in particular the applicability of the two title 5 limitations on the 

title 42 authority to hire special consultants and fellows - reflect the 

difficulty of applying distinct statutory schemes to determine whether 

specific pay limits apply. Thus if Congress desires upper pay limits for 

appointments under sections 209(1) and (g), it may wish to consider 

amending these provisions to specifically establish such limits. 

Both HHS and EPA have used Title 42 to recruit and retain highly skilled, 

in-demand personnel to government service in order to execute their 

missions. At the same time, HHS's lack of complete data and guidance 

on its use of Title 42 may limit the agency's ability to strategically manage 

its use and provide oversight of the authority. Effective monitoring of the 

use of Title 42 is particularly important in light of HHS's increasing use of 

the authority and the number of employees earning salaries higher than 

most federal employees. 

EPA generally fOllowed its Title 42 policies and has incorporated some 

modifications to improve its appointment and compensation practices; 

however, EPA's current ethics guidance does not sufficiently ensure Title 

42 employees meet ethics requirements after appointment. EPA 

acknowledged it could improve its post-appointment ethics oversight and 

reported it has plans to ensure that Title 42 employees send its General 

Counsel confirmation of stock divestitures and other ethics requirements. 

However, at the time of our review, EPA had not provided us with 

implementation plans or timeframes. Although its plans appear to be 

prudent steps for addressing the specific issues that arose in the cases 

we reported, it will be important for EPA to implement them as soon as 

possible to mitigate the risk of future potential conflict of interest issues. 

13'ntemational Organization of Masters, Mates & Pilots v. Brown, 698 F.2d 536, 539 

(CAD.C. 1983). 

Page 18 GAO-12-1035T 
32 


86287.022

GAO Contacts and 

Staff 

Acknowledgments 

(451013) 

Going forward, our recommendations to HHS and EPA to strengthen 

certain practices under Title 42, if implemented, should help strengthen 

the management and oversight of this special hiring authority. 

Chairman Pitts, Ranking Member Pallone, and Members of the 

Subcommittee, this completes our prepared statement. We would be 

pleased to respond to any questions you or others may have at this time. 

For further information regarding this statement, please contact Robert 

Cramer, Managing Associate General Counsel, at (202) 512-7227, or 

Cramerr@gao.gov, or Robert Goldenkoff, Director, Strategic Issues, at 

(202) 512-2757, or Goldenkoffr@gao.gov. Contact pOints for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this statement. Individuals making key contributions to this 

testimony include Trina Lewis, Assistant Director; Shea Bader, Analyst-InCharge; Dewi Djunaidy; Karin Fangman; and Sabrina Streagle. 

Page 19 GA()'12.103ST 
33 


86287.023

This is a work of the u.s. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other materia!, permission from the copyright holder may be 

necessary if you wish to reproduce this materia! separately. 
34 


86287.024

GAO.s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

Connect with GAO 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO's commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO's website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select .. E-mail Updates: 

The price of each GAO publication reflects GAO's actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO's website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact: 

Website: http://www.gao.govlfraudnetlfraudnet.htm 

E-mail: fraudnet@gao.gov 

Automated answering system: (800) 424-5454 or (202) 512-7470 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

... 

"'1 Please Print on Recycled Paper. 
35 

Mr. PITTS. The chair thanks both of you for your opening statements. 

I will begin the questioning and recognize myself for 5 minutes 

for that pursuant purpose. 

Mr. Goldenkoff, the report states that, according to HHS and 

EPA officials, the pay-setting flexibility is needed to compete with 

the private sector and academia pay schedules. 

Did you review the existing pay schedules for research scientists 

and consultants in the private sector or academia? Did HHS do a 

review of existing pay schedules? If so, what were the differences? 

And, if not, how did they determine pay? 

Mr. GOLDENKOFF. We did not review comparable pay in the private sector or in academia. That type of a study is extremely difficult to do. Mainly, it is hard to find apples-to-apples comparisons. 

But having said that, HHS and EPA are in a labor market that 

is extremely competitive. They are competing for positions that are 

extremely well-paid. And so it is important for them to be able to 

compete and hire people, as has been said here. And pay is a big 

incentive. 

Mr. PITTS. Please describe the role of the Secretary of HHS in 

determining pay levels outside of the civil service. Does any other 

Federal official have that kind of authority? Does the President 

have that authority? 

Mr. GOLDENKOFF. With the Secretary of HHS, my understanding 

is that the Secretary has the authority to approve pay above a certain cap, the highest level. But we did not look at the authorities 

of other department heads or agency heads. 

Mr. PITTS. Did you determine why the use of Title 42 increased 

by 25 percent at HHS from 2006 to 2010? 

Mr. GOLDENKOFF. Well, we did speak to agency officials about 

that, and, yes, it was a dramatic increase. And the reason, a key 

reason was, as I said, was to respond to these health emergencies. 

One was the H1N1 virus, where they needed to bring people on 

board extremely fast to develop a vaccine for it. 

Mr. PITTS. And what was the basis for HHS dropping the annual Title 42 salary cap from $350,000 to $250,000, which is almost a 

30 percent decrease? 

Mr. GOLDENKOFF. Right. That I don’t—— 

Mr. PITTS. Mr. Cramer? 

Mr. CRAMER. I don’t know the basis upon which they decided to 

do it. I think it would seem like a policy judgment on their part. 

Mr. PITTS. Referring back to the first question, was there any 

language in the existing laws or regulations that described Title 42 

as a pay flexibility program needed to compete with the privatesector pay schedules? 

Mr. Cramer? 

Mr. CRAMER. In the legislative history when Title 42 was passed, 

and also when EPA was granted the authority, there was discussion about the need for the Public Health Service and then EPA 

to be able to attract scientists to come work for them, yes. 

Mr. PITTS. Where is the authority that allows HHS and EPA to 

operate the Title 42 in this manner? 

Mr. CRAMER. Well, it is actually Title 42, Section 209. And we 

are actually speaking about subsections F, which is the consultVerDate Aug 31 2005 09:59 Feb 06, 2014 Jkt 037690 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 C:\PROGRA~1\WS_FTP\86287.TXT WAYNE
36 

ants, and then G, which are the fellows. The scientists were 

brought in as—you know, to work for them for some period of time. 

It is those specific provisions. 

Mr. PITTS. Mr. Goldenkoff, would you review the types of employees that were hired at HHS under Title 42 authority, such as nursing or research? And from your analysis of the laws, is there authority to hire a nurse under Title 42? 

Mr. GOLDENKOFF. There is broad authority there. And, you 

know, for example, some of the occupations that they brought in 

people under Title 42, there was a staff scientist; there was a research fellow; a senior investigator; clinical research nurse, who 

specializes in the care of research participants and is responsible 

for showing participant safety. So they are not necessarily caring 

for patients but just caring for people who were involved in the research. The other position here, the other occupation was a clinical 

fellow. 

So there does seem to be a lot of latitude in the positions that 

can be hired under Title 42. 

Mr. PITTS. All right. My time has expired. 

I recognize the ranking member for 5 minutes for questions. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to discuss why it is important that the HHS maintain 

the hiring authority granted by Title 42. 

I think we can all agree that it is essential for HHS to be able 

to recruit and retain highly trained and often specifically trained 

personnel in support of their mission. Because without it, you 

know, people like Dr. Tony Fauci, as I mentioned, or, you know, 

Dr. Harold Varmus, who is the director of the National Cancer Institute, or Dr. Neal Young, the NIH hematologist we read about in 

Wednesday’s Washington Post—he found a cure for aplastic anemia, which is a rare and fatal bone marrow disease. 

So, in your perspective—you know, I am asking the two of you— 

in your perspective, how does Title 42 serve as an essential tool for 

HHS to fulfill its mission? And why is it important that the Department maintain the special hiring authority? 

Either one can start. Dr. Goldenkoff, I guess? 

Mr. GOLDENKOFF. Well, it is important for all agencies to have 

this flexibility because agencies—it is about mission accomplishment. And agencies need to have the various tools that are required to compete in the labor market. And, you know, as we have 

already said, doctors and research scientists and engineers, these 

are highly paid professions, and the GS schedule is not always sufficient to match both the salaries and other forms of compensation 

that are available outside of government. 

For example, in academia, you can have your base salary; you 

can also get money for publishing articles, for consulting. And 

those are things that are not available in the Federal Government, 

but those are things that—that is the competitive environment. 

And the Federal Government needs to have the flexibility to offer 

both the salary and other forms of compensation to get the best 

and brightest. 

Mr. PALLONE. Mr. Cramer, do you want to respond? 

Mr. CRAMER. Well, actually, you are asking about some policy 

issues, and my half of this is the legal side. 

37 

Mr. PALLONE. OK. 

Mr. CRAMER. So we leave the policy to you folks. 

Mr. PALLONE. All right. 

Well, let me ask a second question, and that is—I want to make 

the record clear on two points. First question: Is it correct that 

HHS agreed with each of your three recommendations? 

Mr. GOLDENKOFF. Yes, that is correct. And they have already 

started taking action on them. 

Mr. PALLONE. Well, to the best of your knowledge, is HHS in the 

process of addressing each of these? And to the extent the Department hasn’t don’t so, do you want to describe what they are doing, 

if you could? 

Mr. GOLDENKOFF. Yes. I mean, just very briefly, there were two 

key issues that we found. One had to do with the reliability of the 

data that was in their personnel database. And that sounds somewhat technical, but having a reliable personnel database gives you 

visibility over the kinds of people that you are hiring. And so it is 

very important for internal controls to have accurate data on your 

personnel. 

And so, for example, it was unclear how many people under the 

Sections F or G were being hired. And, as we said, they gave us 

inaccurate information, they provided the Congress inaccurate information on the head count. And it was also unclear—and, initially, for example, it seemed as if they had hired people into components of HHS that was inconsistent with the Title 42 appointment authority. As it turned out, it wasn’t; it was just the inaccurate data. So this data piece is an internal control issue. 

The other finding where we made a recommendation was that 

they did not follow their internal guidelines in using Title 42 policies, for example, on making a business justification, the business 

case for why Title 42 was needed in the first place in terms of a 

particular appointment. 

And so, while we were doing our audit work, they tightened up 

some of their procedures. And so they are making steps in the right 

direction, but we felt that they haven’t gone far enough. And that 

was the basis for one of the recommendations dealing with better 

documentation was needed, to show that, yes, they have basically 

exhausted all possibilities and now they have to use the Title 42. 

And so that is an internal control or an accountability—it addresses those two issues. 

And then on the data, we recommended that they—when they 

input the information, there is a drop-down screen in there—that 

they would ensure that they indicate whether it is a Section F or 

a Section G. And, again, that is the other piece of the internal control. 

Mr. PALLONE. Thank you, Mr. Chairman. 

Mr. Chairman, I just wanted to clarify that this authority could 

only be used for doctoral-level training. It is only used for that purpose—— 

Mr. GOLDENKOFF. I am sorry? 

Mr. PALLONE. This authority, it is only used for doctoral-level 

training. That is my understanding. 

Mr. CRAMER. Doctoral training? 

Mr. PALLONE. Doctoral-level. 

38 

Mr. CRAMER. I am not familiar with—— 

Mr. PALLONE. I am just saying that, myself. I wasn’t—— 

Mr. CRAMER. G is for the fellowships, the scientists, individual 

scientists. And F is for the consultants, which can be a variety of 

things. 

Mr. PALLONE. OK. Thank you. 

Mr. PITTS. Will the gentleman yield just to follow up on that? 

Mr. PALLONE. Oh, sure. I don’t have any time, but sure. 

Mr. PITTS. Oh, you don’t? 

Mr. PALLONE. Oh, I guess I do. I am sorry. 

Mr. PITTS. What is the justification, then, for hiring 347 nurses 

at NIH under this authority? 

Mr. CRAMER. Well, I can try to say something about it. 

You know, under F, it only talks about special consultants. They 

don’t specifically mention nurses. But in this day and age, where 

consultants do so many things and we don’t have a specific legal 

definition of what we mean by ‘‘consultant’’ in 209, arguably one 

could say that a nurse could be brought in as a consultant. 

You know, I used to be an assistant U.S. attorney, and we would 

pick juries. And people would be asked their occupation, and they 

would say, ‘‘I am a consultant.’’ And so the question would be, well, 

what do you do? Because consultants do so many different kinds 

of things. 

Mr. PITTS. OK. Thank you. 

The chair recognizes the gentleman, Mr. Barton, for 5 minutes 

for questions. 

Mr. BARTON. Thank you. 

Before I start asking my questions, I wanted to make a general 

statement. 

I am not opposed or on some jihad to people who want to work 

in government service at HHS or NIH. You know, I am a Federal 

employee. My late aunt was a long-time employee of the Department of Agriculture. My sister is an EPA enforcement attorney at 

the regional office at the EPA in Dallas. So I am absolutely supportive of good people working in the public service area for the 

Federal Government. 

What I am opposed to is using a provision that was originally intended for short-time, special consultants to fill specific critical 

needs being used as a substitute pay scale. That is what I am opposed to. 

And when you have, you know, 44 percent of all the researchers 

at NIH under Title 42 and you have, you know, I think, 25 percent 

of the people at HHS under Title 42, something is out of control. 

Now, I am going to ask a few questions that are trying to make 

that point. 

Mr. Goldenkoff, are there any Title 42 employees that have won 

a Nobel prize? 

Mr. GOLDENKOFF. We did not look into that. 

Mr. BARTON. Do you know of any? 

Mr. GOLDENKOFF. I am not aware of any. 

Mr. BARTON. Do you know of any that are potential Nobel prize 

winners? 

Mr. GOLDENKOFF. I am not in a—— 

39 

Mr. BARTON. Were there any employees hired with the understanding that they might compete for a Nobel prize? 

Mr. GOLDENKOFF. No, we can’t comment on that. 

Mr. BARTON. Or whatever the equivalent prize is. 

Mr. GOLDENKOFF. It was mentioned that Dr. Fauci—I mean, obviously, a Nobel prize is only, you know, within each scientific field, 

you know, a handful that are selected every single year. So that is 

certainly the pinnacle of one’s career. We do know, for example, 

that Dr. Fauci has won and earned a number of awards. 

Mr. BARTON. And nobody begrudges what he is paid. I certainly 

don’t. I have absolutely nothing but the highest esteem for him personally and professionally. 

Is there any record at NIH or in HHS or, for that matter, EPA 

where there was a specific requirement for some unique skill set, 

that this individual was hired and they specifically said, we had to 

pay more because this is one of a handful of people in the country 

that has this skill set? Any indication that they even tried to do 

a normal job search before they used this special compensation 

skill? 

Mr. GOLDENKOFF. Well, and that is what we want to see more 

of. And that was the basis for our recommendation, is greater accountability. Because with flexibility, that is fine, but an agency 

needs to have greater accountability to use something. 

And so, you know, we have said in some of the other work that 

we have done on personnel issues that pay flexibility to be able to 

compete in the marketplace, the labor market for the best and the 

brightest, that is fine, but agencies also need to be held accountable 

that they are using it properly, cost-effectively, consistent with applicable laws and regulations and guidance, and that there is no 

abuse going on. 

And so when we looked, we pulled, of the roughly 6,500 Title 42 

appointments at HHS, we looked at the paperwork on about 60 of 

them, and we did find some gaps in that sort of documentation. 

That is precisely the type of thing that we were looking for, that 

they had exhausted all other outlets, all other avenues for getting 

folks that met those qualifications. And so the goal of the recommendation is to tighten that up and to see more of that. 

But in terms of how that translates into specific numbers, whether 6,000 is too many, you know, should it be more than 6,000, 

should it be fewer than 6,000, we don’t have a basis for that. But 

we would have a better sense, though, of knowing, if there was 

more robust documentation, that at least each one of those appointments met a certain threshold in terms of need and demand. 

Mr. BARTON. Well, now, I don’t want to beat a dead horse, but 

it is clear to me that Title 42 has been used as a substitute pay 

scale. And instead of doing the due diligence and trying to use the 

normal pay scale and find somebody competent, this has just been 

used as kind of a recruitment tool. ‘‘We will hire you under Title 

42, and you will get an extra $50,000 or $75,000.’’ And anybody 

who is being hired is going to say yes to more money instead of 

less. 

But to sit here and say that this had to be used, that it was used 

only in a last resort because they could not find competent people, 

when you increase the use of it by 25 percent in a 2-year period, 

40 

it is being used sloppily, to say the least. And, hopefully, on a bipartisan basis, we can begin to do something about it. 

And, again, the bill that has been introduced, it is not the Ten 

Commandments. If there is something we need to modify or change 

in consultation with the executive branch and the minority, I am 

very open to do that. But I do hope that we tighten this up. 

And, with that, Mr. Chairman, thank you for the hearing, and 

I yield back. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentlelady from Illinois, Ms. Schakowsky, for 5 minutes for questions. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

I would like to point out, in response to the issue of Nobel prizes, 

that Dr. Harold Varmus, who was the former head of the NIH— 

Mr. Barton, I wanted to just let you know that Dr. Harold Varmus, 

who was the former head of NIH, he then went to Sloan Kettering—— 

Mr. BARTON. I understand that, but that was before he worked 

at NIH. 

Ms. SCHAKOWSKY. Oh. I thought the question was whether or 

not—— 

Mr. BARTON. He didn’t get hired and win this Nobel—and, look, 

I am for him—— 

Ms. SCHAKOWSKY. No, I know. I know you are. And I don’t want 

to be argumentative. I just wanted to say we actually do have, 

proudly, have someone, head of the National Cancer Institute, that 

won a Nobel prize. 

Mr. BARTON. I have met that gentleman, and I am impressed 

with him. 

Ms. SCHAKOWSKY. OK. 

Mr. BARTON. But he didn’t get hired under Title 42 before he 

won the Nobel prize. That is all I am saying. 

Ms. SCHAKOWSKY. OK. 

Let me also just say the enormous respect that I have for the 

GAO. And I certainly have found your advice and your studies so 

incredibly useful. 

And I want to focus in on one part of what the GAO found, and 

wonder if it is not an area for bipartisan agreement. There are two 

sentences just in the cover sheet, one that HHS does not have reliable data to manage and provide oversight of its use of Title 42. 

It seems to me that unless the steps that they have taken satisfy 

your requirements—and I want going to ask you about that—that 

certainly seems like something that we ought to focus on. And, two, 

that the EPA—and you mentioned that in your testimony, I believe—does not have post-appointment procedures in place to ensure Title 42 employees meet ethics requirements to which they 

have previously agreed. And that seems like a place that we all 

definitely ought to focus on. 

So, one, let me ask you if HHS has responded to the oversight 

of its use sufficiently. Because I know it has made changes. 

And, two, I wanted to ask you, in your opinion, how would caps 

on the use of this hiring authority, in your view, affect NIH’s ability to hire the skilled workforce needed to quickly respond to public 

health crises? 

41 

I want to just add one point. The chairman asked, do you look 

at the private sector? It seems to me that one of the criteria when 

HHS or EPA or whoever hires—and I am presuming that they do 

need to look at the private sector, that we are not just throwing 

out a number. Is there any requirement that they look at that? 

So let me get those answers. 

Mr. GOLDENKOFF. Well, under the general schedule, when general schedule pay is considered and adjusted on an annual basis, 

it is based on salary surveys with comparable jobs in the private 

sector. Soat least for the general schedule—now, you can argue 

with the methodology, and a lot of people have debated that—but 

there is some comparison with the private sector based on also location and level of position for GS positions. 

But for the Title 42 positions, I am not familiar with exactly 

what they do to—— 

Ms. SCHAKOWSKY. OK, but in our small time here, let’s now talk 

about these management issues, the oversight and monitoring that 

I had asked you about. I mean, has NIH made any of those 

changes? And what about focusing on how they monitor the—— 

Mr. GOLDENKOFF. Yes, they agreed with the recommendations, so 

that is a start. They also had already taken steps to tightenup certain of their procedures in making the appointments. 

And what we will be doing, as part of our routine follow-up effort, as we do with all agencies that we make recommendations to, 

we will continue to follow up with them to make sure that they implement those recommendations. 

Ms. SCHAKOWSKY. And what do you think the effect of caps 

would be? 

Mr. GOLDENKOFF. It is difficult to say. I mean, we have not 

looked into that. Just more conceptually, though, where we have 

looked at, whether it is caps or things that are more formulaic in 

other areas, sometimes it doesn’t always get the result that you 

want and does affect mission accomplishment. In this case, though, 

we can’t say. We have not looked into it. 

But I would say, it is something to be sensitive to. Because, really, what this is about, as we said earlier, it is about mission accomplishment. And, you know, whether the number should be 5 percent, whether it should be 2 percent, whether it should be 10 percent, it is really hard to say. And so, what is the basis for that 

number? 

And this is why we keep coming back to the internal controls and 

the accountability. You know, so long as there is a justification for 

each one of those appointments—and this is where, for example, 

the annual reporting requirement in the new legislation would 

probably be a good thing because it could force HHS to—— 

Ms. SCHAKOWSKY. That is what I was thinking, too, Mr. Barton, 

that the annual reporting requirement is something I think all of 

us certainly could easily agree with and should. 

Thank you. I yield back. 

Mr. PITTS. The chair thanks the gentlelady and now recognizes 

Dr. Burgess for 5 minutes for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. 

And, Mr. Goldenkoff, I think that is exactly the point. This whole 

process needs to be tightened up. And while we all want to see proVerDate Aug 31 2005 09:59 Feb 06, 2014 Jkt 037690 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 C:\PROGRA~1\WS_FTP\86287.TXT WAYNE
42 

grams have flexibility to get the people in to get the work done that 

needs to be done, at the same time, if there is no oversight, I think 

we get the general impression that this is a program that hasn’t 

been under tight control, and many things may have gotten away 

from not just HHS but other agencies, as well. 

The chairman asked a good question about comparable salaries, 

and then I think Ms. Schakowsky followed up on that. You mentioned salary surveys. Would that also include salary history of the 

individual under consideration? 

Mr. GOLDENKOFF. We did not—it was outside the scope of the 

study that we did. 

Mr. BURGESS. But wouldn’t that be a reasonable thing to include 

if you are—— 

Mr. GOLDENKOFF. Oh, yes, yes. Most definitely. 

Mr. BURGESS. Again, I don’t want to belabor the point, but the 

limited data I have available to me, which is the wiki org chart, 

the top salary earner on that, it is an individual named after a subatomic particle, who earns $350,000 a year. And I am sure he does 

a great job, I am sure his position is important, and the country 

is the better for having him there. He is the head of the endocrine 

oncology section’s surgery branch at the National Cancer Institute—a tough job. We want him to do it. But his previous position, 

apparently earned $256,000 in 2008. 

So that is a pretty big jump, almost a $100,000 jump in salary. 

Now, again, I am not saying that this individual is not worth it, 

but I would hope that somebody has got their hand on the tiller 

who is making these decisions. 

Let me ask you this. Any big company is going to have an HR 

department director who kind of oversees this stuff. Is there the 

equivalent of an HR director at HHS? 

Mr. GOLDENKOFF. Well, there is a chief human capital officer. 

Mr. BURGESS. OK. Who is that individual? 

Mr. GOLDENKOFF. Off the top of my head, I don’t know. 

Mr. BURGESS. OK. Maybe you could provide that information to 

us. 

Mr. GOLDENKOFF. Sure. We can get that. 

Mr. BURGESS. And, Mr. Chairman, that might be something we 

want to follow up on when we do our written questions. 

And, as has just been said in so many ways, we want the people 

there to do the work that needs to be done when it needs to be 

done. Now, you referenced the H1N1 crisis, and that was a crisis. 

But it is odd that we think that that required a sudden increase 

in Title 42 hires at higher salaries because, you know, the stimulus 

bill passed not 2–1/2 months before that with an extra $10 billion 

to NIH. I mean, so they had cash, they had money in the coffers. 

Interesting to see how that was allocated. 

And then, of course, the other thing is, we had also less than 10 

years before come through 9/11, with all the beefing up of national 

labs and building the infrastructure. 

So am I to understand from your line of reasoning that the NIH 

and these other national labs do not have the surge capacity to 

deal with an existential threat like H1N1? 

43 

Mr. GOLDENKOFF. Again, we have not looked at that. That was 

outside—you know, we looked at something that was just very, 

very narrow, and that was Title 42. 

Mr. BURGESS. Yes. And I appreciate that. But, again, at the same 

time, it is like we spend all this money on readiness, and then we 

spend all the money in the stimulus; surely we weren’t having to 

then go out and shop for the best and brightest minds in the business in order to bring them in to do this work. 

Mr. Cramer, let me ask you a question. The National Cancer Act 

of 1971 made the positions of the Director of NIH and the Director 

of the National Cancer Institute into Presidential appointments. 

Since they are Presidential appointments, they were no longer Secretarial appointments. Under Title 42, does that mean the NIH Director and the NCI Director are not eligible for Title 42 salaries? 

Mr. CRAMER. I am not in the position to answer that specific 

question now because I haven’t considered it before. So I can look 

into it and get back to you on it. But I don’t know—— 

Mr. BURGESS. Do you know the salary of Dr. Collins? 

Mr. CRAMER. No, I don’t. 

Mr. BURGESS. I don’t either. Is there anybody that earns more 

than Dr. Collins at the NIH? 

Mr. CRAMER. I didn’t look into the salary issues of people. I 

was—— 

Mr. BURGESS. Mr. Goldenkoff, do you have that information? 

Mr. GOLDENKOFF. We have data on salaries, but we do not have 

it by specific individuals. The data was provided to us confidentially. We just have IDs, so we cannot link a particular salary level 

with a specific individual. 

Mr. BURGESS. Oh, go to WikiOrgChart; they will do it for you. 

But it is just interesting if there are individuals at NIH who earn 

more than the Director, and just how many individuals there are 

who earn this. And perhaps a quick glance at the services that they 

provide, where they would earn a salary in excess of the Director 

of the entire NIH. 

And we will submit that as a question to be responded to in written form. I don’t expect an answer right now. 

Mr. GOLDENKOFF. Yes, we can provide that to you. 

Mr. BURGESS. All right. Very well. 

Thank you, Chairman. I will yield back the balance of my time. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Illinois, Mr. Shimkus, for 5 minutes for questions. 

Mr. SHIMKUS. Thank you, Chairman. 

And I do appreciate you all for coming. I do agree, I find the 

work of the GAO very helpful to us as public policy folks. 

But in just listening to your opening statements and testimonies, 

and, Mr. Cramer, for you to go back to 1926 and then figure out 

what happened in 1956 and try to weave this path of how we got 

to where we are at and why, just that analysis says we need to 

clean this up. 

So, I mean, just the opening statements saying we are cobbling 

this together to figure out how we got here, where what Mr. Barton 

would do is just say, let’s just take a look at it, write an authorization, get bipartisan support, clean it up, try to get reliable data on 

44 

the use of this Title 42 authority, as you stated in your report. So 

I am excited. I think this is much-needed. 

Let me ask, I guess, a question. The Public Health Act—and this 

is Title 42 of that big law—EPA doesn’t come under that authority 

under the Public Health Act,correct? 

Mr. CRAMER. That is right. It is separate. 

Mr. SHIMKUS. So the EPA got dragged into this through an appropriation bill; is that right? 

Mr. CRAMER. Yes, it—well, it was a bill that authorized the EPA 

to make use of Title 42 authorities. 

Mr. SHIMKUS. And I understand that was under an appropriation 

bill that then became law, and that is—— 

Mr. CRAMER. Yes. That is right. It was. 

Mr. SHIMKUS. So we, as authorizers, also really dislike public 

policy created through spending authority versus authorization. So 

the other aspect would be, let’s have this debate of whether EPA 

should be under this, let’s go through the authorization process and 

have that debate, should this apply to—versus, let’s let these 

sneaky appropriators do it through their process. Right? I mean, so 

that is another aspect. 

We should not be afraid of this debate. And, again, even on both 

sides—and even my friend from Illinois, she has identified some 

things that I think we definitely can try to clean up and I wouldn’t 

think would be that difficult. 

Now, my question also comes from the report, to try to explain 

one of the footnotes here on page 2 of your report. And I will just 

read it to make it easy. It says, ‘‘The salary and compensation limits were lowered by HHS policy issued in February 2012 and in 

March 2007. HHS limits the annual base salary for employees 

hired under Section 209(f) to $350,000 and $375,000 in total compensation. These higher limits were in place during most years of 

our review of HHS’s Title 42 use. Total compensation at HHS includes base pay, recruitment and retention,’’ et cetera, et cetera, et 

cetera. 

That is trying to make a statement that the administration itself 

said this thing has gotten overinflated—and I guess we will go to 

Mr. Goldenkoff—is that how I am reading it, these things got overinflated? And they are pulling it back. And the main section of that 

page, which is page 2, you have annual base salary for many appointees under Title 42 at HHS cannot exceed $250,000. That was 

by policy from the administrative staff.Is that correct? 

Mr. GOLDENKOFF. I believe so. Yes, that is correct. 

Mr. SHIMKUS. And so, without proper—going back to one of your 

main statements about there is no, really, market analysis of why 

we paid this, even the administration said, these things got overinflated, we are going to pull them back—which I think goes to 

some of the questions about what positions are being used, how we 

are evaluating their salary range. And I concur with Mr. Barton; 

to some extent, it just seems like there was a different salary range 

outside of the normal process, and it has just grown over time, as 

things do here. 

Again, I appreciate the testimony. It is a great hearing. Mr. 

Chairman, thank you for it. 

And thank you for your great work. 

45 

Mr. PITTS. The chair thanks the gentleman. 

And I now recognize the gentleman from Georgia, Dr. Gingrey, 

for 5 minutes for questions. 

Mr. GINGREY. Well, I thank you, Mr. Chairman, for recognizing 

me. I came in at the very tail end of this. And, doggone it, Mr. 

Shimkus, as he always does, took my question, the last question on 

my list. But he did it better than I could. 

Let me just make a comment and say that I thank the witnesses 

from GAO for testifying this morning. And I would concur with my 

colleague from Illinois, that we are deeply appreciative of the work 

that you do, not just on this but in general. It is very, very helpful, 

as is CRS, to help us do our work and do a better job. 

Maybe rather than me asking a question that has already been 

asked, the two of you could sort of summarize, if you have not already done that, if you don’t mind, maybe in a condensed manner, 

do that for me in regard to what you have found in this report and 

what your recommendations are going forward, both for HHS and 

EPA, in regard to this issue? 

Mr. GOLDENKOFF. Sir, I mean, in a nutshell, it was, you know, 

we recognize the importance of having pay flexibility, but, you 

know, we are GAO, our middle name is literally ‘‘accountability’’, 

so what we also were looking for was more accountability in their 

use of Title 42. Because we are in agreement, that we don’t want 

abuse of it, we don’t want any waste, we don’t want there to be indiscriminate use of Title 42. 

And so, when we went to look at within—we looked at the extent 

to which the Title 42 appointments at both HHS and EPA were 

consistent with the law, applicable regulations, agency policies. 

And what we found was that, within HHS, there were issues in 

terms of their ability to even oversee their use of Title 42, and that 

is that data issue. They really didn’t have a good accounting of who 

was Title 42(f) or Title 42(g). There was just some sloppiness in 

there. And, actually, a fair amount of time of the audit was spent 

working with HHS just cleaning up their database. And so that 

was what led to one of the recommendations to HHS. 

The second finding on HHS concerned their documentation, their 

justification for needing Title 42. And we found that, in some cases, 

they weren’t always consistent with their own policies. And so that 

led to our other recommendation to HHS, dealing with the need to 

tighten up and better document the need for the authority. 

And then for EPA, obviously they have far fewer Title 42 appointments. So what we did find there is that those 17 appointments were consistent with their policies, but we found that there 

were some issues with conflict-of-interest provisions, and they 

didn’t always follow up with employees that did things that were— 

basically, that had holdings, stock holdings, and they did not divest 

in them, as they were asked to—— 

Mr. GINGREY. Well, I will just interrupt you to say this. I think 

that was a very, very important finding, that conflict-of-interest 

issue, particularly in regard to EPA and all these rules and regulations that get handed down. So I thank you for that work. 

Mr. Cramer, did you have any comments that you wanted to 

add? 

46 

Mr. CRAMER. Well, we looked, essentially, at this question of pay 

caps and whether or not any of the pay caps that we considered 

that exist in the Federal compensation systems—there are a number of different systems—actually applied to the Title 42 folks. And 

we found that it was a very limited—there is a very limited cap 

on the pay involving those who work for a limited-time basis. 

To sum it up, the statutory schemes are very complicated. And 

if the committee can begin to work on trying to harmonize the various things that have happened over the many years during which 

all of these laws have been passed, to bring it together and to make 

it simpler, it would be a great service to HHS and to the Federal 

Government. 

Mr. GINGREY. I thank you. 

And I yield back. 

Mr. PITTS. Would you yield to Dr. Burgess, please? 

Go ahead. 

Mr. BURGESS. I would just like to ask Mr. Goldenkoff about, how 

does the HHS implementation of Title 42 differ or compare to 

EPA’s implementation of Title 42? 

Mr. GOLDENKOFF. Compare to what? 

Mr. BURGESS. HHS and EPA, when they are governed under 

Title 42, is their approach identical, or are there differences between the two agencies? 

Mr. GOLDENKOFF. It seemed that EPA’s practices were a little bit 

tighter, a little bit more thorough, and certainly they were more 

consistent in following. Now, granted, there were also fewer cases 

to look at. So, you know, we were dealing with over 6,000 cases 

versus the 10 that we looked at in EPA, I believe. And, you know, 

so the likelihood was we were going to find more—— 

Mr. BURGESS. So how many Title 42 employees are there at 

EPA? 

Mr. GOLDENKOFF. Seventeen. 

Mr. BURGESS. And how many could they hire? 

Mr. GOLDENKOFF. Up to 30. 

Mr. BURGESS. Do they need those slots if they are unfilled? 

Mr. GOLDENKOFF. My understanding is there are plans to fill 

them. 

Mr. BURGESS. I would say don’t. 

Mr. GOLDENKOFF. And, you know, again, this is a policy issue. 

It is an internal management matter that we did not look—— 

Mr. BURGESS. All right. We will. 

Thank you. I yield back. 

Mr. PITTS. I recognize Mr. Barton for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. I am not sure I will take 

the 5 minutes. 

Under current law or current regulations, is there a limit on 

what the Secretary of HHS can pay an exceptional individual? 

Mr. CRAMER. There is a limit in the appropriation law if that 

person is a person who was appointed for a limited period of time. 

Mr. BARTON. What if they are not appointed for a limited period 

of time? 

Mr. CRAMER. No, there is no limit. 

Mr. BARTON. So, theoretically, under current law and regulations, the Secretary of HHS could pay somebody $2 million a year? 

47 

They don’t do it, I understand that. But there is no limit on it right 

now? 

Mr. CRAMER. There is no law that would prohibit that at this 

time. 

Mr. BARTON. At this time. Thank you. 

Should there be a law that puts a specific cap on compensation? 

Mr. CRAMER. If Congress decides there should be a law, there 

should be a law. 

Mr. BARTON. That is a great answer. You can’t beat that. 

My understanding is that Title 42 originally was established during World War II for temporary special consultants.Is that correct? 

Mr. CRAMER. Yes. Back in 1944, Title 42 was enacted into law. 

And, at that time, although the law itself did not specify that the 

employees had to be temporary, the regulations of the Public 

Health Service, which went into effect in 1946, actually, limited 

them in time. 

But there is an interesting little twist here. It didn’t limit them 

to, say, a year or 2 years or 3 years. What it provided was that consultants and fellows hired under Title 42 could only be employed 

for up to one-half the working days in any year. So, although they 

could have been there for many years, they could only work essentially half-time. 

Mr. BARTON. When did the word ‘‘temporary’’—or maybe I 

should—of the people that have been hired most recently under 

Title 42, are they classified as temporary, or are the classified as 

full-time permanent? 

Mr. CRAMER. I can’t speak to how HHS treats them on their 

books. I don’t know if Mr. Goldenkoff—— 

Mr. GOLDENKOFF. Term appointments? OK—— 

Mr. BARTON. When they—— 

Mr. GOLDENKOFF [continuing]. Or indefinite. 

Mr. BARTON. They are what? 

Mr. GOLDENKOFF. It is our understanding it is either term or indefinite. 

Mr. BARTON. Indefinite. So if I am hired under the general scale 

at HHS, GS-something, whatever, I am hired as a permanent fulltime employee, correct? 

Mr. GOLDENKOFF. That is correct. 

Mr. BARTON. But if I am hired under Title 42, I am considered 

an indefinite. And indefinite could be 30 years. 

Mr. GOLDENKOFF. But we did not see that going on. I mean, we 

did look at that, just precisely that, and we did not see that in the 

data that we looked at. 

Mr. BARTON. Well, should a reform be that we either define what 

temporary is and put some specificity to it and require that Title 

42 only be used for truly temporary special needs? Or should we 

go the other way and say, let’s end this hypocrisy of indefiniteness 

and say that they are going to be full-time? In other words, let’s 

be transparent about it. 

Mr. GOLDENKOFF. To the extent—and I think this is one of the 

other flexibilities that we haven’t discussed yet, is that Title 42, the 

fact that these are term appointments, does allow for bringing people in for a limited period of time, and that can align with a parVerDate Aug 31 2005 09:59 Feb 06, 2014 Jkt 037690 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 C:\PROGRA~1\WS_FTP\86287.TXT WAYNE
48 

ticular research project. And so, in theory, when that research 

project is over, then, you know, that—— 

Mr. BARTON. But that is apparently not how they are doing it. 

They don’t sign a contract for a research project. They are just 

hired as regular employees, and they get all the benefits, but it is 

for an indefinite period of time. 

Mr. GOLDENKOFF. But then compared to, say, a permanent employee, who is there for, you know, the next 30 years—— 

Mr. BARTON. Hopefully. 

Mr. GOLDENKOFF. So, I mean, that flexibility is important. But, 

you know, you are correct, in that—and, again, it is part of having 

this oversight, that folks aren’t there for an indefinite period of 

time and they are notre-upped on a regular basis. 

Mr. BARTON. Well, my time is about to expire, and I appreciate 

the chairman letting me have a second round. 

Should we legislatively define this program and put some definitions and caps in it? Or should it be left to the executive branch 

to handle it on an executive regulatory basis? 

Mr. GOLDENKOFF. We would need to consider that more. You 

know, the implications of caps, in particular, and how that would 

affect the overall flexibility. 

And, you know, certainly, there is the need to ensure that HHS 

and EPA don’t use this indiscriminately or as an alternate to 

standard hiring procedures. But would a cap be too blunt of an instrument? And is the way to get around that through maybe tighter internal controls to ensure that for every appointment that is 

made that they have exhausted all other appointments? 

Mr. BARTON. Well, my time has expired, but I just know, when 

I was in the private sector and had to make hiring decisions, if I 

really needed this position hired, you know, that was always the 

exceptional case, that I had to have that. I mean, I would go to my 

boss, if it was above my ability to pay them what I thought they 

needed, and say, ‘‘I have to have this individual, and we need to 

pay him 125 percent of the market.’’ I never said, ‘‘Well, I really 

need him, but I just want to pay him 75 percent.’’ I mean, if you 

leave it to the discretion at the executive level, they are always 

going to say we have to have that person and we need to pay them 

more. 

And, with that, I yield back, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman. 

And I now recognize the ranking member for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

Gentlemen, I just wanted to make it clear and basically commend the Department, HHS, for the actions it has already taken 

to respond to your recommendations. I want to make it clear that 

they have. 

And if I could ask unanimous consent, Mr. Chairman, to enter 

into the record the HHS human resources manual that has been 

updated, or the section that has been updated in February 2012. 

Mr. PITTS. Without objection, so ordered. 

[The information follows:] 

49 


86287.025

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

Effective April 2, 2012, section 42-50 (C), Tenure, of this Instruction has been sunsetted and is 

no longer applicable. 

Significant changes to HHS Instruction 42-1 dated February 15,2012 from HHS 

Instruction 42-1 dated August 5, 2004 include the following: 

• Provides a definition of "scientific position," to include positions in which the 

incumbent is directly involved in or manages scientific research and/or activities, to 

include administrative positions that require the incumbent to have scientific 

credentials. Prior HHS Policy did not provide a definition of "scientific position." 

• Under Qualifications, requires that appointees have a doctoral level degree in a 

scientific discipline related to the position and professional stature that is 

commensurate with the duties of the position being filled. Provides a mechanism for 

exceptions that require special justification and approval. Prior HHS Policy only 

required a Bachelor's Degree. 

• Also under Qualifications, establishes a minimum qualification level, equivalent to 

that required at the GS-I3. The prior HHS Policy did not establish a minimum 

qualification level. 

• Requires that the same recruitment plan be used for both Title 5 and Title 42 in order 

to meet the requirement to demonstrate that other available personnel systems (Le., 

Title 5), failed to yield qualified candidates. 

• Includes a detailed explanation of the process and documentation requirements 

necessary to demonstrate that other available personnel systems, including Title 5, 

failed to yield candidates that possess critical scientific expertise. 

• Eliminates the current restrictions placed on commissioned corps officers converting 

to Title 42 209(f) appointments upon retirement. 

• Identifies specific positions and/or categories of positions at NIH that may be filled 

through Title 42 209(f) without "exhausting" other recruitment 

mechanisms/authorities. 

• Prescribes the approval process, including necessary documentation for other 

OPDIVs to "designate" positions as Title 42 209(f), allowing them to fill such 

positions without first "exhausting" other recruitment mechanisms/authorities. 
50 


86287.026

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.C. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

• Pay caps: 

o Base salary cannot exceed $250,000 in a calendar year unless a higher rate is 

approved by the Secretary. The previous policy delegated authority to the 

FDA, CDC, and NIH OPDIV Heads to set base salary up to $350,000. 

o Total compensation (including recruitment bonuses, retention allowances, and 

cash awards) cannot exceed $275,000 in a calendar year without the prior 

approval of the Secretary. The previous policy capped total compensation at 

$375,000. 

o Base salary for employees on time limited appointments may not exceed the 

rate set in accordance with Pub. L. No. 102-394. This cap was not in the 

previous policy. 

2 
51 


86287.027

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.C. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

Material Transmitted: 

Department of Health and Human Services (HHS) Instruction 42-1, Appointment of 42 

U.S.C. § 209(t) Special Consultants, dated February 15,2012. 

Material Superseded: 

HHS Instruction 42-1, Appointment of 42 U.S.C. § 209(t) Special Consultants, dated 

August 5, 2004. 

Background: 

This instruction provides guidance to Operating Divisions and Staff Divisions on the 

minimum eligibility and qualification requirements for appointments made under 

42 U.S.C. § 209(t). Additionally, the Instruction provides guidance on compensation, 

awards, performance management and benefits for those serving on appointments made 

under 42 U.S.c. § 209(t). 

This issuance is effective immediately. Implementation under this issuance must be carried 

out in accordance with applicable laws, regulations, bargaining agreements, and Department 

policy. 

INSTRUCTION 42-1 

fE. 1. Holland, Jr.! 

E. J. Holland, Jr. 

Assistant Secretary for Administration 

3 
52 


86287.028

HUMAN RESOURCES MANUAL 

Instrnction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15,2012 

42-00 

42-10 

42-20 

42-30 

42-40 

42-50 

42-60 

42-70 

42-80 

42-90 

42-100 

42-110 

42-120 

42-130 

42-140 

42-150 

42-160 

42-170 

42-180 

Appendix I: 

Appendix 2: 

Appendix 3: 

HHS PERSONNEL INSTRUCTION 42-1 

APPOINTMENT OF 42 U.S.C. § 209(1) SPECIAL CONSULTANTS 

Background 

Purpose 

Authorities 

Definitions 

Coverage 

Tenure 

Qualifications 

Compensation 

Initial Appointments 

Conversions from Other Pay Systems 

Positions Designated as 42 U.S.C. § 209(f) 

Case Documentation and Approval Procedures 

Benefits 

Awards 

Performance Management and Conduct 

Other Actions 

Conduct Laws and Regulations 

Processing Appointments and Conversions to 42 U.S.C. § 209(f) 

Program Review and Evaluation 

Required Documentation for Initial Appointments under 42 U.S.C. § 209(f) 

Documentation Checklist for 42 U.s.C. § 209(f) Appointments 

NIH 42 U.S.c. §209(f) Official Scientific Individual/Categorical Designations 

42-00 Background 

The authority to hire "special consultants" is granted by 42 U.s.c. §209(f) Special Consultants, which 

provides: 

In accordance with regulations, special consultants may be employed 

to assist and advise in the operations of the Service. Such 

consultants may be appointed without regard to the civil-service 

laws. 

The implementing regulation. 42 C.F.R. § 22.3(a) Appointments of special consultants, provides: 

When the Public Health Service requires the services of consultants 

who cannot be obtained when needed through regular Civil Service 

appointment or under the compensation provisions of the 

Classification Act of 1949, special consultants to assist and advise in 

the operations of the Service may be appointed, subject to the 

provisions of the following paragraphs and in accordance with such 

4 
53 


86287.029

HUMAN RESOURCES MANUAL 

Instrnction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

instructions as may be issued from time to time by the Secretary of 

Health and Human Services. 

42-10 Purpose 

The policy establishes the minimum qualification and eligibility standards for compliance with the 

regulation implementing 42 U.S.C. § 209(t). An operating division (OPDIV) may apply more 

stringent requirements where that OPDIV deems necessary for its purpose. These baseline standards, 

however, must be adhered to in all instances. 

42-20 Authorities 

42 U.s.C. § 209(f) Special consultants 

• 42 C.F.R. § 22.3(a) Appointment of special consultants 

• Pub. L. No. 102-394 

42-30 Definitions 

Peer Review means the scientific and technical evaluation by a panel of experts who are qualified by 

training and experience in particular scientific or technical fields, or as authorities knowledgeable in 

the various disciplines and fields related to the scientific areas under review, to give expert advice 

concerning the scientific and technical merit and relevance of the subject matter investigated. 

Scientific Position means (I) a professional occupation directly involved in the conduct of high-level 

research studies, regulatory or product reviews, investigations, or experimentations in a branch of 

natural science, applied science, biomedical science, or related scientific field; or (2) management or 

supervision of such research studies, regulatory or product reviews, investigations, or 

experimentations, in which scientific expertise and credentials are required to provide appropriate 

program direction. 

42-40 Coverage 

A. Appointments under 42 U.S.C. § 209(f) may only be used to fill scientific positions. The 

authority will be used only when recruitment or retention efforts under other available and 

applicable personnel systems, including Title 5 of the United States Code, the Senior 

Biomedical Research Service (SBRS), and the PHS Commissioned Corps, have failed to 

yield candidates that possess critical scientific expertise. This instruction does not apply to 

any other excepted service appointments, including Special Government Employees (SGEs), 

Expert and Consultants (EE/EI), the SBRS, or those covered by 42 U.S.C. § 209(g). 

B. While employees appointed under 42 U.S.C. § 209(t) are not covered by the laws or 

regulations outlined in 5 U.S.C or 5 C.F.R, there are instances in which Title 5 principles are 

used to effectuate actions for employees appointed under 42 U.S.c. § 209(t), 

42-50 Tenure 

5 
54 


86287.030

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.C. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

A. All appointments, including conversions from other pay systems, to positions under 42 

U.s.c. § 209(f) are in the excepted service. Work schedules may be full-time, part-time, or 

intermittent. 

B. Appointments may be indefinite. That is, they do not have a stated time limit so one may 

serve an entire Federal career under an indefinite appointment. 

C. Appointments may be temporary for any period up to five years with unlimited extensions. 

Non-citizens on time-limited employment visas may only be given temporary appointments 

and appointments cannot exceed the visa expiration date. 

42-60 Qualifications 

A. Education 

1. Candidates must meet education requirements in a scientific discipline directly related to the 

position being filled, in accordance with the Office of Personnel Management (OPM) 

qualification standards. 

2. At a minimum, the candidate must possess a doctoral-level degree from an accredited 

institution of higher learning, including: Ph.D., M.D., D.V.M., D.D.S., D.M.D., Sc.D., or 

other research doctoral-degree widely recognized in U.S. academe as equivalent to a Ph.D. 

Exceptions to this requirement must be approved by the OPDlV head or designee and the 

justification must be documented. 

3. Candidates that have completed part or all of their education outside of the United States 

must have their foreign education, necessary to meet qualification requirements, evaluated by 

an accredited organization to ensure that the foreign education is comparable to education 

received in the United States. It is the responsibility of the candidate to provide written proof 

of his/her foreign education accreditation prior to appointment. In addition, the servicing 

human resources office is responsible for verification. 

4. Candidates must furnish proof, prior to appointment (e.g., official transcript; ECFMO 

certification; foreign education accreditation), that they meet all required education 

requirements. 

B. Experience 

1. Candidates must have professional experience and stature in their area of expertise 

commensurate with the duties of the position being filled. At minimum, a candidate's 

experience must be equivalent to the minimum qualification standards prescribed for a 

position at the OS 13 level or higher. 

2. In order to determine eligibility, supervisors must prepare a narrative statement fully 

describing the scientific duties and responsibilities of the position, the requisite educational 

background, and experience required to perform those duties. A classified position 

description is not required. However, the statement of duties must be reviewed to determine 

equivalent grade leveL 

C. Eligible Series 

6 
55 


86287.031

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(t) SPECIAL CONSULTANTS 

Issuance Date: February 15,2012 

All Title 42 positions must be identifiable within a General Schedule occupational group. The title 

and series assigned to the position will be based on the duties of the position. 

42-70 Compensation 

A. Salaries for individuals appointed on a full-time schedule will be set on a per annum basis 

commensurate with the applicants' qualifications, experience, and other factors as described 

below. Appointments that are on other than a full-time basis will be paid on a pro-rata basis 

of an annualized salary. 

B. For purposes of this program, the appointee's compensation is the base salary for pay, 

leave, and benefits, as well as retention allowances, recruitment/relocation bonuses, and 

awards, which are not included in base salary. Base salary will be set at the lowest rate 

necessary to recruit the candidate. In determining the base salary, management must 

consider such factors as: 

Current salary; 

Competing offer of employment, either written or verbal; 

Stature of individual in hislher professional field; 

Average salary from a published salary survey; 

Urgency of the program relative to mission accomplishment; 

Role and impact of the individual in the program; 

Recruitment efforts, e.g., turnover rates, labor market factors, 

recruitment/retention statistics; 

Specialized skills/training, and experience that the applicant may possess that will 

benefit the agency/program; 

Compensation for cost of living disparity as reflected in a salary comparison; 

Complexity of duties; 

Consistency of pay with others in the organization; and 

Responsibilities within the organization 

C. Base salary may be set up to $250,000 per annum at the discretion of the OPDIV except for 

those employed on time limited appointments. Recommendations for base salary above 

$250,000 must be submitted by the OPDIV head to the Assistant Secretary for 

Administration (ASA), for approval by the Secretary. 

D. Base salary for employees on time limited appointments may not exceed the rate set in 

accordance with Pub. L. No. 102-394. 

E. Pay Increases 

I. Automatic cost of living adjustments do not apply to 42 U.s.C. §209(f) appointments. All 

pay increases will be performance based, will be consistent with the employee's annual 

performance appraisal and will be limited to one increase per year. Any pay increase 

outside of the normal performance cycle requires an exception authorized by the OPDlV 

head. Such exceptions must be fully documented and justified. 

7 
56 


86287.032

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15,2012 

2. Performance based pay increases will normally be limited to a maximum of six percent. 

OPDIV heads may authorize higher increases where performance clearly warrants. All pay 

increases must be fully documented and justified. 

3. Recommended pay increases that will increase base salary above $250,000 per annum, 

must be submitted by the OPDIV head to ASA for approval by the Secretary. Such requests 

must be fully documented and justified. 

F. Pay Caps 

I. Base salary cannot exceed $250,000 in a calendar year unless a higher rate is approved 

by the Secretary. 

2. Total compensation (including recruitment bonuses, retention allowances, and cash 

awards) cannot exceed $275,000 in a calendar year without the prior approval of the 

Secretary. 

3. Base salary for employees on time limited appointments may not exceed the rate set in 

accordance with Pub. L. No. 102-394 

G. Pay Incentives 

1. Employees appointed under 42 U.S.C. § 209(f) are eligible to receive recruitment, 

retention, and relocation bonuses. While not covered by the compensation laws and 

regulations outlined in 5 U.S.C. and 5 C.F.R., the same criteria and coding used for 

Title 5 employees will be used for employees appointed under Title 42 when making 

decisions regarding eligibility and implementation of these incentives. 

2. Employees appointed under Section 209(f) cannot receive special salary rates, 

Physician's Comparability Allowances (PCAs), or Physician Special Pay (Title 38). No 

exceptions are authorized. 

42-80 Initial Appointments 

Appointments under 42 U.S.C. § 209(f) may only be used to fill scientific positions when 

recruitment or retention efforts under other available personnel systems, including Title 5 of the 

U.S. Code, the SBRS, and PHS Commissioned Corps, have failed to yield candidates that possess 

critical scientific expertise. The recruitment efforts used under other available personnel systems 

(Le., Title 5) must be as extensive and exhaustive as those used to recruit under Title 42. These 

efforts, as well as the scientific credentials of the potential appointee, must be fully documented. 

Before 42 U.S.C. §209(f) may be used, the OPDIV must demonstrate that the following criteria 

have been met: 

1. Efforts to recruit and/or retain under other available personnel systems were attempted, 

but unsuccessful, and these recruitment efforts must be completed prior to commencing 

recruitment under Title 42; 

8 
57 


86287.033

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.C. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

2. The recruitment efforts utilized for other available personnel systems were as extensive 

as those used to recruit under Title 42 (e.g., nationwide search, ads in professional 

journals, vacancy information shared with professional organizations, etc.); and 

3. The applicant's credentials, experience, and stature in the scientific community are 

commensurate with, and directly related to the position being filled. 

42-90 Conversions from Other Pay Systems 

Conversions are only to be used in exceptional circumstances as outlined in this policy. A 

scientist may only be converted to a 42 U.S.C. § 209(1) appointment from another pay 

system if he/she is appropriately peer-reviewed according to the requirements outlined in 

this instruction and OPDIY procedures and is determined to meet all the following 

criteria: 

I. Evidence of recognition as a national or international expert in the field, such as: 

specific experience, invited manuscripts, presentations, and consultations; receipt of 

honors and/or awards; or other recognition for noteworthy performance or 

contributions to the field; 

2. Evidence of original scientific or scholarly contributions of major significance in the 

field; 

3. Evidence ofleadership in the field; and 

4. Special knowledge and skills of benefit to the agency. 

42-100 Positions Designated as 42 U.S.c. § 209(1) 

A. There are some positions within HHS that require a level of scientific expertise that has 

historically not been successfully recruited or retained under regular civil service 

appointment. To expedite the recruitment process and limit the amount of time these 

positions remain vacant, a subset of high level, mission critical positions within each OPDIY 

may be designated as 42 U.S.c. § 209(1). This designation will allow such positions to be 

filled through 42 U.S.c. § 209(f) without the requirement to document efforts to fill the 

position through other available personnel systems each time the position is vacated and/or 

filled. In order to obtain this designation, OPDIYs must submit a request, in accordance 

with section 42-110 of this instruction, and obtain approval from the Assistant Secretary for 

Administration (ASA). 

B. The list of NIH-specific individual and categorical positions, identified in Appendix 3, are 

covered by this designation. 

42-110 Case Documentation and Approval Procedures 

A template to document the required justification for initial 42 U.S.C. §209(1) appointments is 

provided as Appendix I. The OPDIY must use this template, or develop an equivalent that 

documents how the criteria outlined in 42-80 of this policy have been met. 

9 
58 


86287.034

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.C. § 209(f) SPECIAL CONSULTANTS 

Issuance Date: February 15,2012 

A. Conversions 

Conversions are only to be used in exceptional circumstances as outlined in this policy. In 

addition, the OPDIV must document the results of the peer review, demonstrating that the 

employee meets the required criteria outlined in 42-90 of this policy. 

B. Positions Designated as 42 U.S.C. § 209(0 

For positions not identified in Appendix 3, OPDIVs may request this designation for specific 

positions. This designation must be approved for each specific position, or group of positions, by 

the ASA. In order to be considered for 42 U.S.C. §209(1) designation, the OPDIV must submit the 

following documentation to the HHS OHR Title 42 Program Manager: 

1. Historical data, including, but not limited to, current (not to exceed 5 years), local and 

national labor market analysis and workforce analysis, demonstrating that prior efforts to 

recruit and/or retain under other available personnel systems were attempted, but 

unsuccessful; and 

2. Description of the position, including the credentials and experience necessary for an 

incumbent to possess to be successful in the position. 

42-120 Benefits 

A. While the laws and regulations outlined in 5 U.S.C. and 5 C.F.R. do not apply to employees 

appointed under 42 U.S.C. § 209(1), the benefits available (e.g., life insurance, health 

insurance, retirement, etc.), as well as the criteria for eligibility are the same for both groups 

of employees. Specifically, employees appointed under 42 U.S.C. § 209(1) for more than 12 

months (with the exception of non-citizens in overseas locations) will receive benefits 

equivalent to those of employees appointed under Title 5. 

B. As noted above, although the laws and regulations outlined in 5 U.S.C and 5 C.F.R do not 

apply to employees appointed under 42 U.S.C. § 209(1), these employees are covered by the 

same leave provisions as employees appointed under Title 5. 

42-130 Awards 

Employees appointed under 42 U.S.C. § 209(1) are eligible for the following categories of awards: 

performance-based cash awards, onetime special act awards (including on the spot and time off 

awards), and honorary awards. 

42-140 Performance Management and Condnct 

A. All Title 42 employees must be on a performance plan that meets all requirements of the 

appropriate Departmental performance system. Ratings under the performance plan will be 

used as the basis for pay decisions. 

B. Title 42 employees must maintain acceptable performance and conduct in order to be retained 

in their positions. 

10 
59 


86287.035

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(f) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

42-150 Other Actions 

A. If an employee voluntarily or involuntarily separates from a Title 42 position and seeks to 

return to a non-Title 42 position, the employee may be considered in accordance with all civil 

service or Commissioned Corps requirements. Pay of Title 42 employees, upon converting to 

a non-Title 42 position, will be set no higher than the maximum General Schedule pay 

limitations under Title 5 for civil servants and regular pay tables (including any applicable 

special or professional pay) for Commissioned Corps officers. 

B. Prior to appointment or conversion to a Title 42 position, employees must be informed in 

writing that they are not entitled to Merit System Protection Board (MSPB) appeal rights 

under the Civil Service Reform Act (CSRA). 

42-160 Conduct Laws and Regulations 

Title 42 employees must comply with all ethical and conduct-related laws and regulations applicable 

to other Executive Branch employees. These include laws concerning financial interests, financial 

disclosure, and conduct regulations promulgated by the Department, by the Office of Government 

Ethics, and other agencies. 

42-170 Processing Appointments and Conversions to 42 U.S.C. § 209(f) 

A. Initial and Subsequent Appointments. Requests to appoint and/or convert individuals using 42 

U.S.c. § 209(1) will be processed in accordance with the OPM Guide to Processing Personnel 

Actions. 

B. Employees appointed or converted to a 42 U.S.C. § 209(1) position must sign a statement 

documenting their understanding that they are accepting an excepted service appointment and to 

acknowledge that they are not entitled to MSPB appeal rights under the CSRA' 

C. Appointment of Non-citizens 

Non-citizens may be appointed as permitted by law. The non-citizen must have an appropriate work 

visa. 

42-180 Program Review and Evaluation 

The ASA, Office of Human Resources, will periodically review appointments made under the 42 

U.S.C. § 209(f) authority and associated supporting documentation to ensure proper use. 

11 
60 


86287.036

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

APPENDIX 1: REQUIRED DOCUMENTATION FOR 

INITIAL APPOINTMENTS UNDER 42 U.S.c. § 209(1) 

The following information must be documented and maintained for each individual initial 

appointment made under 42 U.S.C. § 209(f). The information must be maintained by the OPDIV and 

made available upon request from the HHS OHR. 

POSITION SUMMARY: Provide a summary of the position, including major 

duties/responsibilities and required qualifications/experience. 

RECRUITMENT EFFORTS: 

A. Provide a summary of recruitment efforts to fill this position through other available personnel 

systems. Provide detailed information regarding recruitment strategies (e.g., USAJOBS, professional 

journals, professional organizations, etc.); number of applicants; and probable reasons recruitment 

efforts were unsuccessful. 

B. Provide a summary of recruitment efforts used to fill the position through Title 42, if different 

from those used for other personnel systems, please explain. 

CANDIDATES QUALIFICATIONS AND EXPERIENCE: Provide a summary of the candidate's 

credentials, experience, and stature in the scientific community and explain how they are 

commensurate with, and directly related to the position being filled. 

12 
61 


86287.037

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15, 2012 

APPENDIX 2: DOCUMENTATION CHECKLIST FOR 42 U.S.C. § 209(1) APPOINTMENTS 

For All Appointments be sure to include: 

o Statement of Duties 

o CV 

o Documentation to support positive education requirements (e.g., official transcript) 

o Statement signed by employee acknowledging he/she understands that he/she is 

accepting an excepted service appointment and is not entitled to MSPB appeal rights 

under the CSRA 

o Appropriate employment visa (if applicable) 

o Salary justification 

o Any other documentation deemed necessary by the OPDIV 

For Initial Appointments be sure to include: 

Summary of Recruitment Efforts and Supporting Documentation for Title 5 or Other 

Available Personnel System 

o Summary of Recruitment Efforts and Supporting Documentation for 42 U.S.C. § 209(f) 

o Qualification and Experience Summary 

For Conversion Actions be sure to include: 

o Peer Review Summary 

13 
62 


86287.038

HUMAN RESOURCES MANUAL 

Instruction 42-1: APPOINTMENT OF 42 U.S.c. § 209(1) SPECIAL CONSULTANTS 

Issuance Date: February 15,2012 

APPENDIX 3: NIH 42 U.S.C. § 209(1) OFFICIAL SCIENTIFIC 

INDIVIDUAL/CATEGORICAL DESIGNA nONS 

42 U.S.c. § 209(f) appointments may appropriately be made at the NIH ifin the designated official 

scientific individual/categorical position titles listed below. 

Senior Investigator (excluding Clinical Senior Investigators) 

NIH Distinguished Investigator 

NIH Clinical Track (HS) 

Investigator 

Staff Clinician 

Senim Clinician 

Scientific Executive 

NIH Deputy Director 

IC Director 

IC Deputy Director 

Scientific Director 

14 
63 

Mr. PALLONE. And, specifically, because I did mention before 

about this policy only applying to doctoral candidates, and I know 

you had mentioned the nurses, or it had come up about the nurses. 

And part of the manual change, it says that, under qualifications, 

it requires that appointees have a doctoral-level degree in a scientific discipline related to the position and professional stature 

that is commensurate with the duties of the position being filled. 

Prior HHS policy only required a bachelor’s degree. So it was, in 

fact, the case that, before, you could just have a bachelor’s degree, 

which is, I assume, the reference to the nurses. But it is not true 

under the revisions that they have made that we have now entered 

into the record. 

And the other thing I wanted to point out is that—and, again, 

this is my effort to try to make it clear that this is not or should 

not be partisan—that the EPA was added to this program in 2005, 

and that was under a Republican President and a Republican majority in the Congress. So it is not that this is something that has 

just existed under the Democrats. It has existed under both administrations. And in the case of HHS, they are clearly trying to rectify 

some of the problems pursuant to your recommendations. 

That is all, Mr. Chairman. I yield back. 

Mr. PITTS. All right. Thank you. 

And that concludes the questioning from our Members. Your report has raised a lot of questions. I am sure Members will have additional follow-up questions that they will submit in writing. 

I remind the Members that they will have 10 business days to 

submit questions for the record, and I ask the witnesses to respond 

to the questions promptly. Members should submit their questions 

by the close of business on Friday, September the 28th. 

And, without objection, the subcommittee is adjourned. 

[Whereupon, at 11:23 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

64 


86287.039

Statement of Rep. Henry A. Waxman 

Ranking Member, Committee on Energy and Commerce 

Subcommittee on Health Hearing on "Title 42-A Review of Special Hiring Authorities" 

September 14, 2012 

Since the I 940s, the Department of Health and Human Services (and its precursors) have 

been authorized -- under Title 42 of the United States Code -- to hire and set compensation for 

special consultants and fellows. The Environmental Protection Agency was granted similar, 

although more limited authority in 2005. 

This authority -- used by both Democrat and Republican administrations alike -- is 

known as the Title 42 hiring authority, or "Title 42" for short. Title 42 provides HHS (and the 

EPA) with the flexibility to hire top notch scientists, physicians, and others with expertise in 

specialty disciplines more quickly and to compensate them more competitively than otherwise 

would be allowed. As such, it has been an invaluable tool for HHS agencies such as NIH, CDC 

and FDA, and for the EPA, to recruit and retain the very best people in their fields. Indeed, just 

this week we learned of the ground-breaking work of one such Title 42 appointee. As reported 

in Wednesday's Washington Post, Dr. Neal Young, a NIH hematologist, has found the cure for 

aplastic anemia, a rare disease that shuts down the bone marrow's ability to make blood cells. 

Other NIH Title 42 appointees include Dr. Harold Varrnus, Director of the National Cancer 

Institute, and Dr. Tony Fauci, Director of the National Institute of Allergy and Infectious 

Diseases. NIH also used this authority to hastily hire needed experts who may not be as well 

known, to develop a vaccine in response to the HINI flu pandemic of 2009. 

Over the years and particularly in more recent times -- especially at NIH -- the use of 

Title 42 has increased significantly. According to both NIH and GAO, in 2010,25% of all NIH 

employees, and 44% of its researcher and clinical practitioner workforce, were Title 42 

appointees. Some of these individuals received compensation at or above executive level pay 

grades, including Executive Level One which provides for compensation of federal employees at 

a level of almost $200,000. Whether or not these numbers and these salary figures are too much -

- or maybe even not high enough -- is a matter that I'm not sure Congress is best equipped to 

answer. Our job, it seems to me, is to ensure that NIH and all health-related government 

agencies have the flexibility they need to recruit and retain extraordinary scientific and medical 

personnel- and that they use this flexibility appropriately. We simply should not settle for 

anything less. 

This is not to suggest that NIH should not comply fully with the requirements of Title 42, 

or provide and adhere to its own Title 42 guidance, or collect appropriate data on the use of Title 

42, or otherwise be accountable for its Title 42 activities. It absolutely should. And to the extent 

that NIH has not acted accordingly -- as NIH uncovered on its own and as documented in the 

GAO studies we will hear about today -- NIH must re-work its policies to make certain that its 

Title 42 authority is administered, managed, and enforced as it should be. We can't settle for 

anything less here as well. 
65 


86287.040

I understand that NIH is well on its way in addressing the issues that have been 

identified. We will follow its progress and are confident that what needs to be put right will be 

put right. 

In the meantime, we should not rush to judgment in terms of a legislative fix. Chairman 

Emeritus Barton should be commended for bringing this matter to the attention of the 

Committee. But I am concerned that his Title 42 bill may go too far; that in insisting on specific 

percentages of individuals who may be hired under Title 42 and restricting the number of such 

individuals paid above a certain threshold, his legislation may have the unintended effect of 

setting back NIH (and other HHS agencies) in terms of their ability to recruit and retain 

outstanding scientists, researchers, and physicians. Again, as is demonstrated by Dr. Young's 

extraordinary achievement described just days ago, that recruitment and retention process is 

working exceptionally well. We should, then, be very wary of trying to "fix" it. 

My thanks to our witnesses here today. I look forward to their testimony. 
66 


86287.041

THE COMMITTEE ON ENERGY AND COMMERCE 

MEMORANDUM 

September 12, 2012 

To: Health Subcommittee Members 

From: Majority Staff 

Re: Hearing on Title 42 

On Friday, September 14,2012, the Subcommittee on Health will hold a hearing entitled 

"Title 42 A Review of Special Hiring Authorities". The hearing will take place at 10:00 a.m. 

in 2123 Rayburn House Office Building. The subcommittee will examine the effect of TitIe 42 

on personnel appointments at the Department of Health and Human Services (HHS) and the 

Environmental Protection Agency (EPA) and their consistency with current Federal law and 

regulations. 

I. Witnesses 

Mr. Robert Goldenkoff 

Director, Strategic Issues 

Government Accountability Office 

Mr. Robert Cramer 

Managing Associate General Counsel 

Government Accountability Office 

II. Background on Title 42 

In 1944, under 42 U.S.c. sections 209 (f) and (g) of the Public Health Service Act 

(PHSA), authority was provided to appoint and set pay for special consultants and scientists to 

fill mission-critical positions in science and medicine in the Public Health Service (PHS). Since 

then, HHS has issued regulations that provide that special consultants can only be hired when the 

PHS cannot fill these positions through regular channels and that appointments be time limited. 

The 1993 Labor-HHS Appropriations Act provided further guidance related to caps on salaries 

and length of employment. The appropriations bill placed a permanent appropriation cap on the 

pay of special consultants and fellows appointed on a time limited basis. These sections of the 

PHSA are collectively referred to as Title 42. 

The use of Title 42 has grown significantly. HHS has cited difficulties in appointing 

qualified researchers and consultants as the main reason for its increased use. That dependence 

appears to have grown significantly in the past decade especially at the National Institutes of 
67 


86287.042

Majority Memorandum for the September 14, 2012, Health Subcommittee Hearing 

Page 2 

Health (NIH) where 25 percent of all employees and 44 percent of its researchers and clinical 

practitioners are Title 42 appointees. 

Although Title 42 is in the PHSA, since 2006 the EPA has used it to appoint 17 

employees. According to the EPA, the appointments are for scientific and management positions 

that would have been difficult to fill without offering salaries commensurate with the private 

sector. Fifteen of EPA's 17 Title 42 employees earned salaries over Executive Level IV in 2010. 

Congress has intermittently attempted to address the use of Title 42 at HHS and the EPA 

and ensure that its use complies with the guidance established in all the laws and regulations. Of 

specific concern are salary caps and the number ofHHS employees whose pay exceeds 

Executive Level III. From 1957 through 1993, a pay cap was included in each fiscal year 

appropriation and in FY1993, Congress made this cap permanent subject to section 5373 of Title 

5 of the U.S. Code. Despite this guidance, in 2010, 1,461 HHS Title 42 employees earned 

salaries over Executive Level IV, or $155,500. 

As a result of these differences, Congress asked the Government Accountability Office 

(GAO) to study the use of the Title 42 hiring authority and the extent to which HHS and EPA 

used this authority under section 209 (f) and (g) - to appoint and compensate employees since 

2006 and whether the agencies followed applicable policy and guidance for appointment and 

compensation. In addition, the GAO was asked to study whether there are statutory caps on pay 

for consultants and scientists appointed pursuant to 42 U.S.c. §§ 209(f) or (g), and specifically 

whether the pay cap under 5 U.S.C. § 5373 applies. 

GAO Reports on Title 42 

In July 2012, the GAO published two reports on the Title 42. One of those reports was a 

legal opinion on the statutory pay caps for those appointed under Title 42 authority. The other 

report was an audit of the use of Title 42 at HHS and EPA. 

The GAO legal opinion stated that the 1993 appropriations language unequivocally limits 

the pay of consultants and scientists appointed for limited periods of time pursuant to 42 U.S.C. 

§§ 209(f) or (g) at agencies that are funded by the Labor-HHS-Education Appropriations Acts. 

The program audit found that the use of special hiring authorities at HHS under 42 U.S.C. 

§§ 209(f) and (g) increased by 25 percent between 2006 and 2010. In addition, HHS does not 

have reliable data to manage and provide oversight of its use of Title 42 to determine if required 

guidance was followed. With respect to the EPA, GAO found that 15 of EPA's 17 Title 42 

employees earned salaries over Executive Level IV in 20 I O. EPA appointment and 

compensation practices were generally consistent with its guidance except for post-appointment 

ethics requirements. 

GAO recommended that HHS: (I) ensure section authority-209(f) or 209(g)-be 

consistently documented in personnel systems, (2) systematically document how policy 

requirements were fulfilled, and (3) ensure agency-wide policy provides guidance for 
68 


86287.043

Majority Memorandum for the September 14, 2012, Health Subcommittee Hearing 

Page 3 

documenting the basis for employee compensation. GAO recommends EPA develop and 

document a systematic approach for ensuring Title 42 employees are compliant with ethics 

requirements after appointment. 

III. Federal Legislation 

H.R. 6214 was introduced by Rep. Barton to limit the number and pay of individuals 

serving as special consultants, fellow, or other employees hired under subsection 207 (f) and (g) 

of the Public Health Service Act. In addition, the bill: 

• Limits the use of the provision to the Department of Health and Human Services; 

• Caps the number of hires under this authority to 5 percent of the total number of 

employees at HHS; 

• Ensures that Federal compensation may not exceed 150 percent of Executive Level I 

under section 5312- Title 5; 

• Allows up to 50 employees may be paid without regard to compensation limitation if the 

Secretary determines that the position is vital to the mission; and, 

• Requires a Report to Congress 6 months after enactment. 

The hearing will provide Members with an opportunity to examine the use of Title 42 

hiring authorities at HHS and EPA. In addition, it will review recommendations by the GAO to 

make the program more compliant. 

IV. Staff Contacts 

If you have any questions please contact Brenda Destro with the Committee staff at (202) 

225-2927. 
69 


86287.044

GAO 

July 2012 

GAO·12·692 

United States Government Accountability Office 

Report to Congressional Requesters 

HUMAN CAPITAL 

HHS and EPA Can 

Improve Practices 

Under Special Hiring 

Authorities 

GAO 

Accountability * Integrity * Reliability 
70 


86287.045
71 


86287.046

Contents 

Letter 

Appendix I 

Appendix II 

Appendix III 

Appendix IV 

Tables 

Background 4 

HHS Has Increased Its Use of Title 42, but More Reliable Data 

Could Improve HHS's Oversight 9 

HHS Did Not Consistently Adhere to Sections of Its Title 42 Policy 

and Lacks Guidance for Some Authority Provisions 18 

EPA Employs a Limited Number of Title 42 Fellows, Primarily in 

Leadership Roles 24 

EPA Appointment and Compensation Practices Were Generally 

Consistent with Its Guidance, but EPA Could Improve 

Resolution of Potential Conflicts oflnterest 28 

Conclusions 32 

Recommendations for Executive Action 33 

Agency Comments and Our Evaluation 34 

Objectives, Scope, and Methodology 38 

Comments from the Department of Health and Human Services 40 

Comments from the Environmental Protection Agency 44 

GAO Contact and Staff Acknowledgments 47 

Table 1: HHS Operating Divisions IIave Increased Their Use of 

Sections 209(f) and (g) Appointments, 2006 through 2010 10 

Table 2: NIH Relied on Title 42 for a Greater Percentage of Its Total 

Workforce and Research and Clinical Practitioners than 

FDA and CDC, 2010 12 

Table 3: Most Common Title 42 Occupations at NIH and 

Characteristics 13 

Table 4: HHS Title 42 Employees with Base Salaries within or 

Exceeding Federal Executive Salary Levels, 2010 15 

Pagel GAOw12·692 Human Capital 
72 


86287.047

Figures 

Table 5: HHS Compliance with Certain Sections of Its Policy for 

Hiring and Converting Employees Under Section 209(f) for 

Cases Reviewed 20 

Table 6: Number of EPA Title 42 Fellows with Salaries in Federal 

Executive Salary Levels, 2010 27 

Table 7: EPA Appointment and Compensation Practices Were 

Generally Consistent with Gnidance 29 

Figure 1: HHS Organizational Structure 6 

Figure 2: Most Title 42, Sections 209(f) and (g) Employees Served 

at NIH, FDA, or CDC, 2010 9 

Figure 3: Cumulative Number of EPA Title 42 Staff, 2006 through 

2011 25 

Abbreviations 

CDC 

EHRP 

EPA 

FDA 

HHS 

NCCT 

NIH 

OGC 

ORD 

PHS 

Centers for Disease Control and Prevention 

Enterprise Human Resources and Payroll 

Environmental Protection Agency 

Food and Drug Administration 

Department of Health and Human Services 

National Center for Computational Toxicology 

National Institutes of Health 

Office of General Counsel 

Office of Research and Development 

Public Health Service 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this materia! separate!y. 

Pagel! GAO-12-692 HUman Capital 
73 


86287.048

United States Government Accountability Office 

Washington, DC 20548 

July 9,2012 

The Honorable Denny Rehberg 

Chairman 

Subcommittee on Labor, Health and Human Services, Education, and 

Related Agencies 

Committee on Appropriations 

House of Representatives 

The Honorable Cliff Stearns 

Chairman 

Subcommittee on Oversight and Investigations 

Committee on Energy and Commerce 

House of Representatives 

The Honorable Joe Barton 

House of Representatives 

The Honorable Michael Burgess 

House of Representatives 

The Department of Health and Human Services (HHS) and the 

Environmental Protection Agency (EPA) are among the agencies that 

have cited difficulties in recruiting and retaining individuals in medicine, 

science, engineering, and other related fields in support of their missions. 

One reason for these difficulties, according to agency officials, is salaries 

available under typical federal government hiring authorities are 

sometimes not competitive with those in the private sector for individuals 

in these highly specialized and competitive fields. Since 2001, we have 

designated strategic human capital management a government-wide 

high-risk area in part because of the need to address current and 

emerging critical skills gaps that are undermining agencies' abilities to 

meet their missions. ' 

Effective use of various human capital flexibilities is one way agencies 

can improve their efforts to recruit, hire, and manage their workforces. 

Such flexibilities, provided under 42 U.S.C. §§209(f) and 209(g)-referred 

'GAO. High·Risk Series: An Update, GAO·11·278 (Washington. D.C.: Feb. 2011). 

Page 1 GAO~12·692 Human Capital 
74 


86287.049

to in this report generally as Title 42 or specifically as sections 209(1) or 

(g)-are available only to HHS and EPA" Section 209(f) authorizes the 

employment of special consultants to assist and advise in the operation of 

the Public Health Service (PHS), while section 209(g) authorizes 

fellowships in the PHS for scientists who may be assigned to studies and 

investigations for the term of their fellowships. HHS has used sections 

209(1) and (g) and EPA has used section 209(g) to appoint individuals 

from the private sector and academia as well as to convert federal 

government employees under other pay systems-such as the General 

Schedule-to Title 42. 

In implementing Title 42, the agencies have set higher pay limits than 

those provided under typical civil service hiring authorities. 3 Per HHS 

policy, the annual base salary for many apPOintments under Title 42 at 

HHS cannot exceed $250,000 per calendar year, with total compensation 

not to exceed $275,000 unless approved by the Secretary.4 In a related 

effort to this audit, we are issuing a legal opinion on whether there are 

any statutory caps on pay for consultants and fellows appointed under 

sections 209(1) and (g). Similarly, EPA policy caps annual base salary for 

Title 42 employees at $250,000, with total compensation that may not 

exceed $275,000. According to HHS and EPA officials, the pay setting 

flexibility is needed to compete with the private sector and academia to 

recruit and retain critical personnel. Because agencies exercise broad 

discretion in their use of Title 42 authority, it is important that they have 

robust pOlicies and internal control mechanisms in place to implement 

and monitor use of the authority. To obtain a better understanding of the 

appointment and compensation practices under sections 209(1) and 

209(g), you asked us to assess the extent to which HHS and EPA (1) 

have used authority under sections 209(f) and (9) to appoint and set pay 

has other special hiring authorities provided under Title 42 of the U.S. Code, but this 

report deals exclusively with the special hiring authorities under 42 U.S.C. §§ 209(f} and 

(g). 

3Most federa! employees are paid under the General Schedule. The highest base pay 

amount under the General Schedule in 2012 is $155,500. 

4The salary and compensation limits were lowered in HHS policy issued in February 2012. 

In March 2007, HHS limited annual base salary for employees hired under section 209(f) 

to $350,000 and $375,000 in total compensation. These higher limits were in place during 

most years of our review of HHS's Title 42 use (2006 through 2010). Tota! compensation 

at HHS includes base pay; recruitment and retention incentives; and cash awards, such 

as performance bonuses. 

Page 2 GAO·12·692 Human Capital 
75 


86287.050

for employees since January 2006, and (2) have followed applicable 

agency policy, guidance, and internal controls for appointments and 

compensation. 5 

To assess the extent to which HHS and EPA have used authority under 

sections 209(1) and (g) to appoint and set pay for employees, we obtained 

agency personnel data that we analyzed to describe: (1) appointment and 

compensation trends at HHS and EPA since 2006, including the number 

of Title 42 employees; (2) the types of occupations and positions held by 

Title 42 employees; (3) compensation rates, including the number of Title 

42 employees earning more than certain federal salary levels; (4) the 

number of Title 42 employees receiving nonsalary payments; and (5) the 

number of civil servants that have been converted to Title 42 

appointments and the compensation changes associated with those 

conversions. We conducted a variety of data tests and interviews with 

agency officials to correct and refine HHS Title 42 data and were able to 

develop a data set that was reliable for our purposes. For EPA, we 

performed data testing, interviewed agency officials, and compared data 

to information found in official agency documents and determined that 

EPA's data were reliable for our purposes. To determine the extent to 

which HHS and EPA have followed applicable policy, guidance, and 

internal controls, we reviewed the policies and guidance at HHS and EPA 

to understand the conditions under which Title 42 employees are to be 

recruited, appointed, compensated, and managed. We conducted 63 

case file reviews at HHS and 10 at EPA to document appointment and 

compensation practices and compared those practices to agency policies 

and guidance. Those cases were chosen based on a random selection of 

cases that had characteristics related to various areas of HHS's and 

EPA's Title 42 policy and guidance. We determined the number of case 

file reviews was sufficient to identify incidences where practices were or 

were not consistent with policies and guidance, but our findings are not 

generalizable to the entire population of Title 42 employees at HHS or 

EPA. See appendix I for a more detailed discussion of our objectives, 

scope, and methodology. 

SAccording to HHS hUman resource officials, personne! data prior to 2006 were likely not 

reliable for our analysis. EPA began using Title 42 in 2006. HHS data are available 

through the end of 2010, the last year of complete data available at the time of this study; 

and at EPA, through the end of 2011. 

Page 3 GAO-12-692 Human Capital 
76 


86287.051

Background 

We conducted this performance audit from May 2011 through July 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

The authority to appoint and set pay for special consultants and fellows 

was provided as part ofthe Public Health Service Act in 1944' Section 

209(1) authorizes the employment of special consultants to assist and 

advise in the operation of the PHS. The PHS is comprised of most 

operating divisions within HHS-including the National Institutes of Health 

(NIH), the Food and Drug Administration (FDA), and the Centers for 

Disease Control and Prevention (CDC)-as well as some staff divisions 

within the Office of the Secretary. See figure 1 for HHS's organizational 

structure, including those operating divisions and main staff divisions 

considered to be within the PHS. Section 209(g) authorizes fellowships in 

the PHS for individual scientists who may be assigned for studies and 

investigations either in the United States or abroad. Sections 209(1) and 

(g) both authorize the establishment of regulations to further implement 

these authorities. HHS Office of the Secretary develops agencywide 

policy and guidance and operating divisions may set additional or 

supplemental policy as necessary. In 2005, Congress provided EPA with 

the authority to use section 209 to make a limited number of 

appointments in its Office of Research and Development (ORD).7 

Congress initially granted this authority to EPA for fiscal years 2006 

through 2011, but Congress amended the authority twice and currently 

EPA is permitted to employ up to 30 persons at anyone time through 

l. No. 78-410, § 208(c) and (d). 58 Stat 682, 686 (July 1. 1944). These authorities 

were expansions of employment authorities originally provided to the National Cancer 

Institute in 1937. H. R. Rep. No. 1364 (1944). 

7pub.l. No. 109--54, Title 11.119 Stat 499, 531 (Aug 2,2005). Although the legislation 

refers only to section 209, the legislative history of these grants of authority to EPA 

provides the intent was to grant EPA use of the authorities under sections (f), (9), and (h) 

of section 209. Subsection (h) of section 209 permits noncitizens to be apPointed and 

compensated under sections 209(1) and (g). 

Page4 GAO·12·692 Human Capital 
77 


86287.052

fiscal year 2015. 8 EPA issued regulations in 2006 implementing this 

authority, which closely follow HHS regulations.' 

L. No. 111-8, title 11, 123 Stat. 524, 729 (Mar. 11, 2009) and Pub. L. No. 111-88, 

title II, 123 Stat. 2904, 2938 (Dec. 30, 2009). 

'40 C.F.R. part 18. 

Page 5 GAO-12-692 Human Capital 
78 


86287.053

Figure 1: HHS Organizational Structure 

Chief of Staff 

Operating Divisions 

_ Highlighted units are part of the Public Health ServiCe. 

Sourco: GAO 8nalys(s Qf HH$ Gala 

HHS regulations for section 209(1) provide that special consultants may 

only be appointed when the PHS cannot obtain services through regular 

PageS GAO~12~692 Human Capital 
79 


86287.054

civil service appointments or under the compensation provisions of the 

Classification Act of 1949.'0 The regulations further provide that rates of 

compensation for special consultants are to be set in accordance with 

criteria established by the Surgeon General. The Surgeon General is part 

of the Office of the Assistant Secretary for Health. HHS has used this 

authority, for example, to appoint doctors and others with expertise in 

specialty fields to initiate or provide assistance in conducting medical 

research and set pay for those individuals at rates above those allowed 

under other federal government pay systems. 

HHS regulations covering section 209(g) provide that fellowships may be 

provided to secure the services of talented scientists for limited duration 

(up to 5 years) for health-related research, studies, and investigations." 

The regulations further provide that the Secretary may authorize 

procedures to extend the term of fellowships, may authorize stipends for 

the fellows, and is responsible for establishing appOintment procedures 

beyond those set forth in the regulations. 12 

Some Title 42 employees earn pay within or exceeding pay levels found 

in the Executive Schedule. The Executive Schedule is a five-level, basic 

pay schedule applicable to the highest-ranking executive appointments in 

the federal government. Executive Schedule pay rates range from 

Executive Level V ($145,700 since 2010) to Executive Levell ($199,700 

since 2010). 

Only HHS and EPA are authorized to use Title 42 hiring authority. By 

contrast, regular hiring authorities such as those under title 5 of the U.S. 

Code-commonly referred to as Title 5-may be used by any federal 

agency." Pursuant to HHS and EPA pOlicy, employees at HHS and EPA 

originally hired under Title 5 or other authorities may be converted to Title 

42 in some circumstances. Under these pOlicies, employees hired under 

C.F,R. § 22.3. The Classification Act of 1949 established the General Schedule, a 

single, nationwide pay structure for federal white..coUar employees that today consists of 

15 grades, each with 10 pay steps. 

"42 C.F.R. § 61.32. 

1242 C.F.R. §§ 61.33 and 61.37-38. 

13A small number of agency~specjfic personnel authorities, including hiring authorities, are 

contained in subpart I of part II! of Title 5. For example, personnel flexibiHties relating to 

the Internal Revenue Service are contained in chapter 95 of Title 5. 

Page 7 GAO-12~692 Human Capital 
80 


86287.055

Title 42 are eligible for performance bonuses, incentives, and other 

nonsalary payments made available to federal employees compensated 

under Title 5. 

Title 42 employees most frequently work within one of three operating 

divisions: 

NIH is the nation's medical research agency and is comprised of the 

Office of the Director and 27 institutes and centers, including the 

National Cancer Institute; National Institute on Aging; National Heart, 

Lung, and Blood Institute; and the National Center for Complementary 

and Alternative Medicine. Each institute and center has its own 

specific research agenda, often focused on a particular disease or 

body system. As the central office at NIH, the Office of the Director 

establishes NIH-specific policy and oversees the institutes and 

centers to ensure they operate in accordance with said pOlicy. While 

most of its budget goes to extramural research personnel at more 

than 3,000 universities and research institutions, NIH also has 

intramural research laboratories on the NIH main campus in 

Bethesda, Maryland. The main campus is also home to the NIH 

Clinical Center, which is the largest hospital in the world totally 

dedicated to clinical research. 

FDA is responsible for, among other things, protecting the public 

health by assuring the safety, efficacy, and security of human and 

veterinary drugs, biological products, medical devices, the nation's 

food supply, cosmetics, and products that emit radiation. FDA is also 

responsible for regulating tobacco products. 

CDC conducts activities such as identifying and defining preventable 

health problems and maintaining active surveillance of diseases; 

serving as the PHS lead agency in developing and implementing 

operational programs relating to environmental health problems; and 

operational research aimed at developing and testing effective 

disease prevention, control, and health promotion programs. 

EPA uses section 209(g) as the basis for hiring some scientists within 

ORO, the scientific research arm of EPA. ORO's work at EPA laboratory 

and research centers provide the science and technology to identify 

environmental hazards, assess risks to public health and ecosystems, 

and determine how best to control or prevent pollution. According to EPA 

documents and officials, EPA uses Tille 42 to secure the services of 

experienced and talented scientists for renewable appointments where, 

because of the nature of the work and expertise needed, regular hiring 

PageS GAO-12~692 Human Capital 
81 


86287.056
82 


86287.057

while declining by 48 percent at the Office of the Secretary and all other 

operating divisions. 

Table 1: HHS Operating Divisions Have Increased Their Use of Sections 209(1) and 

(9) Appointments, 2006 through 2010 

Percent 

Operating division 2006 2007 2008 2009 2010 changea 

NIH 4,238 4,389 4,569 4,721 4,879 15% 

559 584 595 816 862 54 

512 603 796 929 81 

Source GAO analysis of HHS data 

aFigures in parentheses indicate a decrease. 

The increased use of Title 42 authority came during a period when HHS 

made recruiting and retaining mission-critical elements of its workforce a 

priority. HHS's 2007-2012 StrategiC Plan included strategic objectives: (1) 

recruiting, developing, and retaining a competent heatth care workforce, 

and (2) strengthening the pool of qualified health and behavioral science 

researchers, HHS officials generally attributed the increases in Title 42 

employees to the agency's response to urgent public health matters and 

effects of the economic downturn on the private sector and academia, 

which, according to officials, made the agency more attractive to 

prospective or on-board employees. Specifically, according to HHS: 

The 15 percent increase from 2006 through 2010 at NIH can be 

attributed, in part, to the effects of the economic downturn on the 

biomedical research labor market. Officials told us that as extramural 

research funding available in the private sector and academia is 

shrinking, NIH is able to use Title 42 to more successfully recruit and 

retain biomedical investigators and clinical specialists. 

The spike in Title 42 appointments at FDA in 2008 and 2009 is a 

result of the Food and Drug Administration Amendments Act of 2007 

and the Food Protection Plan, FDA's strategy for protecting the 

Page 10 GAO~12-692 Human Capital 
83 


86287.058

nation's food supply.'· Additionally, in 2008 FDA launched its first 

class of Commissioner's Fellows (hired under section 209 (g) for up to 

a two year period) beginning with 50 fellows, another class of 50 in 

2009, and a third class of 45 in 2010'" 

At CDC, increased use of Title 42 was attributed to the urgency of 

certain programs such as the overseas Global AIDS Program and 

those under the Office of Public Health Preparedness and Response. 

For these programs, officials told us they needed employees with 

specialized scientific skills or training and experience and would not 

have been able to obtain them without Title 42. 

As discussed later, we were unable to determine which section 

authority-sections 209(f) or (g)-was used more often because HHS 

section authority data was not reliable for this purpose. 

As shown in table 2, NIH relies on Title 42 authority for a greater 

percentage of its total workforce than does FDA and CDC. In 2010, 25 

percent of all NIH employees were Title 42 employees, while 10 percent 

of CDC employees and 6 percent of FDA employees were Title 42. NIH 

relied on Title 42 authority for a substantial portion--44 percent-of its 

total research and clinical practitioner workforce. 18 

Food and Drug Administration Amendments Act of 2007, among other things, 

increased FDA's oversight responsibilities for food, drug, and medical device safety. Pub. 

L. No. 110-85, 121 Stat 823 (Sept 27, 2007). 

17FOA offers the Commissioner'S Fellowship Program for health professionals and 

scientists to receive training and experience at the FDA. Fellows are to explore a specific 

aspect of FDA regulatory science including biology, physics, and epidemiology. 

18To determine the number of researchers and clinical practitioners, we counted the 

number of operating division employees categorized as providing research, development, 

or clinical practice services in the Office of Personnel Management's Central Personnel 

Data File, Researchers are categorized as those who provide systematic, critical, 

intensive investigation directed toward the development of new or fuller scientific 

knowledge of the subject studied, Clinical practitioners are those who provide direct 

clinical and related medica! services to patients/clients including examination, testing, 

diagnosis, treatment, therapy, casework, counseling, disability evaluation, and related 

patient care services. We also included those categorized as in development Those 

individuals provide systematic application of scientific knowledge directed toward the 

creation of new or substantially improved equipment, devices, systems, mathematical 

models, and others, 

Page 11 GAO-12-692 Human Capital 
84 


86287.059

Table 2: NIH Relied on Title 42 for a Greater Percentage of Its Total Workforce and Research and Clinical Practitioners than 

FDA and CDC, 2010 

Title 42 percentage of Title 42 percentage of 

Title 42 Total operating total operating Total researchers and researchers and clinical 

Agency employees division workforce division workforce clinical practitioners practitioners 

NIH 4,879 

FDA 862 

CDC 929 

Title 42 Employees Serve 

in Various Functions 

19,292 25% 11,040 44% 

14,617 10,025 

9,707 10 5,817 16 

SOUfCe. GAO analysIs of HHS and CPDF data 

Title 42 employees at HHS serve in a variety of functional areas, including 

scientific and medical research support and in senior, director-level 

leadership positions, Base salary ranges for Title 42 employees varied by 

operating division and occupation, In 2010, almost 60 percent of Title 42 

employees at NIH served in one of five general occupations: staff 

sCientist, research fellow, senior investigator, clinical research nurse, and 

clinical fellow, Table 3 describes some of the general responsibilities and 

duties, educational characteristics, and salary data for these occupations 

at NIH, 

Page 12 GAO~12~692 Human Capital 
85 


86287.060

Table 3: Most Common Title 42 Occupations at NIH and Characteristics 

occupation (number of Title 42 

employees in 2010) 

Staff Scientist (1,103) 

Research Fellow (666) 

Senior Investigator (521) 

Clinical Research Nurse (347) c 

Clinical Fellow (249) 

Characteristics 

Supports the long-term research of a senior investigator and independently 

designs experiments, but does not have 

responsibilities for initiating new 

research programs 

Usually has a doctoral degree 

Scientists obtaining experience in 

bfomedica! research while providing a 

service relevant to the NIH's program 

needs 

Has a doctoral degree 

Has been granted tenure. b Some senior 

investigators are assigned 

organizational responsibilities in the 

institute or center, that is, section or 

branch chief 

Has a doctoral degree 

Specializes in the care of research 

participants and is responsible for 

assuring participant safety, fonnulating 

patient care plans, integrity of protocol 

implementation, accuracy of data 

collection, and recording 

Nursing degree or diploma from a profession a! nursing program 

Participates in protocol~based clinical 

research (i.e., research with people 

serving as volunteer participants) as well as laboratory research 

Has a doctoral~level health degree with 

interest in biomedical research relevant 

to NIH program needs 

SOUfce' GAO analySIS of Hl-lS data and documen1s 

Base salary range: $82,000-200,000 

Average base salary: $118,000 

Median base salary: $114,000 

Base salary range: $45,000-112,000 

Average base salary: $70,000 

Median base salary: $69,000 

Base salary range: $117,000-350,000 

Average base salary: $192,000 

Median base salary: $195,000 

Base salary range: $62,000-96,000 

Average and median base sarary: 

$78,000 

Base salary range: $57,000-137,000 

Average base safary: $84,000 

Median base salary: $82,000 

aSalary figures as of 201 O. Atl figures are fOunded to the nearest thousand dollars. 

bTenure at NIH differs from tenure at an academic institution. Tenure at NIH is defined as the long~ 

term commitment of salary, personnel. and research resources needed to conduct an independent 

research program within the scope of the institutes' missions, and subject to regular review. Tenure 

may be conferred on Title 42 employees despite the nonpermanent nature of the position. 

CAs part of the sunsetting of the Clinical Research Support pilot, NIH is currently phasing out Title 42 

apPOintments for nurses. 

At FDA and CDC, the most common occupation of Title 42 employees is 

a fellow. In 2010, 340 (39 percent) of FDA's Title 42 employees were staff 

fellows. These positions are for promising research and regulatory review 

scientists. In general, staff fellows at FDA conduct or support research, 

Page 13 GA().12·692 Human Capttal 
86 


86287.061

Some Title 42 Employees 

Are Paid Above Executive 

Salary Levels 

provide technical direction and supervision to other researchers, publish 

scientific articles, and review contract and grant proposals designed to 

support their research projects. Staff fellows must have a doctoral degree 

in bio-medical, behavioral, or related science and, according to FDA 

policy, total compensation may not exceed certain pay limits ($155,500 in 

2010) unless the Director of Human Resources and Management and 

Services grants an exception. FDA staff fellows' base salary range in 

2010 is approximately $42,000 to $224,000, with an average base salary 

of about $96,000 and a median salary of about $92,000. Three of 340 

staff fellows at FDA earned more than $155,500 in 2010. 

Of CDC's Title 42 employees in 2010, 687 (74 percent) were senior 

service fellows or associate service fellows appointed to study areas such 

as basic and applied research in medical, physical, biological, 

mathematical, social, biometric, epidemiological, behavioral, computer 

sciences, and other fields directly related to the mission of CDC, Senior 

service fellows must have a doctoral degree and associate service fellows 

must have a master's degree, Senior service fellows had a base salary 

range in 2010 of approximately $49,000 to $155,500, with an average 

base salary of about $103,000 and a median salary of about $100,000, 

Associate service fellows had a base salary range of approximately 

$44,000 to $93,000, with an average base salary of about $69,000 and a 

median salary of about $71,000, 

The average base salary for all HHS Title 42 employees in 2010 was 

about $116,000 and the median salary was about $101,000, More than 

one-fifth of all Title 42 employees at HHS, however, earned a base salary 

above Executive Level IV ($155,500 in 2010), Congress regularly refers 

to executive salary levels in order to express minimum or maximum levels 

of pay authorized for positions in the federal government. For example, 

Congress has imposed a cap of Executive Level IV on salary (Le" basic 

pay) rates where pay is fixed by administrative action under 5 U,S,C, § 

5373, In a related effort to this audit, we are issuing a legal opinion on 

whether there are any statutory caps on pay for consultants and fellows 

appointed under 42 U,S,C, §§ 209(1) or (9), including whether the cap 

under section 5373 applies, Table 4 shows the number of Title 42 

employees whose base salary is within or above the various Executive 

Salary Levels in 2010, 

Page 14 GA0-12-692 Human Capital 
87 


86287.062

Table 4: HHS Title 42 Employees with Base Salaries within or Exceeding Federal 

Executive Salary Levels, 2010 

Executive level 

At or above Executive Levell ($199,700) 

Within Executive Levels I and II ($179,700-199,699) 

Within Executive Levels II and III ($165,300-179,699) 

Within Executive Levels III and IV ($155,500-165,299) 

Total 

Source GAO analysIs of HHS data 

Number of Title 42 

employeesa 

629 

319 

295 

218 

1,461 

aThe remaining 5,236 Tit!e 42 employees had salaries below Executive leveilV ($155,500) 

HHS has converted a number of employees from positions under the 

General Schedule or other pay systems to positions under Title 42. Of the 

1,183 new Title 42 appointees in 2010, 45 ofthem-or about 4 percentwere current HHS employees that were converted to Title 42 positions. 

Thirty of these conversions occurred at NIH. We also found that 

employees converted to Title 42 from other pay systems generally earned 

higher compensation than in their previous position. Employees 

converted in 2010 eamed, on average, $34,000 more in base salary than 

eamed in their previous position. However, many did not receive the 

same amount of nonsalary payments (including retention incentives) 

received while employed under the General Schedule or other pay 

system. Therefore, the average increase in total compensation (base 

salary and incentive or other nonsalary payments) was about $14,000 in 

2010. 

Under HHS policy, Title 42 employees are eligible to receive performance 

bonuses; recruitment, retention, and relocation incentives; and other 

nonsalary payments that are available to other HHS employees.19 In 

2010, HHS issued nonsalary payments to 6,336 of its 6,697 Title 42 

employees.20 Seventy-one percent of Title 42 employees eamed ratingsbased individual cash awards. less than 1 percent (60) of Title 42 

19According to HHS, these nonsalary payments are not made under the Title 5 authorities 

providing for such payments, but rather are made under the compensation authority of 42 

U.S.C. § 209m and (9). 

20The dollar value of these nonsa!ary payments were not available on an individual basis 

in the data provided by HHS, and as a result we could not determine the range or average 

amount of the various types of nonsaiary payments. 

Page 15 GA()..12·692 Human capital 
88 


86287.063

Does Not Have 

Reliable Data on the Use of 

Its Title 42 Authority 

employees received nonsalary payments in the form of recruitment, 

retention, or relocation incentives." 

According to senior officials at HHS's human resource office and NIH, 

Title 42 authority provides two primary benefits-appointment agility and 

compensation flexibility. These officials said appointment agility enables 

the agency to hire scientists, doctors, and other consultants to quickly fill 

knowledge, skill, and ability gaps so that medical research can move 

forward and to respond to medical emergencies. For example, according 

to HHS officials, the agency used Title 42 authority to quickly hire experts 

needed to develop a vaccine in response to the H1 N1 flu pandemic of 

2009. Appointment agility is also important because many research 

projects, particularly those at NIH, are not meant to be long-term and Title 

42 appointments can align with project time frames better than hiring fUIItime permanent staff under regular hiring authorities. In some cases, the 

temporary appointment of a researcher with highly-specialized skills to 

assist with a limited-scope, limited-duration study may be more 

appropriate than a permanent position. 

According to officials, compensation ftexibility helps HHS compete with 

the private sector and academia to hire and retain highly qualified 

employees with rare and critical skill sets, such as neuroscientists, 

applied researchers in dietary intakes, and engineers that can operate 

particle accelerators. HHS human resource officials stated the salaries 

HHS can offer to its top researchers are often not commensurate with 

private sector salaries. However, they said the higher compensation limits 

under Title 42 combined with other benefits-such as name recognition 

and access to advanced research equipment and technology not often 

available in the private sector or academia-can help offset 

compensation disparities and make HHS attractive to researchers, 

doctors, and scientists. 

Because HHS does not consistently electronically record the authority 

under which many of its Title 42 employees were appointed, the number 

of employees hired under either section 209(f) or (g) could not be 

determined. When an employee is hired under Title 42 authority, HHS 

21Six of our case studies were Title 42 employees receiving an incentive payment, and in 

all six cases there was a documented basis supporting the need for the incentive< 

Page 16 GAO·12-692 Human Capital 
89 


86287.064

human resource officials create a personnel record in its central 

personnel transaction system, the Enterprise Human Resources and 

Payroll (EHRP) system. A required field in the personnel record exists to 

select a code from a drop-down menu designating the general authority 

under which the individual was hired, such as Title 42 or Title 5 authority. 

The personnel record also contains an open-ended text field to manually 

enter a specific section authority such as sections 209(1) or (g), applicable 

to Title 42 authority. Our analysis of HHS data found thousands of cases 

where the section authority applicable to Title 42 was not recorded in 

EHRP. We also found that when the section authority field was used, 

there were more than 400 different types of entries made in the EHRP 

records. 

According to HHS officials, there are some data elements in the EHRP 

system-including the section authority under Title 42-that are 

unreliable. The majority of the unreliable data elements are those from 

nonrequired data entry fields. Whereas required fields must be completed 

before a personnel action is saved in the system, Title 42 section 

authority is a free-form, open-ended field and there is no system control in 

place to ensure the field is recorded or recorded accurately prior to saving 

the personnel action. Our case reviews found the section authority for 

appointment-such as sections 209(1) or 209(g)-was always 

documented on hard copy personnel action forms, but in many cases was 

not recorded in personnel records in the EHRP system. 

We have previously reported that effective workforce planning and 

management require that human capital staff and other managers base 

their workforce analyses and decisions on complete and accurate 

personnel data. 22 The lack of reliable information in this area may 

preclude HHS, Congress, and other organizations from providing effective 

oversight of the Title 42 program and evaluating its effectiveness. 23 For 

example, the lack of section authority data in EHRP has made it difficult 

for HHS to provide accurate headcounts of employees hired under 

sections 209(1) or (g) and resulted in HHS overstating the number and 

22GAO, Foreign Assistance: Strategic Workforce Planning Can Help USAID Address 

Current and Future Challenges, GAO-03-946 (Washington, D.C.: Aug. 22, 2003). 

23We conducted a variety of data tests and interviews with agency officials to correct and 

refine HHS Title 42 data and were able to develop a data set that was reliable for the 

purposes of this report. 

Pag& 17 GAO-12-692 Human Capital 
90 


86287.065

HHSDidNot 

Consistently Adhere 

to Sections of Its Title 

42 Policy and Lacks 

Guidance for Some 

Authority Provisions 

Section 209(1) Hiring and 

Conversions 

operating division of its employees hired under these sections to 

oversight bodies, including Congress, and in response to this audit. We 

identified more than 600 instances where HHS erroneously included 

employees in its data submission to us that were not appointed under 

sections 209(1) or (g). Some erroneous cases included individuals we 

later found were hired under appointing authorities other than sections 

209(1) or (g), including appointing authorities under 42 U.S.C. §§ 247b-8 

and 210(g). One result of including these cases in error was HHS 

reported it had made appointments under 209(1) or (g) at the Centers for 

Medicare and Medicaid Services, which would be prohibited by law.24 Our 

analysis found these appointments were made under different authorities. 

HHS officials acknowledged there were potentially many cases included 

that were not employees hired under sections 209(1) or (g) as it was 

sometimes difficult to discern from available data whether employees 

were hired under sections 209(1) or (g), rather than other authorities under 

Title 42. According to human resource officials, when attempting to report 

on the agency's Title 42 employees, they chose to include questionable 

cases rather than risk an undercount. 

HHS did not consistently adhere to certain sections of its policy for hiring 

and converting employees under section 209(1). We conducted 28 case 

file reviews of apPOintments made under existing section 209(1) policy to 

determine the extent to which HHS practices were consistent with its 

24HHS may only use sections 209(f) and (g) for appointments within PHS, According to 

HHS, the Centers for Medicare and Medicaid Services is not an operating division within 

the PHS. 

Page 18 GAO·12..s92 Human Capital 
91 


86287.066

policy.25 While not generalizable across the population of Title 42 

employees, the case file reviews indicate that HHS appointment practices 

are consistent with some aspects of its section 209(1) policy. For example, 

all appointees met education requirements for the type of scientific 

position being filled. While not an explicit requirement of the policy, HHS 

consistently documented the basis for compensation and any recruitment 

or retention incentives provided to section 209(1) employees. In some 

cases, however, HHS did not consistently adhere to its requirements, as 

shown in table 5. 

Personnellns!ruc!ion 42-1 (Augus! 2004). 

Page 19 GAO·12·692 Human Capital 
92 


86287.067

Table 5: HHS Compliance with Certain Sections of Its Policy for Hiring and Converting Employees Under Section 209(f) for 

Cases Reviewed 

Appointment requirement 

ApPointments under section 209(f) may only be used to fill 

scientific positions. 

Appointments can on!y be made after other availab!e personne! 

systems-including Tit!e 5, the Senior Biomedical Research 

Service, and PHS Commissioned Corps-have failed to yield 

candidates that possess critica! scientific expertise. These 

recruitment and retention efforts shall be documented prior to 

making an appointment under section 209(f). 

Conversions from other pay systems are only to be used in 

exceptional circumstances as outlined in this policy. A scientist 

may only be converted to {209(f}] from another pay system if he or 

she is appropriately peer-reviewed according to operating division 

procedures and determined to meet all of the following criteria: 

Evidence of recognition as a national or international expert in 

the field. 

Evidence of original sCientific or scholarly contributions of 

major significance in the field. 

Evidence of leadership in the field equivalent to a full-tenured 

professor in academia. 

Special knowledge and skills of benefit to the agency. 

In order to determine qualifications, supervisors must prepare a 

narrative statement fully describing the scientific duties and 

responsibilities and the education and experience to perform 

those duties. 

All appointees must meet positive education requirements for the 

type of scientific position being filled, which must include, at a 

minimum, a bachelor's degree in a scientific discipline directly 

related to the position. a In addition, appOintees must have 

professional experience and stature that is commensurate with 

the duties of the position being filled. 

Observations 

In 5 of 28 cases, it was unclear or questionable whether the 

individuals were performing scientific duties or needed scientific 

expertise to pertorm their responsibilities. 

In 23 of 28 cases no documentation was provided to show other 

non-Title 42 recruitment and retention efforts under available 

personnel systems and hiring authorities failed to yield the 

candidates with needed scientific expertise. 

HHS conversions met all of the requirements in two of six cases 

we reviewed of individuals converted to Title 42 209(f). In two 

other cases, conversions met some but not an of the criteria and 

in the remaining two cases, documentation was not available to 

support the basis for conversion 

HHS consistently prepared narrative statements describing the 

position's duties and responsibilities and the education and 

experience needed to perform those duties. 

Individuals hired under section 209(f) met or exceeded 

educational requirements and had professional experience related 

to the duties to be performed. 

Source GAO analysis 01 HHS doclJJl1Bnts 

aFor some Title 42 occupations, a doctoral degree or nursing degree may also be required. 

In accordance with HHS 2004 Title 42 policy, special consultants may 

only be appointed under section 209(1) to fill scientific positions; however, 

the policy included no formal criteria and did not define "scientific." We 

reviewed the statement of duties for 28 section 209(1) cases and found in 

5 cases that it was unclear the position was scientific. For example, 

special consultants hired under section 209(1) included an individual 

providing pastoral care services, quality assurance specialists, health 

scientist administrators, and data management and technology 

administration. In one case, a protocol manager's duties and 

Page 20 GAO·12-692 Human Capital 
93 


86287.068

responsibilities appeared to require scientific expertise in providing 

medical protocol services, It is possible that these and most other 

positions noted are scientific in nature or require knowledge of particular 

scientific disciplines, but it was not clear from the statement of duties and 

other supporting documentation provided by HHS on what basis these 

positions were considered scientific, 

Additionally, the section 209(f) policy states appointments can only be 

made after other available personnel systems, including Title 5 and PHS 

Commissioned Corps, have failed to yield candidates that possess critical 

scientific expertise, These recruitment and retention efforts, according to 

the policy, are to be documented prior to making an appointment under 

section 209(f), In only 5 of the 28 section 209(f) case files we reviewed 

was there documentation showing HHS considered other personnel 

systems before using Title 42, In one case, the memorandum requesting 

approval to hire a 209(f) candidate included a template with each of the 

section 209(f) policy requirements and how each requirement was met In 

explaining other recruitment efforts, the template showed (1) how the 

position was a top-level scientific position and therefore not appropriate 

for Title 5 or other authorities, (2) due consideration was given to the PHS 

Commissioned Corps, and (3) recruitment incentives would be insufficient 

in light of past efforts to recruit individuals with the requisite scientific 

experience, 

The section 209(f) policy also includes guidance for converting 

employees from other pay systems into special consultant positions under 

Title 42, The policy states conversions are only to be used in exceptional 

circumstances and employees may only be converted to the Title 42 

program if they meet all conversion criteria, such as providing leadership 

in a field equivalent to a full-tenured professor in academia and 

recognition as a national or international expert in the field, In our case 

reviews of six conversions to section 209(f), two cases met each of the 

requirements for converting employees. In one case where each of the 

requirements was documented, NIH officials developed a memorandum 

explaining the need to convert a radiologist because radiologists in the 

particular specialty are rare, several with similar skill sets recently left 

NIH, and the individual will be maintaining equipment critical for multiple 

clinical trial protocols, 

For other case files we reviewed, documentation provided by HHS did not 

support the basis for conversion, In two cases, the stated purpose of 

conversion to Title 42 was to retain a clinical research nurse and a 

medical technologist While the justifications showed how both cases 

Page 21 GAO~12~692 Human Capital 
94 


86287.069

Section 209(g): Appointing 

and Compensating Fellows 

provided special knowledge and skills of benefit to the agency, the 

documents did not provide evidence of recognized national or 

international expertise in their field, leadership equivalent to a full-tenured 

professor, or original scientific or scholarly contributions, as required, In 

the other two cases, we could not determine if conversion requirements 

were met because HHS could not provide documentation needed, 

In August 2010, HHS's Office of Human Resources reviewed the 

agency's use of section 209(1) authority and found two issues similar to 

those in our review, The review found that HHS section 209(1) policy did 

not define "scientific,' and in the absence of a definition, it appeared the 

operating divisions adopted an interpretation that was most 

accommodating to the appOintment. The review also found most 

appointment documentation lacked any information about prior 

recruitment and retention efforts, Recommendations from the audit report 

became the basis for a new 209(1) policy, which was issued in February 

2012,26 Significant changes to the 209(1) policy include: 

Defines 'scientific position' to include positions in which the 

incumbent is directly involved in or manages scientific research or 

activities, and administrative positions that require the incumbent to 

have scientific credentials, 

Requires that the same recruitment plan be used for both Title 5 and 

Title 42 to demonstrate that other available personnel systems failed 

to yield qualified candidates, Further, the policy also explains the 

process and documentation requirements necessary to demonstrate 

that other available personnel systems, including Title 5, the Senior 

Biomedical Research Service, and PHS Commissioned Corps, have 

failed to yield qualified candidates, 

Identifies speCific positions and/or categories of positions at NIH that 

may be filled through section 209(1) without "exhausting' other 

recruitment mechanisms or authorities, 

HHS has no agencywide implementing policy for appointing and 

compensating employees hired as fellows under section 209(g), including 

details about what documents are needed to support the basis for 

appointments and compensation, We have previously reported that 

Human Resources Manual, Instruction 42-1: Appointment 0142 U,S,C, § 209(1) 

Special Consultants (Feb, 15,2012). 

Page 22 GAO·12·692 Human Capital 
95 


86287.070

agencies should have clearly defined, well-documented, transparent, and 

consistently applied criteria for appointing and compensating personnel. 27 

In lieu of guidance from HHS, the individual operating divisions 

established their own policies and guidance for appointing and 

compensating fellows under 209(g), each with different levels of detail, 

compensation limits, and documentation requirements. NIH has 

instructions for appointing fellows as well as guidance for the use of 

recruitment and retention incentives. FDA's Service Fellowship Plan 

provides appointment and compensation setting procedures for section 

209(g) fellows and caps total compensation at Executive Level IV, with 

some exceptions above that cap available for consideration. CDC's policy 

for its 209(g) Fellowship Program provides provisions for all fellows and 

general compensation guidance. Top pay for a fellow is set at the 

equivalent of the Grade 15, Step 10 pay level. 

The lack of an HHS-wide policy poses the risk that compensation 

decisions for section 209(g) fellows at HHS may not be made consistently 

across operating divisions. Although some guidance exists at the 

operating division level for setting compensation targets, in 11 of the 20 

case studies we conducted of section 209(g) fellows, we found either no 

or insufficient documentation to support the basis for compensation. 

Without an agencywide policy, an agency cannot be assured that it is 

allocating its resources most appropriately. According to senior human 

resource officials at HHS, an agencywide policy is needed and the 

agency is developing a policy for appointment and compensating fellows 

under 209(g). However, it is not clear that the policy will address 

important issues such as documenting the basis for compensation. The 

section 209(g) policy was still in development as of May 2012. 

Page 23 

A Model of Strategic Human Capital Management, GAO-02-373SP (Washington, 

15,2002). 

GA~12~92 Human Capital 
96 


86287.071

EPA Employs a 

Limited Number of 

Title 42 Fellows, 

Primarily in 

Leadership Roles 

Congress provided EPA with the authority to use 42 U.S.C. § 209 to 

employ up to 30 persons at anyone time through fiscal year 2015. EPA 

has appointed 17 fellows in ORD from 2006 to 2011 under section 209(g). 

Of the 17 fellows appointed under Title 42, 12 were hired from outside 

EPA, while the remaining 5 converted from other positions within EPA. 28 

Of the 17 apPointments, 14 were selected through advertised 

competition. To date, all 17 fellows remain with EPA and appointments for 

the three fellows hired in 2006 have been renewed for another 5-year 

term.29 See figure 3 for the cumulative onboard Title 42 staff, by new hire 

or conversion. 

280f those hired from outside of EPA, 11 were from private industry or academia, and one 

from another federal agency. 

29EPA policy provides that at the conclusion of their term, fellows with Title 5 permanent 

competitive status based on prior employment retain reinstatement eligibility but have no 

guarantee of return to a Title 5 position. Fellows who do not have Title 5 competitive 

status based on prior employment obtain no reinstatement eligibility due to service in a 

Tit!e 42 position. In this case, if the employee is interested in a Title 5 position following 

the Title 42 appointment, they are subject to the normal application and competitive 

selection process. 

Page 24 GAO~12"692 Human Capital 
97 


86287.072

In 
98 


86287.073

One Title 42 fellow manages and provides oversight for research in an 

integrated systems toxicology research program, was previously an 

Associate Dean at a university where the individual led similar 

research efforts, and leads an ORD division with more than 80 staff. 

Another leads a research program by developing biological measures 

to assess the impact of environmental exposure on human health and 

serves as Director for the Environmental Public Health Division. 

The lead scientist for bioinformatics within the National Center for 

Computational Toxicology (NCCT) is a Title 42 fellow, responsible for 

conducting data analysis and developing solutions for data 

management, and serving as senior advisor to the center's director. 

According to EPA officials, Title 42 provides two important tools EPA 

needs to achieve its mission. First, EPA reported that Title 42 provides 

the flexibility to be competitive in recruiting top experts who are also 

sought after by other federal agencies, private industry, and academia. 

Prior to using Title 42, EPA had difficulty recruiting and retaining scientists 

in certain highly specialized disciplines under regular hiring authorities. 

We reported in 2001 that EPA faced significant challenges in recruiting 

and maintaining a workforce with mission-critical skills in key technical 

areas such as environmental protection, environmental engineering, 

toxicology, and ecology." EPA officials told us Title 42 has helped the 

agency recruit individuals in cases where, because of the specialization of 

expertise needed, authority to set pay over the limits of other hiring 

authorities was needed to be competitive in the labor market. As such, 

the minimum base salary for Title 42 employees at EPA is equal to the 

highest base pay level for employees paid under the General Schedule, 

and the maximum base salary is $250,000. 32 

EPA officials also stated Title 42 provides the appOintment flexibility 

needed to align experts with specific skills to changing sCientific priorities. 

One specific program where EPA cited the importance of using Title 42 in 

that way was in the development of the NCCT. There are four Title 42 

fellows at NCCT, including its director. The fellows assist in the 

development of NCCT initiatives, such as the Computational Toxicology 

Human Capital: Implementing an Effective Workforce Strategy Would Help EPA to 

Achieve its Strategic Goals, GAO-01-812 (Washington. D.C .. July 31, 2001). 

"Grade 15, Step 10 of the General Schedule at EPA's research facilities where Title 42 

employees work include $152,364 at Research Triangle Park in North Carolina and 

$153,542 in Cincinnati, Ohio. 

Page 26 GAO·12-692 Human Capital 
99 


86287.074

Research Program, a program that is developing alternatives to traditional 

animal testing. A 2010 review by the National Academy of Sciences 

National Research Council reported "the use of Title 42 appointments to 

develop NCCT is an excellent example of how such appointments can be 

used to build new capacity and advance the state of science."" EPA 

officials stated it is not the agency's intention to hire a fellow long-term 

under Title 42, but rather employ the individual as long as a priority 

remains high. For the three fellows hired in 2006, EPA renewed the terms 

for another 5-year appOintment. 

Annual salaries range from approximately $153,000 to $216,000, with an 

average salary of about $176,000 and a median salary of about 

$171,000. As shown in table 6,15 of the 17 EPA fellows had salaries 

exceeding Executive Level IV. 

Table 6: Number of EPA Title 42 Fellows with Salaries in Federal Executive Salary 

Levels, 2010 

Executive level Number of fellows 

At or above Executive Levell ($199.700) 

Within Executive Levels I and II ($179,700-199.699) 

Within Executive levels II and III ($165.300-179,699) 4 

Within Executive levels 111 and IV ($155,500-165,299) 

Below Executive Level IV ($155.500) 

SO\.!rce GAO analysIs of EPA data 

Of the 12 new hires from outside EPA, 8 earned more in annual pay than 

earned in the position previously held. 3 earned less than in their previous 

position, and 1 appointee's salary did not change. Salary changes from 

previous positions ranged from a decrease of $85,000 to an increase of 

$40,000, not including recruiting incentives. Eight of the 12 new hires 

received recruitment incentives ranging from $10,000 to $50,000. EPA 

documents indicate that the recruitment incentives were offered to 

compete with private industry and to aid in career transition. All five 

employees converted from other positions within EPA received a salary 

increase, ranging from $6,000 to $15,000. None of the converted 

employees received incentive payments. 

33Nationa! Research Council of the National Academy of Sciences, The Use of Title 42 

Authority at the U.S. Environmental Protecffon Agency: A Letter Report (April 2010). 

Page 27 GAO~12..s92 Human Capital 
100 


86287.075

EPA Appointment and 

Compensation 

Practices Were 

Generally Consistent 

with Its Guidance, but 

EPA Could Improve 

Resolution of 

Potential Conflicts of 

Interest 

Converted employees generally assumed additional responsibilities as a 

Title 42 employee. Our case studies included four of the five EPA 

employees who converted to Title 42. Of the four appointees who came 

from within EPA, one was promoted from the lead oil research program 

scientist to the director of the land remediation and pollution division, one 

moved from being an associate director to a division director within the 

same national center, one was promoted from a branch chief to a division 

director, and one remained a director. 

In December 2010, EPA began a pilot of using market salary data to 

estimate salaries of what Title 42 candidates could earn in positions 

outside of government given their education, experience, professional 

standing, and other factors. EPA used the market salary data to inform 

salary negotiations for the five fellows appOinted since the implementation 

of the pilot. According to EPA officials, the market salary pilot concludes 

in December 2012 and its effect will be analyzed at that time. 

In appointing Title 42 fellows, EPA generally followed appointment 

guidance described in its Title 42 Operations Manual. The manual 

provides guidance for managers, supervisors, and human resources 

specialists implementing Title 42. In all 10 case files we reviewed, 

documents provided by EPA show Title 42 practices were generally 

consistent with its guidance and requirements. Table 7 shows some 

selected Title 42 appointment requirements and observations from our 

case reviews. 

Page 28 GAO·12·692 Human Capital 
101 


86287.076

Table 7: EPA Appointment and Compensation Practices Were Generally Consistent with Guidance 

Appointment guidance 

Fellows appointed under Title 42 will be assigned duties in major or 

significant areas of scientific inquiry in support of environmental 

protection, 

For all Title 42 positions, a doctoral-level degree from an 

accredited institution of higher learning is required.s 

Each Title 42 appointee will have a written position description 

which describes principal duties. 

Title 42 positions may be recruited through advertised competition, 

direct-hire without advertised competition, or the conversion of a 

current EPA employee hired under a regular hiring authOrity with or 

without advertised competition. 

Title 42 appointees must have conducted outstanding research in a 

field of environmental science or engineering that is related to the 

mission of the ORD. 

Prior to entry on duty, apPointees must provide a job offer 

acceptance letter, completed background investigation form, 

completed public financial disclosure report (SF~278), written 

acknowledgement of ethics agreement, and proof of appropriate 

employment visa, if applicable. 

The Assistant Administrator of the Office of Research and 

Development (AA-ORD) or designee wi!! approve or disapprove 

recommendations for appointment. 

Title 42 appointments will be made inltlally for a period ranging 

from 1 year and 1 day to 5 years. Such an appointment may be 

extended for varying periods, not in excess of 5 years for each 

period, and requires approval by the M~ORD or designee upon a 

written request by the Title 42 appointee's immediate supervisor. 

Observations 

In aU 10 cases, EPA assigned the Title 42 employee to 

leadership positions within ORO's scientific research areas 

In all 10 cases, Title 42 employees had doctoral-level degrees 

from accredited institutions of higher learning. Appointees have 

doctorates in areas such as human genetics, soil microbiology, 

chemistry, environmental science, biophysical ecology, synthetic 

organic chemistry, biology, medicine, and anatomy. 

In all 10 cases, there was a written position description 

describing the background and need for the position, major 

duties and responsibilities, and supervisory controls. 

In 8 of the 10 cases we reviewed, Title 42 positions were 

advertised. In one case, an employee was hired without 

advertisement, but was identified through a previous 

announcement for a different position. One case was a converted 

employee hired without advertised competition. 

In all 10 cases, EPA provided documentation showing the Title 

42 employee was actively engaged in peer reviewed original 

research, 

All new Title 42 employees to the agency provided the required 

documentation. EPA did not conduct new background 

investigations for converted fellows who had a background 

investigation upon original employment with the agency 

The ORO Assistant Administrator's approval was documented in 

aU cases, 

EPA appointed aU Title 42 employees for a period of 5 years. 

Source GAO analysIs of EPA documents 

3tn response to the National Academy of Sciences National Research Council report, EPA has 

implemented a two-year pilot to waive the requirement that a!llltle 42 employees have a doctorallevel degree. The report noted U{t1hat requirement may exclude many highly qualified scientist and 

engineers who do not have such degrees:' The report continued, ~EPA should be flexible, taking such 

situations into account and making exceptions as appropriate." 

Page 29 GAO-12-692 Human Capital 
102 


86287.077

EPA Could Improve 

Procedures for Resolving 

Potential Conflicts of 

Interest 

We conducted 10 case file reviews of EPA Title 42 employees and in 2 

cases we discovered issues related to EPA's procedures for mitigating 

potential financial confticts of interest. 34 EPA's Title 42 employees are 

subject to the same laws and regulations that govern the ethical conduct 

of other federal employees. For example, covered Title 42 employees are 

required to submit a public financial disclosure report (SF-278) as part of 

the appointment process and annually thereafter. Title 42 employees are 

also covered under the criminal conflict of interest law, 18 U.S.C. § 208. 

Section 208 prohibits a federal employee from participating personally 

and substantially in a particular matter in which he or she has a personal 

financial interest. 35 The statute is intended to prevent an employee from 

allowing personal interests to affect his or her official actions and to 

protect governmental processes from actual or apparent conflicts of 

interest. The application of the statute can be waived so that an employee 

need not divest his or her financial interest or recuse themselves from the 

particular matter, where the nature and size of the financial interest and 

the nature of the matter in which the employee would participate are 

unlikely to affect an employee's official actions. 36 

EPA's Title 42 guidance includes pre-employment ethics clearance 

procedures for identifying and mitigating potential conflicts of interest prior 

to appointment. As part of the procedures, an ethics official in EPA's 

Office of General Counsel (OGe/Ethics) works with the candidate to 

ensure that all required information is reported on the disclosure form and 

to develop an ethics agreement, as necessary, to mitigate or resolve any 

identified potential conflicts. A job offer may only be extended after 

OGC/Ethics signs the public financial disclosure report.37 Although EPA 

has preappointment ethics clearance procedures as noted above, it does 

not have postappointment procedures in place to ensure Title 42 

employees meet ethics requirements to which they have previously 

not conduct a similar review of ethics compliance at HHS because, unlike EPA, 

HHS has not included ethics procedures in its guidance specific to appointing and 

compensating Title 42 employees. 

35Section 208 also prohibits an employee from participating in a particular matter in which 

certain persons or organizations, with which he or she is affiliated, have a financial 

interest. 

365 C.F.R. § 2640.101. 

37The signature of the agency ethics official indicates the filer is in compliance with 

applicable laws and regulations. 

Page 30 GAO~12·692 Human Capital 
103 


86287.078

agreed. In two cases we reviewed, employees had potential conflict of 

interest situations arise after appointment resulting, in part, from the 

agency's failure to ensure Title 42 employees followed agreed upon 

ethics requirements. 

In one case, EPA general counsel determined stock owned by the 

candidate could be a potential conflict of interest and directed the 

candidate to either recuse himself from certain duties or divest himself 

of the stock as a condition of employment. The candidate agreed to 

divest of the stock and was subsequently hired. A year later, during 

the routine review of the employee's annual financial disclosure form, 

EPA discovered that the employee still owned the stock. The 

employee was ordered to divest of the stock and this time immediately 

complied. EPA also reviewed the projects for which the employee was 

involved while still owning the stock and determined that the 

employee had not participated in any particular matter which would 

have constituted a conflict of interest. According to EPA, there was 

confusion concerning who, if anyone, was tasked to ensure the 

divestiture occurred. 

In another case, based on the review of the candidate's public 

financial disclosure form, EPA and the candidate entered into an 

ethics agreement, which documented ethical constraints that would 

apply to the candidate and to caution the candidate about certain 

assets held. The agreement listed entities in which the individual held 

stock and advised that, as required by 18 U.S.C. § 208, the individual 

should not participate in any particular malter that affected any of the 

listed entities unless the individual first obtained a written waiver from 

EPA/OGC or the value of the asset was low enough to qualify under a 

regulatory de minimis exemption. 38 Despite these efforts, a year later, 

while responding to the employee's request for additiOnal time to file 

the annual public financial disclosure form, EPA discovered that the 

employee was participating in a matter while holding stock in a 

company (a listed entity in the ethics agreement) that EPA/OGC 

initially believed could be affected by this matter. Concluding that the 

"Waivers of conflicts of interest are authorized under 18 USC § 208(b)(1) where an 

agency determines, in an individual case, that a disqualifying financial interest in a 

particular matter is not so substantial as to be deemed likely to affect the integrity of the 

employee's service to the government. 5 C.F.R. § 2640.301. Under the regulatory de 

minimis exemption provision of 18 U,$.C. 208(b)(2), if an individual owns less than the 

designated amounts, the individual may participate in the matter. Descriptions of the 

various exemption thresholds for interests in securities are found at 5 CFR. § 2640202. 

Page 31 GAO~12"692 Human Capital 
104 


86287.079

Conclusions 

employee's participation was a conflict of interest, EPA/OGC directed 

the employee, who had been working on the matter for approximately 

3 days, to immediately stop working on the matter. The employee 

immediately complied and sold the stock holding in question in order 

to resume working on the matter. OGC/Ethics made no inquiry into 

the specific activities the employee engaged in during those 3 days. 

Almost 2 years later, OGC/Ethics officials now conclude that this 

company was not sufficiently affected by the matter to present a 

violation of 18 U.S.C. § 208 in light of facts that subsequently 

emerged. 

EPA officials acknowledge that beyond these two cases, its efforts to 

identify and mitigate potential conflicts of interest after appointment can 

be improved and have taken steps to improve ethics oversight. For 

example, in order to increase overall awareness of ethics responsibilities, 

EPA reported it provided additional training to a senior ethics official and 

now copies Deputy Ethics Officials - officials responsible for assisting 

employees in being compliant with ethics requirements - when cautionary 

memoranda are issued. EPA also told us it has plans to develop 

mandatory training sessions for ethics officials in its field laboratories and 

centers and implement a process where employees hired under the Title 

42 and other authorities send EPA OGC confirmation of such actions as 

stock divestitures or signed recusals. As details and implementation 

timelines for these plans were not available at the time of our review, it is 

not clear that these plans fully consider and address ethics issues that 

arise after appointment and ensure previously agreed upon ethics 

requirements are followed, as was the issue in the two cases above. 

HHS and EPA have used Title 42 to recruit and retain highly skilled, indemand personnel to government service. Although HHS relies on Title 

42 to fill some of its most critical scientific and medical research positions, 

the lack of complete data and guidance may limit the agency's ability to 

strategically manage the use of the authority. HHS erroneously reported 

appOintments made under sections 209(1) and (g) that would have been 

prohibited by law, indicating the agency's data management practices 

may preclude effective oversight of the program and workforce planning. 

Effective oversight is particularly important in light of HHS's increasing 

use of Title 42 and the number of employees earning salaries higher than 

most federal employees. Inconsistencies between HHS's pOlicies and 

practices related to section 209(1) may result in that authority being used 

in ways for which it was not intended. Recent changes to 209(1) policy 

issued by HHS should help the agency more consistently follow 

Page 32 GAO-12-692 Human Capital 
105 


86287.080

Recommendations for 

Executive Action 

requirements. As appointments have been made under 209(g) without 

documentation showing the basis for compensation, relying on 209(g) 

guidance issued only at the operating division level may not be sufficient 

to ensure appointments and compensation under this authority are 

appropriate and consistent HHS has acknowledged the need for 

agencywide 209(g) guidance, but has not determined if it will include 

requiring documentation showing the basis for compensation. EPA 

generally followed its Title 42 policies and has incorporated some 

modifications to improve its apPointment and compensation practices; 

however, EPA's current ethics guidance does not sufficiently ensure Title 

42 employees meet ethics requirements after appointment EPA 

acknowledged it could improve its postappointment ethics oversight and 

reported it has plans to ensure that Title 42 employees send OGe 

confirmation of stock divestitures and other ethics requirements. 

However, at the time of our review, EPA had not provided us with 

implementation plans or timeframes. Although its plans appear to be 

prudent steps for addressing the speCific issues that arose in the cases 

we reported, it will be important for EPA to implement them as soon as 

possible to mitigate the risk of future potential conflict of interest issues. 

To help ensure HHS has the data and guidance necessary to effectively 

oversee and manage its Title 42 authority, we recommend that the 

Secretary of HHS take the following three actions: 

Ensure section authority-sections 209(1) or (g)-be consistently 

entered in appropriate automated personnel systems, such as making 

section authority a required, drop-down field in its personnel system 

where this information is initially entered. 

As part of its effort to implement new section 209(1) guidance, 

systematically document how policy requirements were fulfilled when 

hiring or converting 209(1) employees. This could include such items 

as: 

the basis for which the position is considered scientific, 

recruitment and retention efforts made under other hiring 

authorities before using Title 42, 

- a conversion's recognition as a national or international expert in 

the field, 

- a conversion's original scientific or scholarly contributions of major 

significance in the field, 

Page 33 

a conversion's leadership in the field equivalent to a full-tenured 

professor in academia, and 
106 


86287.081

Agency Comments 

and Our Evaluation 

- a conversion's special knowledge and skills of benefit to the 

agency. 

As part of its ongoing effort to develop agencywide policy for 

appointing and compensating employees hired under section 209(g), 

ensure the policy requires and provides guidance for documenting the 

basis for employee compensation. 

To help improve enforcement of ethics requirements, we recommend the 

Administrator of the EPA direct the Designated Agency Ethics Official: 

As part of its efforts to improve postappointment ethics oversight, 

develop and document a systematic approach for ensuring Title 42 

employees are compliant with ethics requirements after appointment 

Implement, as part of this approach, reported plans to require Title 42 

employees to provide proof of compliance with ethics agreements to a 

designated ethics official within a reasonable timeframe after 

appointment. 

We provided the Secretary of Health and Human Services and the 

Administrator of the EPA an opportunity to comment on a draft of this 

report. The HHS Assistant Secretary for Legislation and EPA's Acting 

Assistant Administrator for Research and Development provided written 

responses and technical comments, which we incorporated as 

appropriate. The agencies' comments appear in appendix II and III. 

In a June 7, 2012, letter responding to a draft of this report, HHS agreed 

with each of the three recommendations. HHS's ongoing and proposed 

actions noted in the response address our concerns and are likely to 

improve the agency's management and oversight of its Title 42 authority. 

HHS agreed with Our first recommendation to ensure section authority is 

consistently entered in appropriate automated personnel systems. 

Specifically, HHS stated that as it moves forward with the implementation 

of a new enterprise human resources system, it will explore the possibility 

of using a drop-down field to enter Title 42 section authority. HHS stated 

that its Office of Human Resources will continue to work with the 

Operating Divisions and Staff Divisions to ensure that Title 42 personnel 

actions are processed in a consistent and accurate manner. 

HHS also agreed with our two recommendations addressing Title 42 

policies. HHS stated that, in part due to our findings, it updated its section 

209(1) policy to address our concern that HHS document how policy 

requirements were fulfilled when hiring or converting section 209(1) 

Page 34 GAO·12~692 Human Capital 
107 


86287.082

employees. In addition, HHS agreed with our recommendation to develop 

agencywide policy for appointing and compensating employees hired 

under section 209(g) authority. HHS stated that the section 209(g) policy 

will be implemented in the near future. 

In a June 6, 2012, letter responding to our draft, EPA disagreed with the 

recommendation directed to EPA and our discussion of the second ethics 

case. Specifically, EPA requested that we update our discussion to note 

that the individual had not yet visited a site related to work on the matter. 

EPA stated that since the individual had not yet visited the site, EPA is 

not aware of any evidence that the employee personally and substantially 

participated in the matter. 

We do not believe a change in the discussion of this ethics matter is 

warranted. GAO made no independent conclusions as to whether the 

individual's participation during the brief period of time we note 

constituted personal and substantial participation in the matter and 

whether this was a conftict of interest in violation of 18 U.S.C. § 208. 

Rather, our discussion of this case, including whether the individual's 

participation was a conftict of interest, was based exclusively on and 

attributed to conclusions made by EPA/OGe, both at the time of the event 

and in subsequent interviews conducted for this engagement. 

Specifically, documentary evidence at the time of our review supports the 

fact that EPA's concern was the individual's participation in the matter in 

general, and that EPA's concern was not influenced by the fact that the 

individual was not yet on site. As we reported, EPA/OGC directed the 

individual to stop working on the matter when it found he owned stock in a 

company that could be affected by the matter he was working on (the 

individual immediately stopped working on the matter and sold the stock 

in order to resume working on this matter.) 

EPA disagreed with our statement that it is not clear that EPA plans to 

develop an approach to address ethics issues that arise after 

appointment and ensure previously agreed upon ethics requirements are 

followed. In its comments, EPA noted that on February 17, 2012, it sent 

us a letter documenting the steps it has taken and plans to take to 

address postappointment ethics issues and ensure previously agreed 

upon ethics requirements are followed. Specifically in its February letter, 

EPA reported it recently implemented a process in which they now copy 

Deputy Ethics Officials when cautionary memoranda are issued to OGE 

278 filers. EPA also reports it has plans to implement a process for public 

filers, including employees hired under the Title 42 special hiring 

Page 35 GAO~12..o92 Human Capital 
108 


86287.083

authority, to ensure that they send OGC confirmation of stock 

divestitures, for example, or signed recusals. 

We agree that providing cautionary memoranda to the officials 

responsible for assisting the employee in remaining compliant with ethics 

requirements is a step that could improve EPA's postappointment ethics 

oversight and added this example to the report accordingly. However, 

because EPA did not provide a firm date or timelines for implementing its 

reported plan to ensure employees send OGC confirmation of stock 

divestitures or signed recusals, we did not revise the finding. 

EPA disagreed with the recommendation that it develop and document a 

systematic approach for ensuring Title 42 employees are compliant with 

ethics requirements after appointment and consider adding steps to the 

ethics clearance process that require Title 42 employees to provide proof 

of compliance with ethics agreements. EPA asked that we remove the 

recommendation or revise it to acknowledge the plans mentioned above 

and that EPA continues working towards implementation. 

We acknowledge EPA is considering a plan to require proof of 

compliance with ethics agreements and, because we believe this is a 

prudent and needed step for improved ethics oversight, have revised the 

recommendation to reflect EPA's plans. As the two ethics issues we 

reported occurred over two years ago and EPA has acknowledged 

improvements in its postappointment ethics oversight are needed, such 

plans should be implemented as soon as possible. We maintain that the 

recommendation is still necessary to ensure EPA develops detailed plans 

and begins moving toward implementation as soon as possible to mitigate 

the risk of additional potential conflict of interest issues. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to the 

appropriate congressional committees. We are also sending copies to the 

Secretary of Health and Human Services and the Administrator of the 

Environmental Protection Agency. In addition, the report is available at no 

charge on the GAO website at http://www.gao.gov. 

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

me at (202) 512-2757 or goldenoffr@gao.gov. Contact pOints for our 

Offices of Congressional Relations and Public Affairs may be found on 

Page 36 GAO~12..e92 Human Capital 
109 


86287.084

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix IV. 

Robert N. Goldenkoff 

Director, Strategic Issues 

Page 31 GAO~12w692 Human Capital 
110 


86287.085

Appendix I: Objectives, Scope, and 

Methodology 

This report examines the extent to which the Department of Health and 

Human Services (HHS) and the Environmental Protection Agency (EPA) 

have (1) used authority under 42 U.S.C. §§ 209(1) and (g) to appoint and 

set pay for employees since January 2006, and (2) followed applicable 

agency policy, guidance, and internal controls for Title 42 appointments 

and compensation. 

To address the first objective, we obtained and analyzed personnel data 

from HHS and EPA to describe Title 42 appointment and compensation 

trends at HHS and EPA since 2006, including the number of Title 42 

employees; the types of occupations and positions held by Title 42 

employees; compensation rates, including the number of Title 42 

employees earning more than certain federal salary levels; the number of 

nonsalary payments (e.g., performance bonuses and retention incentives) 

provided to Title 42 employees and their purpose; and the number of civil 

servants that have been converted to Title 42 appointments and 

compensation changes associated with those conversions. We 

determined 2006 was the most appropriate beginning year for our 

analysis because, according to HHS human resource officials, personnel 

data prior to 2006 was likely not Sufficiently reliable for our analysis. Also, 

EPA began using Title 42 in 2006. HHS data presented in this report is 

2006 through the end of 201 0, the last year of complete data available; 

and at EPA, 2006 through the end of 2011. 

We conducted a variety of data tests and interviews with agency officials 

to correct and refine HHS Title 42 data and were able to develop a data 

set that was sufficiently reliable for our purposes. We could not, however, 

report on the number of HHS Title 42 employees hired under a particular 

section authority-sections 209(1) or (g)-because section authority is not 

consistently recorded by HHS. For EPA, we performed data testing and 

interviewed agency officials to identify any data gaps or inconsistencies 

with compensation data provided and compared EPA data to information 

found in official agency documents. We determined that EPA's data were 

sufficiently reliable for the purposes of our report. 

To assess the extent to which HHS and EPA have followed applicable 

policy, guidance, and internal controls, we reviewed the policies and 

guidance at HHS and EPA in order to understand the conditions under 

which Title 42 appointees are to be recruited, appointed, compensated, 

and managed. We determined case file reviews would be the most 

appropriate approach to obtain the information needed to (1) compare 

practices with policy and guidance, and (2) provide illustrations and 

context for data analysis results. We conducted a total of 63 case file 

Page 38 GAO·12-692 Human Capital 
111 


86287.086

Appendix I: Objectives, Scope, and 

Methodology 

reviews out of 1,502 HHS cases within selected strata in two phases. In 

the first phase, we conducted 23 case file reviews to address data 

reliability concerns. The number of case file reviews in this phase was 

proportional to the frequency with which we identified and observed cases 

with data characteristics that deviated from our understanding of the 

purpose and use of sections 209(1) and (g). In the second phase, we 

conducted 40 case file reviews based on a random selection of cases that 

had characteristics related to various areas of HHS Title 42 policy and 

guidance. 

For the HHS case file selection, cases were grouped into strata based on 

certain characteristics-such as hired under section 209(1), hired under 

section 209(g), newly hired in 2010, converted in 2010, or with aspects of 

data inconsistent with our understanding of Title 42's purpose-and 

randomly selected from within those strata. For EPA, we selected 10 of 

the 17 Title 42 employees for case file reviews based on a cross section 

of (1) labs and centers within EPA to understand if Title 42 was 

implemented uniformly across the agency; (2) Title 42 candidate sources 

such as the private sector, academia, and conversions to determine if 

differences existed in recruitment and pay setting; (3) length of service as 

a Title 42 employee to understand the effect of recent appointment and 

compensation guidance; and (4) compensation characteristics. We 

developed a data collection instrument for both HHS and EPA file reviews 

to capture information that was uniform and comparable. 

At the conclusion of each phase of our case file reviews, we analyzed the 

results and recorded our observations and listed the next steps-such as 

interviews with agency officials and further data analysis-needed to 

obtain further context for our observations. The results from the case file 

reviews and subsequent activities enabled us to understand the results of 

our data analyses and provided the basis for findings. We determined the 

number of case file reviews was sufficient to identify incidences where 

practices were or were not consistent with pOlicies and guidance, but our 

findings are not generalizable to the entire population of sections 209(1) 

and (g) employees at HHS or EPA. 

We conducted this performance audit from May 2011 through July 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

Page 39 GAO·12·692 Human Capital 
112 


86287.087

Appendix II: Comments from the Department 

of Health and Human Services 

(~ 

Robert Gol.dcnkoff 

Director, Strategic Issues 

u.s. GovemmentAcoountabilityOffice 

441GStreetNW 

Washington, DC 20548 

Dear Mr. Goldenkoff: 

OFFICE OF THE SECRetARY 

Attached are comments on the U.S. Government AcCQuntability Office's (GAO) report entitled: 

"Human Capital: HHS and EPA Can Improve Practices under Special Hiring Authorities" 

(GAO·12·692). 

The Department appreciates the opportunity to review this draft section of the report prior to 

publication. 

Attachment 

Page 40 

Sincen::ly. 

QC?.f'L1'> 

«~~Esq~L5~~' 

Assistant Se<:retary for Legislation 

GAO·12·692 Human Capital 
113 


86287.088

Appendix II: Comments from the Department 

of Health and Human Services 

The Department appreciates the opportunity to respond to GAO's report on the use of Title 42 

appointment and compensation authorities at MRS Wlder 42 U,S,C. § 209 (I) and (g) (together, 

Title 42), HHS has no major di~ement with the facts as represented in the draft report. As 

noted. HHS uses these sections to appoint and compensate key scientific personnel. including 

some of our most senior leadership positions. As these sections are the key mechanisms 

available to recruit and retain vital scientific stafffor HHS. we agree that the GAO 

recommendations will serve to strengthen the use of the authority. 

The Department"s responses to GAOfs recommendations are below. 

GAO Recommendation: 

Ensure section authority - 209(1) or (g) - be consistently entered in appropriate automated 

personnel systems. such as making section authority a required, drop-down field in its personnel 

system where this infonnation is initially entered. 

fiRS Response: 

HHS agrees with this recommendation and recogniu:s the need to improve the accuracy of 

personnel data for appointments under both 42 U.s.C, § 209 (f) (42 209(1)) and 42 U,S,C. § 209 

(g) (42 209(g}) and is committed to doing so. In response to our internal review and the 

subsequent GAO engagement, HHS has undertaken and will continue to undertake definitive 

steps to effectively oversee and manage the HHS Title 42 authority and ensure consistency in 

entering section authority - 209(0 or (g) - in appropriate automated personnel syst¢mS. 

Specifii:&ly, we have: 

I) l..aunched a data validation effort to review and correct in.wruracies in the CUl'l'tnt 

HHSHRd,tsl>a>o; 2) Devt'loped. published. find mandated use nfthe New HR Data Processing Guide for 

HR Specialists and those with HR Data entry responsibilities; and 

3) To ensure greater consistency and oversight at the corporate level, moved forward 

with the implementation of an Enterprise HR IT end·to-end system scheduled to 

launch next. fall. 

As HHS moves forward with the implementation of this new enterprise~wide automated human 

resources system, we will also explore the possibility afming a drop dQwn field to enter the TItle 

42 209(f) and (g) appointment information. As the method for documenting the appointments is 

finalized in this new system, the HHS Office of Human Resources will continue to 'NOrk with the 

Operating and Staff Divisions to ensure that Title 42 personnel actions are processed in a 

consistent and accurate manner. 

Page 41 GAO~12·692 Human Capital 
114 


86287.089

Appendix II: Comments from the Department 

of Health and Human Services 

GAO Recommendation: 

As part of its effort to implement new section 209(f) guidance, systematically document how 

policy requirements were fulfilled when hiring or converting 209(t) e.mp!o~. 

MRS Response: 

HHS agrees with this recommendation. In response to our internal review and GAO's findings 

during this engagement, liltS updated its policy regarding the use of 42 U.S.C. § 209(f), The 

policy. issued February 15.2012. addresses GAO's recommendations. Specifically. it includes: 

A definition of scientific position; 

• A detailed explanation of the process and documentation requirements necessary to 

demonstrate that other available persormel systems. including Title 5, failed to yield 

candidates that possess critical scientific expertise; and 

• States that a scientist may only be converted 10 a42 U.S.C. § 209(0 appointment from 

another pay system ifhelshe is appropriately peer-reviewed accoroing to the 

requirements outlined in the instruction and OPDIV procedures and is determined to 

meet all the following criteria: 

Page 42 

I. Evidence of recognition as a national or in~mational expert in the field. such as: 

specific experience. invited manuscripts. presentations. and consultations;: receipt of honors and/or awards; or other recognition for noteworthy performance or 

contributions to the fIeld; 

2. Evidence of original scientific or scholarly contributions of major significance in 

the field; 

3. Evidence of leadership in the field; and 

4. Special knowledge and skills of benefit to the agency. 

GAO-12-692 Human Capital 
115 


86287.090

Appendix II: Comments from the Department 

of Health and Human Services 

GAO Re(:olllroendaClon: 

As part of its ongoing effort to develop agency~wide policy for appointing and compensating 

employees hired under 209(g). ensure the policy requires and provides guidance for documenting 

the basis for employee compensation. 

HHS Response: 

HHS agrees with this recommendation and will soon implement the recommendation. HHS's 

Title 42 209(g) policy, which will be issued in thenw future, will require Operating Divisions 

to establish service fellowship planslprograms that pteseri~ in writing, the conditions under 

which service. fellows are appointed and hold their fellowships. This includes, but is not limited 

to,compensation. 

Specifically, it wi!1 state that Operating Divisions are responsible for the establishment of service 

fellowships, or a series of service fellowships and shalt prescribe, in writing, the conditions 

under which service fellows will be appointed and hold their fellowships. In addition, there is a 

compensation seclion that requires the following: 

• &uaries for individuals appointed on a full-time schedule will be!et on a per annum 

basis commensurate with the: applicant's qualifications. experience, and other factors as 

described below. Appointments that art on other than a full~time basis wiU be paid on a 

pr&-ntta basis of an annualized salary; 

• Base salary will be set at the lowest rate necessary to recruit the candidate. In 

detennining the base salary, management must consider sucb factors as: 

o Qualifications and stature of the individual in hlslher professional field; 

o Salary the Fellow may be expected to receive outside the federal government for work !>imilar- to their fellowship assignment; 

o Specialized skills/training, and experience that the applicant may possess that will benefit the agency/program; and 

o Consistency of pay with others in the organization; and 

Base salary may not exceed the rate set in accordance with Section 2(}2 of Pub. L. No. 

102·394. 

Page 43 
116 


86287.091

Appendix III: Comments from the 

Environmental Protection Agency 

UNITEO STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHtNGTON, D.C, 20460 

JON 06 2012 

Mr. Robert N. Gotdenkoff 

Director 

Strategic Issues 

U.S. Government Accountability Offiee 

Washington. DC 20548 

Dear Mr. Ooldenkoff: 

Thank you for the opportunity to review and comment on GAO's draft report "HUMAN 

CAPITAL: HHS and EPA Can Improve Praclices Under SplclaJ Hiring Authorities," Although 

we received a copy of the entire draft report. we want to clarify that the Environmental 

Protection Agency~s (EPA) response letter only speaks to the portions pertaining: to our Agency, 

EPA appreciates GAO's recognition of our efforts to improve our l1t1e: 42 appointment and 

cQfIlpensation practices. However. the Agency has significant concerns with regard to some of 

the ethics information that has been stated in your draft report. The purpoae of this letter is to 

provide BP A's response to both the remaining areas of concern while also addressing the 

recommendation you have provided to EPA in your draft report. 

In your draft report, you state (page 35): 

"1n two C()$tS we reYlewed. empJo~f!S had potential conflict oflntet'esl situations arise 

after appointment resulting, ilt part, from the employu '$ ftdlun: Ie follow agreed upon 

requirements." 

EPA respectfully disagrees with this statement; specifically the second example ineluded in your 

draft report (pages 35 - 36). As your draft.report mentioned, EPA and the candidate entered into 

an ethics agreement which documented ethical constraints that WQuld apply to the caOOidate and 

cautioned the candidate about certain assets held. We would like to clarify that, while 

responding to the employee's request for additional time to file the annual public financial 

disclosure form. EPA discovered that the employee was making arrangements to travel to a 

particular site to WQrk on a new matter. The Ethics Staff in EPA's Office of General Counsel 

(OGClEthics) reviewed his last OGE 273 filing to determine whether any of his assets posed a 

Inlat'Mlhldl ... iURLJ. htt!>:fhoww.~.!P>' 

~bW.PJj"'"wiII1V,-OiIB1Md~IHt,0I)0Ir,~mtf,Pro¢K&CI'IIIlI'IuF_RlICyCliI61'."..-

Page 44 GAO~12-692 Human Capital 
117 


86287.092

Appendix III: Comments from the 

Environmental Protection Agency 

potential conflict of interest for the new matter. He held stock in a company (a listed entity in 

the ethics agreement) that OOC/Etbics initially believed could be affected by this matter. 

Out of an abundance of caution. OGCIEthlcs concluded that the employee's stoclt presented a 

potential cont1ict of interest, and OOClEthics directed the employee to not work on the matter or 

to immediately divest; the latter of which the employee chose to do. It is important to note that 

the inQividual had not yet visited the site~ so we are not aware of any evidence that would 

suggest the employee personally and substantially participated in the matter, which under 18 

U.S.C. § 208 would be required to qualify as a conflict of interest. We ask that your final report 

be updated accordingly. 

fn your draft report, you state (page 36): 

"EPA officials acknowledge Ihat ... ils effom to identify and mitigate potenJial conflicts of 

interest can be Improved and have taken sleps to Improve ethics oversight." 

EPA respectfully disagrees with this statement.. We believe this statement may have resulted 

from confusion with regard to a statement EPA previously provided GAO. Therefore. we would 

like to clarify that. during the pre~intment process, OGClEthics. working through the 

respective Deputy Ethics Official, identifies and conducts a thorough review of all possible 

ethics issues. EPA does agree that during the post~appointment process; EPA could provide 

better oversight to ensure that employees follow through in undet'Standing what they need to do 

to be in compliance with the ethics rules. We ask that you update your final report to reflect this 

clarification. 

In yourdraftreport. you state (page 36): 

''It is not clear. hctwever. that EPA plans to develop an approach tl) address ethics issues 

(hal (ll'ise after appointment and ensure previously agreed upon ethics requirements are 

followed, as was the issue in the two cases above." 

EPA respe<:tfully disagrees with this statement. On February 11,2012, we sent a Jetter to your 

staffoutlining plans EPA bas recently implemented or will SOOn implement that will address 

ethics issues that arise after appointment and ensure previously agreed upon ethics requirements 

are followed. As outlined in this Jetter, OGClEthics recently implemented a new process. in 

which they nowwpy Deputy Ethics Officials when cautionary memoranda are issued to OGE 

278 filers. EPA believes that this is a significant step in addressing ethics issues that may arise 

after appointment. Previously, the filer was simply infonned ofltis or her ethical considerations. 

Other examples were also mentioned in this letter as it pertains to EPA's plans to implement 

processes that wiU ensure previously agreed upon ethics requirements are followed. Therefore, 

we ask that you update or remove tbislanguage as appropriate, including the similar starement 

you have included-on the bottom of page 37 of your draft report. 

Page 45 GAO·12·692 Human Capital 
118 


86287.093

Appendix III: Comments from the 

Environmental Protection Agency 

GAO Recommenlbtio-n #14 (only one addreued to EPA): "'As part ofilS eJ}Qrt$IO improve 

ethics oversight, develop and document Q systematic approachjvr ensurmg ntle 42 employees 

are compliant with ethics requirements after appointment. Consider, as parI of this approach. 

adding $Ieps to the Title 42 ethics dear(1JfCe process thaJ require Tille 42 emplo)ffl/!$ to provide 

proof of compliance Wilh ethics agreements to a designated ethics official wilhln a rMScna/)le 

time frame after appointment» 

EPA Response: As previously mentioned in this letter. we sent a letter to your staff on February 

17. 2012 that outlined plans EPA bas recently implemented or will soon implement that win addre$s. ethics issues that arise after appointment and ensure previously agreed upon ethics 

requirements are followed. One step that EPA outlined in the tCUer was a plan to implement a 

process for public filers. including employees hired underihe Title 42 special hiring authority, to 

ensure that they send OGC confmnation of stock divestitures, fO'r example, or signed recusals. 

We believe that this pian already addresses the recommendation that you provided to EPA in 

your draft report. We ask that you remove this f¢CQmmendation or. at the very least, update tM 

re<XInlmendation's language to acknowledge the plans mentioned above and that we continue 

working towards implementation. If you choose to include a revised recommendation. we ask 

that you address it to the Designated Agency Ethics Official who has the statutory requirement 

for overseeing ethics within the Agency. 

In closing, we want to' thank you again for the opportunity to review and respond to the draft 

GAO report. If you have uny questions,. please do not hesitate to contact me. 

Research and Development 

Enclosure 

Scott Fulton, General Counsel, oae Barbara J. Bennett. Chief Financial Officer~ OCFO 

Craig Hooks. Assistant AdminiS1rator. OARM 

Page 46 GAO·12~692 Human Capital 
119 


86287.094

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(450920) 

Robert N. Goldenkoff, (202) 512-2757 or goldenkoffr@gao.gov 

In addition to the individual named above, Trina Lewis, Assistant Director; 

Shea Bader; Carl Barden; Laurel Beedon; Andrew Ching; Sara Daleski; 

Jeffrey DeMarco; Karin Fangman; Ellen Grady; James Lager; Cynthia 

Saunders; Jeff Schmerling; and Gregory Wilmoth made major 

contributions to this report. 

Page 47 GAO·12·692 Human Capital 
120 


86287.095

GAO.s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

Connect with GAO 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO's commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO's website (www.gao.gov). Each weekday afternoon, 

GAO posts on its website newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, 

go to www.gao.gov and select .. E-mail Updates." 

The price of each GAO publication reflects GAO's actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO's website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TOO (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Pod casts. 

Visil GAO on the web at www.gao.gov. 

Contact: 

Website: www.gao.gov/fraudnetlfraudnet.htm 

E-mail: fraudnet@gao.gov 

Automated answering system: (800) 424-5454 or (202) 512-7470 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

.... 

"'1 Please Print on Recycled Paper. 
121 


86287.096

United States Government Accountability Office 

Washington, DC 20548 

B-323357 

July 11, 2012 

The Honorable Denny Rehberg 

Chairman 

Subcommittee on Labor, Health and Human Services, 

Education, and Related Agencies 

Committee on Appropriations 

House of Representatives 

The Honorable Cliff Stearns 

Chairman 

Subcommittee on Oversight and Investigations 

Committee on Energy and Commerce 

House of Representatives 

The Honorable Joe Barton 

House of Representatives 

The Honorable Michael Burgess 

House of Representatives 

Subject: Pay for Consultants and Scientists Appointed under Title 42 

This responds to your request for our views on whether there are statutory caps on 

pay for consultants and scientists appointed pursuant to 42 U.S.C. §p 209(f) or (g), 

and specifically whether the pay cap under 5 U.S.C. § 5373 applies. To answer this 

question, we address several issues. First, we consider the effect of an 

appropriation provision that restricts pay for individuals appointed on a limited-time 

basis pursuant to 42 U.S.C. §§ 209(f) and (g). Then, we examine two provisions in 

title 5 of the United States Code that also limit pay. The first is 5 U.S.C. § 3109, 

1 You also asked GAO to perform audit work on the extent to which the Department 

of Health and Human Services (HHS) and the Environmental Protection Agency 

(EPA) have used this authority and followed applicable guidance. See, GAO, 

Human Capital: HHS and EPA Can Improve Practices under Special Hiring 

Authorities, GAO-12-692 (Washington, D.C.: July 9,2012). 
122 


86287.097

which limits pay for consultants "procure[d]" on a temporary or intermittent basis. 

The second is 5 U.S.C. § 5373, which limits pay fixed by administrative action. 

In brief, we find that the appropriations law provision enacted in 1993 established a 

permanent appropriation cap on the pay of individuals appointed on a limited-time 

basis under 42 U.S.C. §§ 209(f) and (g) at agencies funded through the Labor-HHSEducation Appropriations Act. With regard to the two title 5 limitations, we think 

these pay limitations do not apply to appointments made pursuant to 42 U.S.C. 

§§ 209(f) or (g). 

At the outset, we note the extraordinary complexity of the federal pay systems and 

the difficulties we have encountered in attempting to resolve ambiguities arising from 

pay laws enacted at different times over nearly 70 years. Sections 209(f) and (g) of 

title 42 were enacted in 1944 and have not been amended since that time. There 

have, however, been many significant changes in related laws and regulations since 

1944 that may be relevant to the interpretation of 42 U.S.C. §§ 209(f) and (g). One 

court, in deciding similar issues, has noted the inherent complexity of resolving 

ambiguities in this area of the law. In 1983, in International Organization of Masters, 

Mates & Pilots v. Brown, 698 F.2d 536, 539 (CAD.C. 1983), the court noted that 

there were six separate federal pay systems, plus "depending on the degree of 

disaggregation, over forty other, separate pay systems: The statutory scheme has 

only become more complex since 1983. In formulating our views, we conducted 

extensive research of legislative history to aid in our understanding of congressional 

actions and the interplay of the laws addressed below, and examined regulations 

issued pursuant to these provisions over the last 65 years. We also solicited the 

views of the Department of Health and Human Services (HHS) and the Office of 

Personnel Management (OPM).2 

BACKGROUND 

The authority for special consultants and scientists appointed to fellowships within 

the Public Health Service contained in 42 U.S.C. §~ 209(f) and (g) was enacted as 

part of the Public Health Service Act, as amended, which reads as follows: 

2 Our practice when issuing decisions and opinions is to develop a factual record on 

the subject matter of the request. GAO, Procedures and Practices for Legal 

Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006), 

available at www.gao.govllegal/resources.html. The record in this case consists of 

the request letter and the views of the Department of Health and Human Services 

and the Office of Personnel Management. 

3 Pub. L. No. 410, sec. 208(c) and (d), 58 Stat. 682, 686 (July 1,1944); amended by 

Pub. L. No. 425, sec. 5, 62 Stat. 38, 40 (Feb. 28, 1948), redesignated section 208 as 

section 207 and redesignated subsections (c) and (d) as subsections (e) and (f); 

(continued ... ) 

Page 2 B-323357 
123 


86287.098

"(f) In accordance with regulations, special consultants may be 

employed to assist and advise in the operations of the Service. Such 

consultants may be appointed without regard to the civil-service laws 

and their compensation may be fixed without regard to the 

Classification Act of 1923, as amended." 

"(g) In accordance with regulations, individual scientists, other than 

commissioned officers of the Service, may be designated by the 

Surgeon General to receive fellowships, appointed for duty with the 

Service without regard to the civil-service laws and compensated 

without regard to the Classification Act of 1923, as amended, may hold 

their fellowships under conditions prescribed therein, and may be 

assigned for studies or investigations either in this country or abroad 

during the terms of their fellowships.,,4 

(Emphasis added). Subsection (f) applies to special consultants ("consultants"), 

while subsection (g) applies to scientists designated to receive fellowships 

("scientists" or "fellows"). This authority was an expansion of authorities that had 

been given to the National Cancer Institute. 5 These provisions ofthe Public Health 

( ... continued) 

Pub. L. No. 84-492, §3(b), 70 Stat. 116 (Apr. 27,1956), redesignated subsections 

(e) and (f) as subsections (f) and (g). 

4 Additionally, 42 U.S.C. § 210(f) provides that fellows appointed "shall have 

included in their fellowships such stipends or allowances ... as the Surgeon 

General may deem necessary to procure qualified fellows." 

5 According to the accompanying report, the authority to hire special consultants was 

intended to broaden to all branches of the Public Health Service an authority that 

had been previously conferred to the National Cancer Institute. H.R. Rep. No. 78-

1364, at 8 (1944). The National Cancer Institute Act, Pub. L. No. 244, §5(d), 50 Stat. 

559,561 (Aug. 5, 1937) authorizes the Surgeon General to secure "from time to time 

and for such periods as may be advisable, the assistance and advice of experts, 

scholars, and consultants from the United States or abroad who are learned and 

experienced in the problems" related to the research and treatment of cancer. The 

authority in the National Cancer Institute Act contains no mention of the application 

of civil service or classification laws. The accompanying report to the Public Health 

Service Act provides that the exemptions from the civil service and compensation 

laws were a confirmation of the existing situation. The report accompanying the Act 

states that the authority to appoint fellows to the Public Health Service was a similar 

expansion of an authority originally conferred on the National Institutes of Health and 

the National Cancer Institute. H.R. Rep. No. 78-1364, at 8 (1944). 

Page 3 B-323357 
124 


86287.099

Service Act, as included in the United States Code, omit as obsolete the references 

to "compensation ... without regard to the Classification Act of 1923, as amended." 

The United States Code serves as an editorial compilation of federal statutes and as 

prima facie evidence of the law for titles that have not been enacted as positive law. 6 

1 U.S.C. § 204(a); United States National Bank of Oregon v. Indep. Ins. Agents of 

Am., Inc., 508 U.S. 439, 448 (1993). Since Title 42 has not been enacted into 

positive law, the language of the Public Health Service Act as included in the 

Statutes at Large, rather than the United States Code, is controlling. Therefore, the 

language regarding compensation "without regard to the Classification Act of 1923" 

remains effective, and we include that language in our analysis. 

The Public Health Service first issued regulations implementing section 209(f) for 

consultants on October 24, 1947, and regulations for section 209(g) for scientists on 

September 16,1947.7 The regulations for consultants specified that "[nJo such 

consultant shall be employed for an aggregate of more than one-half of the number 

of working days of any fiscal year unless the Administrator, because of special 

circumstances, shall approve an extension thereof." The regulations also placed 

limits on the duration of fellowships of periods not to exceed 16 months, which could 

be extended or renewed.8 

In 1956, in its appropriations for the Public Health Service for fiscal year ending 

June 30, 1957, Congress included a pay cap, providing that "compensation to 

consultants or individual scientists apPOinted for limited periods of time pursuant to 

[42 U.S.C. §§ 209(f) and (g)] at rates established by the Surgeon General [shall] not 

... exceed $15,000 per annum.,,9 As discussed below, this "cap" authorized the 

Public Health Service to pay special consultants and fellows at a higher rate of pay 

than otherwise allowed at that time. 

6 Positive law codification is the process of preparing and Congress enacting, one 

title at a time, a revision and restatement of the general laws of the United States. A 

title of the United States Code that has been enacted into positive law is itself legal 

evidence of the law. 1 U.S.C. § 204(a). 

7 Regulations for special consultants were published at 12 Fed. Reg. 6,924 (Oct. 24, 

1947). Regulations for fellows were published at 12 Fed. Reg. 6,199 (Sep. 16, 

1947). 

842 C.F.R. § 61.12 (1949). 

9 Pub. L. No. 84-635, 70 Stat. 423, 430 (June 29, 1956). The language of the 

provision refers to sections 207(f) and (g) of the Public Health Service Act, which are 

codified at 42 U.S.C. §§ 209(f) and (g). For ease of discussion, the references to the 

United States Code sections will be used throughout this opinion. 

Page 4 B-323357 
125 


86287.100

The appropriations for each fiscal year from 1957 through 1993 included a cap on 

pay for "consultants or individual scientists appointed for limited periods of time" 

pursuant to 42 U.S.C. §§ 209(f) or (g). The appropriations for fiscal year 1993 

established a permanent cap on such compensation, providing that pay may be set 

at rates not to exceed "the per diem rate equivalent to the maximum rate payable for 

senior-level positions under 5 U.S.C. § 5376.,,10 

In 1966, all functions of the Public Health Service were transferred to the Secretary 

of Health, Education, and Welfare {HEW).11 After the reorganization, HEW revised 

its regulations "to reflect current requirements" and removed the language limiting 

the number of days in a fiscal year that special consultants could be employed. 12 

Current regulations do not contain such limits.13 HHS also issued regulations 

governing the appOintment, duration, and compensation of fellows which include 

time limits on the appointment of fellows. 14 

Finally, in 2005, Congress extended to the Environmental Protection Agency (EPA) 

authority to hire a limited number of scientists pursuant to 42 U.S.C. § 209. 

10 Pub. L. No. 102-394, §202, 106 Stat. 1792, 1810-1811 (Oct. 6,1992). 

11 Reorg. Plan NO.3 of 1966, eft. June 25,1966,31 Fed. Reg. 8855 (June 25, 

1966), 80 Stat. 1610. The Secretary of the Department of Health, Education and 

Welfare has since been redesignated as the Secretary of Health and Human 

Services. 

12 31 Fed. Reg. 12,939 (Oct. 5, 1966). 

13 These regulations, found at 42 C.F.R. § 22.3, read as follows: 

(a) When the Public Health Service requires the services of consultants who cannot 

be obtained when needed through regular Civil Service appointment or under the 

compensation provisions of the Classification Act of 1949, special consultants to 

assist and advise in the operations of the Service may be appointed, subject to the 

provisions of the following paragraphs and in accordance with such instructions as 

may be issued from time to time by the Secretary of Health and Human Services. 

(b) ApPOintments, pursuant to the provisions of this section, may be made by those 

officials of the Service to whom authority has been delegated by the Secretary or his 

designee. 

(c) The per diem or other rates of compensation shall be fixed by the appointing 

officer in accordance with criteria established by the Surgeon General. 

14 The regulations authorize a fellow to receive "such stipend as is authorized by the 

Secretary for each service fellowship or series of service fellowships," and for each 

service fellowship to have an initial appointment of varying periods, not to exceed 5 

years, and to be extended for varying periods not to exceed 5 years. 42 C.F.R. 

pt. 61, subpt. B. 

PageS 8-323357 
126 


86287.101

DISCUSSION 

The Appropriation Pay Cap 

Under the U.S. Constitution, "No Money shall be drawn from the Treasury, but in 

Consequence of Appropriations made by Law .... " Art. 1, § 9, cl. 7. This power of 

the purse means that Congress, through its authority to appropriate funds, can 

determine the terms under which an appropriation may be used. See, e.g., New 

York v. United States, 505 U.S. 144, 167 (1992); Cincinnati Soap Co. v. United 

States, 301 U.S. 308, 321 (1937). 

As discussed previously, since fiscal year 1957, pay for consultants and scientists 

appointed for a limited period of time pursuant to sections 209(f) and (g) has been 

capped by appropriations acts for most components of the Public Health Service. 

The first cap, in the appropriations bill for the fiscal year ending June 30, 1957, 

authorized pay "not to exceed $15,000 per annum.,,15 In response to our inquiry, 

HHS stated that the existence of a restriction in an appropriations act supports the 

analysis that the compensation authority is otherwise unrestricted. 16 Our review of 

the legislative history of the first appropriation to contain the limit indicates that it was 

enacted due to other restrictions in law on compensation authority, and that the 

authorization for pay not to exceed $15,000 per annum was an increase over then 

existing pay authority. 

The provision appeared in the appropriation bill (H.R. 9720) originally passed by the 

House, but it was limited to appointments made to the National Institutes of Health 

(NIH). The report from the House Committee does not explain why this provision 

was added. H. Rep. No. 84-1845 (1956). However, in testimony before the House 

Subcommittee on the Departments of Labor, and Health, Welfare, and Education, 

and Related Agencies of the Committee of Appropriations, Dr. James A. Shannon, 

the Director of the National Institutes of Health, noted that NIH had "the ability to 

bring in non-Government scientists from laboratories and clinics for indefinite periods 

of time," but a "practical problem exists in that we have to stay within salary levels of 

the civil service of a grade 15 job as far as compensation is concerned.,,17 

15 Pub. L. No. 84-635, 70 Stat. 423, 430 (June 29, 1956). 

16 Letter from Acting General Counsel, Department of Health and Human Services, 

to Assistant General Counsel for Strategic Issues, GAO (Dec. 30, 2011) (HHS 

Letter), at 1. 

17 Labor-Health, Education, and Welfare Appropriations for 1957, Hearings before 

the Subcommittee of the Committee on Appropriations, United States House of 

(continued ... ) 

Page 6 8·323357 
127 


86287.102

According to Dr. Shannon's testimony, at that time the limitation was equal to 

$12,600. 

In hearings before the Senate, the following comment from the Public Health Service 

on the provision was placed on the record: 

"The compensation of such scientists and consultants is limited by 

existing authority to the highest salary in grade 15 of the Classification 

Act. It is anticipated that the increase authorized by the House will 

make it easier for the National Institutes of Health to bring in nonGovernment scientists from laboratories and clinics for indefinite 

periods of time. 

The language as written in the House bill is inequitable in that it does 

not apply to scientists and consultants who may be utilized in other 

parts of the Public Health Service .... Uniform authority could be 

provided to all parts of the Public Health Service if the language ... 

were modified by deleting the words "by the National Institutes of 

Health."18 

The Senate Committee recommended removing the limitation of the authority to 

personnel at the National Institutes of Health and extending it to the entirety of the 

Public Health Service. S. Rep. No. 84-2093, at 12 (1956). From the statements 

made in hearings referenced above, it is clear that this "cap" authorized the Public 

Health Service to pay consultants and scientists at a higher rate of pay than what the 

Public Health Service believed it could pay. The record does not indicate the 

specific basis on which HHS determined in 1956 that the compensation authorities 

under sections 209(f) and (g) were limited to the highest salary in grade 15. 

Each appropriation for the Public Health Service from FY 1957 through FY 1993 

contained a limitation on pay for consultants and scientists appointed for limited 

( ... continued) 

Representatives, 84th Congo 530 (1956) (Statement of Dr. James A. Shannon, 

Director, National Institutes of Health). 

18 Labor-Health, Education, and Welfare Appropriations for 1957- Hearings on H.R. 

9720 Before the Subcommittee of the Committee on Appropriations, United States 

Senate, 84th Congo 327-329 (1956) (Statement of Dr. Jack C. Haldeman, Chief, 

Division of General Health Services). Both Dr. Shannon and Dr. Haldeman use the 

phrase "indefinite periods of time" to describe the length of appointments pursuant to 

sections 209(f) and (g). As discussed above, the regulations at that time indicate 

that all such appointments were of limited duration. We do not know what the actual 

practice of Public Health Service was in 1956. 

Page 7 8-323357 
128 


86287.103

periods of time under sections 209(f) and (g) with identical language each year 

(except for amount).19 The limit became permanent in the FY 1993 

Labor/HHS/Education Appropriation, which stated: 

"Appropriations in this or any other Act or subsequent Departments of 

Labor, Health and Human Services, and Education, and Related 

Agencies Appropriations Acts shall be available for ... the payment of 

compensation to consultants or individual scientists appOinted for 

limited periods of time pursuant to section 207(f) or section 207(g) of 

the Public Health Service Act, at rates established by the Assistant 

Secretary for Health, or the Secretary where such action is required by 

statute, not to exceed the per diem rate equivalent to the maximum 

rate payable for senior-level positions under 5 U.S.C. § 5376."20 

(Emphasis added). Generally, a provision in an annual appropriation act is effective 

only for that fiscal year, as appropriations acts are, by their nature, non-permanent 

legislation. 8-319414, June 9,2010. The presumption of non-permanence can be 

overcome, however, if the provision of law contains language indicating futurity. The 

provision in the 1993 Appropriations Act contains the phrase "in this or any other Act 

or subsequent Departments of Labor, Health and Human Services, and Education, 

and Related Agencies Appropriations Acts." The words "this or any other Act," 

standing alone, are not words of futurity. Williams v. United States, 240 F.3d 1019, 

1063 (Fed. Cir. 2001); 65 Compo Gen. 588 (1986); 8-230110, April 11, 1988. 

19 The first such provision limited pay to rates not to exceed $15,000 annually. Pub. 

l. No. 85-67, 71 Stat. 210, 217 (June 29,1957). The appropriation for the fiscal 

year ending June 30,1960, increased the limit to rates not to exceed $19,000 

annually. Pub. l. No. 86-158, 73 Stat. 339, 347 (Aug. 14, 1959). The appropriation 

for the fiscal year ending June 30,1965, increased the limit to rates not to exceed 

$24,500. Pub. l. No. 88-605, 78 Stat. 959, 967 (Sep. 19. 1964). In 1970, the limit 

was changed again, this time to "not to exceed the per diem rate equivalent to the 

rate for GS-18." Pub. l. No. 91-204, 84 Stat. 23, 44 (March 5, 1970). Each annual 

appropriation contained the provision limiting pay at that rate until 1991. On 

November 5, 1990, Congress passed the Federal Employees Pay Comparability Act 

of 1990 which, among other things, replaced references to GS-18 with references to 

5 U.S.C. § 5376. PUb. l. No. 101-509, § 529,104 Stat. 1389, 1433 (Nov. 5,1990). 

The appropriation for fiscal year 1992, described the limit as "not to exceed the per 

diem rate equivalent to the maximum rate payable for senior-level positions under 5 

U.S.C. § 5376." Pub.l. No. 102-170, 105 Stat. 1107, 1140 (Nov. 26,1991). 

2°Departments of Labor, Health and Human Services, and Education, and Related 

Agencies Appropriations Act, 1993, Pub. l. No. 102-394, § 202, 106 Stat. 1792, 

1810-1811 (Oct. 6,1992). 

PageS 8-323357 
129 


86287.104

However, when used in conjunction with other language, the result is different. 21 In 

this case, the addition of the phrase "or subsequent Labor, Health and Human 

Services, Education Appropriations Acts" clearly indicates Congressional intent that 

the pay limitation become permanent law. These are words of futurity. HHS agrees 

that this language constitutes words of futurity and as such the pay limitation 

continues to be in effect. 

The appropriation provision limits the rate of pay to no more than "the per diem rate 

equivalent to the maximum rate payable for senior-level positions under 5 U.S.C. 

§ 5376." The maximum rate of basic bay for senior level positions under 

section 5376 when the permanent appropriation cap was enacted was set at level IV 

of the Executive Schedule. Subsequently, in 2008, 5 U.S.C. § 5376 was amended 

to allow for a higher maximum compensation of up to Executive Level II for Senior 

Level and Scientific and Professional employees covered by a performance 

appraisal system certified by the Office of Personnel Management.22 However, 

since the appropriation cap was enacted prior to the 2008 amendment of 

section 5376, its reference to section 5376 is to be interpreted as referring to the 

lower pre-amendment level. 23 As such, the maximum rate payable under this 

provision is the rate of basic pay (excluding locali~ pay) payable for level IV of the 

Executive Schedule, which currently is $155,500. 4 

HHS asserts that the appropriation provision pay cap applies only to appOintments 

made on a limited-time basis because of the language limiting its application to 

consultants and scientists employed "for limited periods of time pursuant to 

21 See, 8-230110, April 11, 1998, finding the addition of the phrase "with respect to 

any fiscal year" to constitute words of futurity; 8-309704, Aug. 28, 2007, "with 

respect to any fiscal year"; 8-316510, July 15,2008, "beginning in fiscal year 2008 

and thereafter." 

22 Senior Professional Performance Act of 2008, Pub. L. No. 110-372, 122 Stat. 

4043 (Oct. 8, 2008). 

23 In its guidance to agencies, OPM directed that existing references to pay at the 

maximum rate payable under 5 U.S.C. § 5376 in statutes enacted prior to April 2, 

2009, are to be interpreted as references to the previously authorized pay rates. See 

OPM guidance under Compensation Policy Memorandum 2009-06. 

24 The locality adjusted rate is capped at level III of the Executive Schedule, which is 

currently, $165,300. The President's pay agent is delegated the authority to provide 

locality pay for employees not otherwise eligible. 5 U.S.C. § 5304(h). The 

President's pay agent has not authorized locality pay for employees appointed under 

42 U.S.C. §§ 209(f) or (g). 

Page 9 8-323357 
130 


86287.105

[42 U.S.C. §§ 209(f) or (g)]" (emphasis added).25 We considered the meaning of the 

phrase "for limited periods of time," which has appeared in all of the relevant 

appropriations provisions from 1956 to 1993. In 1956, when this language was first 

included in the appropriations law, the Public Health Service's regulations included 

time limitations on employment. It stated: 

No such consultant shall be employed for an aggregate of more than 

one-half of the number of working days of any fiscal year unless the 

Administrator, because of special circumstances, shall approve an 

extension thereof. 

42 C.F.R. § 22.3 (1949). Thus the time limit generally applied to all consultant 

appointments made under section 209(f) beginning in 1947, when the regulation 

containing the limit was first promulgated, unless "special circumstances" led the 

administrator to approve an extension. Further, the limit was in effect in 1956, when 

the first appropriations law provision referring to consultants appointed for "limited 

periods of time" was enacted. 

However, as noted in the Background section, this time limitation was removed from 

the regulations in 1966. 31 Fed. Reg. 12,939 (Oct. 5,1966). Thus under the 

regulations at that time, the appropriations pay cap applied to all section 209(f) 

consultants from 1956 until HHS changed the regulations in 1966 allowing for the 

hiring of consultants for indefinite periods. But, although the regulations 

implementing section 209(f) no longer included a time limitation on the employment 

of special consultants after 1966, the appropriations provisions for 1967 and 

subsequent years, using virtually identical language each year, imposed a cap only 

on pay of "consultants or individual scientists appointed for limited periods of time 

pursuant to [42 U.S.C. §§ 209(f) or (g)]." The appropriations restriction did not 

impose any cap on pay for those consultants whose appointments were not limited 

in time. The result is that, after the 1966 regulations were promulgated and 

continuing to the present, HHS has employed two categories of consultants: those 

appointed for limited periods of time, to whom the pay cap applies, and consultants 

appointed for indefinite periods, to whom the pay cap does not apply. At present, 

according to HHS, the conSUltants employed for term appointments under section 

209(f) and all scientists employed pursuant to section 209(g) are considered by HHS 

to be employed for limited periods of time. 

Importantly, the appropriations pay restriction is applicable only to payments made 

from Labor-HHS-Education Appropriations Acts. Three components of the Public 

Health Service (the Agency for Toxic Substances and Disease Registrations, the 

25 HHS Letter dated Dec. 30, 2011, at 1. Appointments of fellows pursuant to 

section 209(g) are all made on a limited-time basis and are therefore covered by the 

appropriation cap. 

Page 10 8-323357 
131 


86287.106

Food and Drug Administration, and the Indian Health Services)26 are funded by 

appropriations acts other than the Labor-HHS-Education Appropriations Act, and are 

not covered by a restriction on funds appropriated under that Act. Therefore, this 

limitation on pay does not apply to the pay of consultants and scientists employed by 

these agencies. 27 

In sum, we conclude that there is a cap of Executive Level IV on the pay of 

consultants and scientists employed for limited periods of time pursuant to 

42 U.S.C. §§ 209(f) or (g) in all but three of the Public Health Service Agencies. 

Statutorv Pay Caps 

The permanent appropriation restriction applies by its terms only to limited time 

appointments funded by Labor-HHS-Education Appropriations Acts. The specific 

language of sections 209(f) and (g) as enacted contains no cap on compensation for 

consultants or scientists, nor any limit on the length of consultants' employment. 28 

Thus, we still need to examine the applicability of two pay caps found in title 5: 

section 3109, which limits pay for consultants "procure[d]" on a temporary or 

intermittent basis, and section 5373, which limits pay fixed by administrative action. 

Pay Cap under 5 U.S.C. § 3109 

We consider whether individuals appointed pursuant to sections 209(f) and (g) are 

covered by the provision governing length of service and amount of pay for "experts 

26 Funding for the National Institute of Environmental Health Sciences is shared 

between Interior-Environment and Labor-HHS-Education appropriations. Library of 

Congress, Congressional Research Service, Locate an Agency or Program Within 

Appropriation Bills, No. R40858 (Oct 20,2009). 

27 According to HHS, the Public Health Service consists of the following 

components: the Office of the Assistant Secretary for Health, the Office of Global 

Affairs, the Office of the Assistant Secretary for Preparedness and Response, the 

Federal Occupational Health Service, the Agency for Healthcare Quality and 

Research, the Agency for Toxic Substances and Disease Registrations, the Centers 

for Disease Control and Prevention, the Food and Drug Administration, the Health 

Resources and Services Administration, the Indian Health Service, the National 

Institutes of Health, and the Substance Abuse and Mental Health Services 

Administration. HHS Letter dated Dec. 30, 2011, at 3-4. 

28 Section 209(g) refers to a "term" of employment for scientists who receive a 

fellowship. HHS agrees that all appointments of fellows under section 209(g) are 

limited-time appointments. 

Page 11 8-323357 
132 


86287.107

and consultants" currently codified at 5 U.S.C. § 3109. Originally enacted in 1946,29 

section 3109 has been amended several times and today provides in relevant part: 

"When authorized by an appropriation or other statute, the head of an 

agency may procure by contract the temporary (not in excess of 1 

year) or intermittent services of experts or consultants .... Services 

procured under this section are without regard to-

(1) the provisions of this title governing appointment in the 

competitive service; [and] 

(2) chapter 51 and subchapter III of chapter 53 of this title;30 

However, an agency subject to chapter 51 and subchapter III of 

chapter 53 of this title may pay a rate for services under this section in 

excess of the daily equivalent of the highest rate payable under section 

5332 of this title (GS-15) only when specifically authorized by the 

appropriation or other statute authorizing the procurement of the 

services." 

5 U.S.C. § 3109(b). 

Whereas 42 U.S.C. §§ 209(f) and (g) are independent authorities authorizing the 

apPOintment of consultants and fellows, 5 U.S.C. § 3109 is not. Instead, it 

establishes specific legal parameters, including a pay cap and a limit on appointment 

duration, governing the employment of experts or consultants whose apPOintment 

must be authorized by an "appropriation or other statute." That pay cap applies 

unless a different cap is authorized by the appropriation or another statute. 

In 1992, Congress added subsection (d) to section 3109. It directs OPM to 

prescribe regulations necessary to administer section 3109. OPM subsequently 

issued regulations, which provide that they do not apply to the appointment of 

experts or consultants under other authorities. 5 C.F.R. § 304.101. OPM stated in 

its reply to our question that it "does not consider the cap under 5 U.S.C. § 3109 to 

apply to consultants under 42 U.S.C. § 209(f)." Letter from General Counsel, Office 

of Personnel Management, to Assistant General Counsel, GAO (Nov. 22, 2011) at 1. 

29 PUb. L. No. 600, § 15, 60 Stat. 806, 810 (Aug. 2, 1946). Sections 209(f) and (g) 

were enacted in 1944. See footnote 3. 

30 As discussed below, chapter 51 and subchapter III of chapter 53 of this title are 

references to the Classification Act of 1949. 

Page 12 8-323357 
133 


86287.108

GAO has only addressed the interaction of section 3109 and section 209(f) once. In 

1947, shortly after the passage of section 3109, but well before Congress gave OPM 

authority to issue regulations under section 3109, GAO was asked by a certifying 

officer for the Public Health Service whether the pay of a consultant who had been 

appointed pursuant to section 209(f) was limited by the then recently enacted 

section 3109. 31 

Since section 3109 refers only to consultants whose services are procured "by 

contract," the certifying officer inquired whether it applied to a consultant who had 

been "appointed" under section 209(f). GAO found nothing in the legislative history 

to indicate that section 3109 was intended to "distinguish between an employment 

agreement in the form of an appointment and an employment agreement in the form 

of a formal contract." GAO then determined that section 3109 was intended to apply 

to all temporary or intermittent employment of experts or consultants, regardless of 

the type of employment agreement. At the time of the 1947 decision, all 

appointments made pursuant to section 209(f) were time-limited appointments, and 

section 3109 places a pay cap on temporary appointments, applying generally 

where there is no other specific cap. Since no other pay rate was specifically 

provided by 42 U.S.C. § 209(f) or in the appropriations act at that time, a special 

consultant hired pursuant to section 209(f) was not entitled to be compensated at a 

rate in excess of that authorized by section 3109. 

However, subsequent to the 1947 decision, Congress, by its actions, signaled that 

section 3109 did not apply to section 209(f) appointments. Beginning in 1956 and 

continuing until 1993, Congress enacted provisions yearly in appropriations acts that 

set a cap (which mayor may not have been higher than that found in section 3109 in 

any given year) for all those appointed pursuant to sections 209(f) and (g) for a 

limited period of time and funded out of the Labor-HHS-Education Appropriations 

Act. From fiscal year 1970 until the provisions became permanent in fiscal year 

1993, the appropriations acts for HHS contained separate provisions placing 

identical compensation limits for experts and consultants subject to 5 U.S.C. § 3109, 

and for consultants and scientists appointed for limited periods of time pursuant to 

42 U.S.C. §§ 209(f) or (g). One could argue that identical provisions would have 

been unnecessary if Congress believed that the limitations in 5 U.S.C. § 3109 would 

apply to 42 U.S.C. §§ 209(f) and (g) consultants or scientists. 

31 The certifying officer also asked about a provision that was part of the Federal 

Employees Pay Act of 1945. This provision prohibited payment at a rate in excess 

of $10,000, and applied only to pay provided pursuant to the Classification Act of 

1923. Since section 209(f) authorized compensation "without regard to the 

Classification Act of 1923," GAO concluded that the provision of the Federal 

Employees Pay Act of 1945 did not limit the consultant's pay. 27 Compo Gen. 46 

(1947). 

Page 13 B-323357 
134 


86287.109

We must also consider that in 1992, Congress assigned OPM the responsibility for 

enforcing 5 U.S.C. § 3109 and issuing regulations necessary for administration of its 

provisions. 32 OPM, in its regulations, explicitly states that the limitations under 5 

U.S.C. § 3109 do not apply to consultants hired pursuant to other hiring authorities. 33 

OPM's interpretation is entitled to considerable weight as the agency charged with 

administering it. In determining how much "deference" or weight should be accorded 

an agency interpretation, the Supreme Court in Chevron, Inc. v. Natural Resources 

Defense Council, 467 U.S. 837 (1984), formulated its approach to deference in 

terms of two questions. The first question is "whether Congress has directly spoken 

to the precise question at issue." Id. at 42. In this case, we think it clear that 

Congress did not expressly address the interaction of the title 5 and title 42 hiring 

authorities. Then, under Chevron, we must determine whether OPM's determination 

is reasonable, or whether it is arbitrary and capricious. Generally, when the 

agency's interpretation is in the form of a regulation, the deference is at its highest. 34 

As mentioned earlier, OPM has determined that section 3109 does not apply to 

consultants hired pursuant to other hiring authorities. In light of the discussion 

above, we find OPM's interpretation reasonable. 

Therefore, we follow OPM and conclude that the provisions of section 3109 do not 

apply to consultants employed pursuant to 42 U.S.C. § 209(f). 35 

Pay Cap under 5 U.S.C. § 5373 

The other pay cap that we consider is found in section 5373 of title 5 of the United 

States Code, which places limits on pay fixed by administrative action. Pay fixed by 

administrative action refers to the various pay-setting authorities in which pay is 

determined by the agency instead of pursuant to pay rates under otherwise 

applicable statutory pay systems, such as the General Schedule. 36 Congress first 

32 Technical and Miscellaneous Civil Service Amendments Act of 1992, Pub. L. No. 

102-378, §2(8), 106 Stat. 1346, 1347(Oct. 2, 1992). 

335 C.F.R. § 304.101. 

34 For an extensive list of Supreme Court cases giving Chevron deference to agency 

statutory interpretations found in rulemaking or formal adjudication, see United 

States v. Mead Corp., 533 U.S. 218, 231 at n. 12 (2001). The Supreme Court has 

stated that when Congress leaves ambiguity in a statute, "it is for agencies, not 

courts, to fill statutory gaps." National Cable & Telecommunications Ass'n v. Brand 

X Internet Services, 545 U.S. 967 (2005). 

35 We also find that to the extent that the 1947 GAO decision conflicts with this 

conclusion, it is overruled. 

36 Examples of statutory pay systems include those pay rates established for the 

General Schedule (subchapter III of chapter 53 of title 5 of the United States Code), 

(continued ... ) 

Page 14 B-323357 
135 


86287.110

enacted section 5373 as part of the Government Employees Salary Reform Act of 

1964,20 years after it passed sections 209(f) and (g). Section 5373 reads as 

follows: 

a) Except as provided ... by the Government Employees Salary 

Reform Act of 196437 and notwithstanding the provisions of other 

statutes, the head of an Executive agency ... who is authorized to fix 

by administrative action the annual rate of basic pay for a position or 

employee may not fix the rate at more than the rate for level IV of the 

Executive Schedule. This section does not impair the authorities 

provided by-

( ... continued) 

(1) sections 248, 482,1766, and 1819 of title 12, section 

206 of the Bank Conservation Act, sections 2B(b) and 

21A(e)(4) of the Federal Home Loan Bank Act, section 

2A(i) of the Home Owners' Loan Act, and sections 5.11 

and 5.58 of the Farm Credit Act of 1971 ;38 

(2) section 831b of title 16;39 

the Foreign Service (section 403 of the Foreign Service Act of 1980), the Executive 

Schedule (subchapter II of chapter 53 of title 5), and the Veterans Health 

Administration (chapter 74 of title 38 of the United States Code). 

37 The Government Employees Salary Reform Act of 1964 created both the 

administrative pay cap under section 5373 and the Executive Schedule. Pub. L. 

No. 88-426, 78 Stat. 400 (Aug. 14, 1964). "The Executive Schedule is a five-tier 

annual salary schedule for most of the federal government's highest officials, and the 

rates are adjusted on an annual basis." B-309301, June 8,2007. Among the 

purposes of the 1964 Act were "to establish a new, consistent, and rational salary 

structure for positions of the highest level in the Federal Government in the 

legislative, executive, and judicial branches," which it did by creating the Executive 

Schedule, and "to provide a logical and appropriate relationship between career 

salaries paid under the four civilian statutory pay systems and compensation for top 

positions in the three branches." S. Rep. No. 88-1121 at 1(1964). The 1964 Act 

removed authorities of agency heads to set rates of compensation for certain 

employees above GS-18. H.R. Rep. No. 88-1388 at 32 (1964). 

38 Relating to the pay for employees of the National Bank, the Federal Reserve, 

Office of the Comptroller of the Currency, National Credit Union Administration, 

Federal Deposit Insurance Corporation; Federal Housing Finance Agency; Farm 

Credit Administration; Farm Credit System Insurance Corporation. 

39 Relating to the Tennessee Valley Authority. 

Page 15 8-323357 
136 


86287.111

(3) sections 403a-403c, 403e-403h, and 403j of title 50;40 

(4) section 480241 

(5) section 2(a)(7) of the Commodity Exchange Act (7 

U.S.C. 2(a)(7»Y 

The rate for level IV of the Executive Schedule is currently $155,500 per year. When 

first enacted, section 5373 included provisions exempting employees found in 

subsections (1), (2), and (3) above. Provisions in subsections (4) and (5) exempting 

employees of the Securities and Exchange Commission and the Commodity Futures 

Trading Commission were added in 2002. 43 

In addition to the authorities listed as excepted within the text of 5 U.S.C. § 5373, 

other statutory pay authorities contain explicit exemptions from section 5373.44 

However, sections 209(f) and (g) are not among the sections explicitly excluded from 

coverage under the section 5373 pay cap. 

When previously faced with the question of the application of section 5373 to 

prevailing rate employees under a title 5 pay system, we determined that the pay of 

the crew of vessels required by statute to be fixed in accordance with prevailing 

industry rates was subject to the limitation in section 5373. The Court of Appeals, 

D.C. Circuit, concluded similarly, finding that the phrase "notwithstanding the 

provisions of other statutes" in section 5373 was evidence that "Congress wanted 

the pay cap to cut a wide swath." InternationalOrg. of Masters, Mates & Pilots v. 

Brown, 698 F.2d 536, 542 (D.C. Cir. 1983). As we examine the title 42 authorities 

35 years after we addressed section 5373 in the context of prevailing rate 

40 Relating to the Central Intelligence Agency. 

41 Relating to the Securities and Exchange Commission. 

42 Relating to the Commodity Futures Trading Commission. 

43 Investor and Capital Markets Fee Relief Act, Pub. L. No. 107-123, § 8(d)(1)(C), 

115 Stat. 2390, 2399 (Jan. 16, 2002) and Farm Security and Rural Investment Act of 

2002, PUb. L. No. 107-171, § 10702(c)(3), 116 Stat. 134,517 (May 13, 2002). 

44 See, for example, 5 U.S.C. § 5376 (pay rates for senior-level (SL) and scientific or 

professional (ST) positions); 5 U.S.C. § 5382 (pay rates for SES pOSitions); 10 

U.S.C. § 1587 (DOD's authority to pay senior executives of non appropriated fund 

instrumentalities at levels equivalent to SES); 10 U.S.C. § 2113 (pay for faculty at 

the Uniformed Services University of Health Sciences); 42 U.S.C. § 2391-1 (pay for 

faculty at the U.S. Public Health Sciences Track) and 38 U.S.C. § 7281 (pay rates 

for Court of Veterans Appeals clerks and employees). 

Page 16 8-323357 
137 


86287.112

employees, we are struck by some of the differences between the two cases. The 

provisions governing the pay of prevailing rate employees are found in title 5, as is 

section 5373. Certainly there is a closer relationship with pay authorities that are 

both found in the same title. It is also more likely that Congress was aware of the 

prevailing rate statute when it included "notwithstanding the provisions of other 

statutes" in the language of section 5373. 

HHS has determined that "the salary levels paid to individuals appointed under 

sections 209(f) and (g) are not subject to 5 U.S.C. § 5373 because ... the plain 

language of [sections 209(f) and (g)] states that the civil service laws do not apply to 

these appointments." 45 It has interpreted this language in sections 209(f) and (g) as 

giving the agency authority to set levels of pay under sections 209(f) and (g) above 

the section 5373 limit. 

HHS's interpretation of the language providing for an exemption from the civil 

service laws appears to be overly broad. Sections 209(f) and (g) contain two 

independent clauses addressing exemptions. The exemption from the civil service 

laws applies to the appointment of special consultants and fellows, whereas the 

exemption from the Classification Act of 1923, applies to compensation for these 

positions. HHS conflates the two clauses. The courts have not had much occasion 

to address the meaning of sections 209(f) and (g). 

In an unreported district court decision, two scientists who had been appointed to 

fellowships pursuant to section 209(g) were terminated, and the district court 

confronted the question whether their positions were exempted from all provisions of 

the Civil Service Reform Act. The court noted that no other federal court appeared 

to have examined the language "appointed without regard to the civil-service laws" in 

section 209(g).46 It concluded that the language meant that Congress intended to 

"provide federal agencies with the flexibility to hire Service Fellows without regard to 

the normal hiring formalities of the Civil Service," but that Congress did not intend to 

disregard the civil service laws in their entirety with respect to section 209(g) 

fellows. 47 The district court decided that such fellows were in the excepted service 

under the Civil Service Reform Act, as the excepted service "consists of those civil 

service positions which are not in the competitive or Senior Executive Service," and 

the Civil Service consists of "all appointive positions in the ... Government of the 

United States, except positions in the uniformed services.,,48 

45 Letter from Acting General Counsel, Department of Health and Human Services, 

to Assistant General Counsel for Strategic Issues, GAO (Oct. 25, 2011), at 4. 

46 Afshari v. Leavitt, 2006 U.S. Dist. LEXIS 77107 (N.D. W. Va. Oct. 23, 2006). 

47 Id. at 77110. 

48 The court relied on a Merit Systems Protection Board decision, which concluded 

that positions under section 209(f) were in the excepted service and that authority for 

(continued ... ) 

Page 17 8-323357 
138 


86287.113

Of more direct applicability than the exemption from the civil service laws is the 

provision that appointees under sections 209(f) and (g) may be "compensated 

without regard to the Classification Act of 1923." We therefore consider whether that 

language gives HHS the authority to compensate appointees in excess of the 

section 5373 limit. Case law is not helpful in determining the limit of the phrase 

"compensated without regard to the Classification Act of 1923.,,49 Certainly, in 1944, 

when sections 209(f) and (g) were enacted into law, the words "without regard to the 

Classification Act" eliminated any of the pay caps found in that Act. The more 

pertinent issue is whether, 20 years later, Congress intended to supersede the pay 

provisions of sections 209(f) and (g) with the enactment of section 5373 of title 5. A 

review of the evolution of law may prove helpful here. 

In 1949, five years after sections 209(f) and (g) were enacted, Congress passed the 

Classification Act of 1949, which replaced the Classification Act of 1923 and 

provided that references in other laws to the 1923 Act should be held and 

considered to mean the 1949 Act. 50 As mentioned above, in 1964, Congress 

passed section 5373 as part of the Government Employees Salary Reform Act. 

When section 5373 was enacted, there is no indication in the legislative history or in 

the subsequent actions of the Public Health Service, OPM, or Congress that they 

believed it superseded the authority granted to the Public Health Service in sections 

209(f) and (g). In 1966, the Classification Act of 1949 was enacted into positive law 

and codified in title 5 of the United States Code. 51 

Neither the Classification Act of 1949 nor the title 5 codification specifically 

addressed pay limits for appointments under sections 209(f) and (g). The 

Classification Act of 1949 and its predecessor Act of 1923 were codified in Chapter 

( ... continued) 

"appointment without regard to the civil-service laws" in section 209(f) was intended 

to provide the agency with flexible hiring authority. Fishbein v. HHS, 102 M.S.P.R. 4 

(M.S.P.B. 2006). The court also cited a U.S. Court of Appeals for the Federal Circuit 

decision which found that similar language regarding TVA employees meant that 

such appointments are to the excepted service rather than the competitive service. 

Dodd v. Tennessee Valley Authority, 770 F.2d 1038, 1040 (Fed. Cir. 1985) (authority 

for appointment of TVA employees "without regard to the civil service laws" placed 

TVA employees in the excepted service, not the competitive service.) 

49 See, for example, Abell v. United States, 518 F.2d 1369 (Ct. CI.1975); Afshari v. 

Leavitt, 2006 U.S. Dist. LEXIS 77107 (N.D. W. Va. Oct. 23, 2006). 

50 Pub. L. No. 81-429, §1106(a), 63 Stat. 954, 972 (Oct. 28,1949). 

51 Pub. L. No. 89-554, 80 Stat. 378 (Sep. 6, 1966). See the Background section for a 

discussion of the meaning of codification and enactment into positive law. 

Page 18 8-323357 
139 


86287.114

51 ("Classification) and subchapter III ("General Schedule of Pay Rates") of Chapter 

53 of title 5. 52 Section 5373 is codified in subchapter VII ("Miscellaneous 

Provisions") of Chapter 53. Thus one possible reading of the codification is that the 

language in sections 209(f) and (g) that appointees may be "compensated without 

regard to the Classification Act of 1923" should not be interpreted as an exemption 

from the later enacted pay cap set forth in section 5373. 

However, this construction would conflict with actions of Congress subsequent to the 

enactment of section 5373. Congress's actions lead us to believe that it in fact did 

not intend that section 5373 would apply to these appointments. For example, even 

after section 5373 was enacted in 1964, Congress continued to impose a specific 

limit on pay for consultants and scientists appointed under sections 209(f) and (g). 

Every annual appropriation law enacted by Congress for 27 years after section 5373 

was effective contained a separate pay cap, which suggests that Congress did not 

consider these positions to be under any existing pay cap. Finally, in 1993, 

Congress enacted a permanent and separate pay cap. It restricted compensation 

for limited-time appointments to the maximum rate payable under 5 U.S.C. § 5376, 

which, as discussed above, limits pay to Executive Level IV. A permanent provision 

limiting pay to Executive Level IV would have been unnecessary if Congress 

believed that the pay restriction in 5 U.S.C. § 5373, which also limits pay to 

Executive Level IV, was applicable. Thus it appears that Congress did not intend for 

the 5 U.S.C. § 5373 pay cap to apply to consultants and scientists hired pursuant to 

42 U.S.C. §§ 209(f) and (g). 

Additional evidence that the 5 U.S.C. § 5373 pay cap does not apply to 42 U.S.C. 

§§ 209(f) or (g) appointees is provided by Congress' actions when it extended 

section 209 authority to certain Environmental Protection Agency (EPA) 

components. In 2005, Congress granted EPA authority to make a limited number of 

appointments "under the authority provided in 42 U.S.C. § 209" beginning in fiscal 

year 2006. That authority has twice been further granted and now extends through 

fiscal year 2015. 53 Our review of the legislative history of the appropriations 

52 Chapter 51 of title 5 contains the classification provisions of the General Schedule, 

and subchapter III of Chapter 53 of title 5 contains the General Schedule pay rates 

See S. Rep. No. 89-1380 (1966), pages 57, 102,212-213. 

53 "For fiscal years 2006 through 2011, the Administrator may, after consultation with 

the Office of Personnel Management, make not to exceed five appointments in any 

fiscal year under the authority provided in 42 U.S.C. § 209 for the Office of Research 

and Development." Department of the Interior, Environment, and Related Agencies 

Appropriations Act, 2006, Pub. L. No. 109-54, title II, 119 Stat. 499, 531 (Aug. 2, 

2005). The authority was extended to allow EPA to employ up to 30 persons at any 

one time under 42 U.S.C. § 209 by the Omnibus Appropriations Act, 2009, Pub. L. 

No. 111-8, title II, 123 Stat. 524, 729 (Mar. 11,2009), and extended through fiscal 

year 2015 by the Department of Interior, Environment, and Related Agencies 

(continued ... ) 

Page 19 8·323357 
140 


86287.115

provisions giving EPA this authority indicates that Congress had specific knowledge 

that both EPA and HHS were interpreting sections 209(f) and (g) as exempt from 5 

U.S.C. § 5373 limitations on pay. 

The recommendation that EPA request this title 42 authority came from a report by 

the National Research Council (NRC),54 which Congress had requested in the 

conference report accompanYin~ the law containing EPA's appropriations for Fiscal 

Year 1995, Public Law 103-327. 5 In that report and in subsequent testimony by a 

member of the NRC before a congressional subcommittee,56 NRC stated that "even 

greater measures" than the authority to appoint Senior Technical positions were 

"warranted and practicable to attract and retain outstanding research leaders." 

Senior Technical employees may be paid up to Executive Level III, currently 

$165,300, or in certain circumstances up to Executive Level II, currently $179,700. 57 

5 U.S.C. § 5376. Such levels of pay are above those set forth in section 5373, 

which sets a pay cap of Executive Level IV, currently $155,500. The NRC therefore 

recommended that EPA seek authority to create and fill positions similar to the 

authority contained in 42 U.S.C. §§ 209(f) and (g).58 

Further, in hearings for Fiscal Year 2009 appropriations, before Congress extended 

the length of the authority, the Chairman of the House Subcommittee on Interior, 

Environment, and Related Agencies, asked EPA for information about its use of the 

title 42 authority and whether there were any statutory or regulatory caps on pay for 

( ... continued) 

Appropriations Act, 2010, Pub. L. No. 111-88, Division A, title 11,123 Stat. 2904, 

2938 (Oct. 30, 2009). 

54 Strengthening Science at the U. S. Environmental Protection Agency: ResearchManagement and Peer-Review Practices, Committee on Research and Peer Review 

in EPA, Board on Environmental Studies in Toxicology, National Research Council 

(2000). 

55 H.R. Conf. Rep. No. 103-715 (1994). 

56 The testimony was given before the Environment, Technology and Standards 

Subcommittee, Committee on Science, U.S. House of Representatives. 

57 Salaries can be paid up to the Executive Level II when an agency has a 

performance appraisal system which, as designed and applied, is certified as 

making meaningful distinctions based on relative performance. 

58HR. 64: A Proposal to Strengthen Science at the Environmental Protection 

Agency, Hearings before the Environment, Technology and Standards 

Subcommittee, Committee on Science, U.S. House of Representatives, 10th Congo 

(March 29, 2001) (Statement of Raymond C. Loehr, Ph.D.), available at 

http://www7.nationalacademies.org/ocga/testimony/HR64.asp (last visited July 5, 

2012). 

Page 20 8-323357 
141 


86287.116

scientists employed under this authority. The record shows that EPA responded to 

the Subcommittee that there is no statutory or regulatory cap on what scientists 

hired pursuant to the authority can be paid, although EPA had established an 

internal policy capping pay at $250,000.59 This amount is clearly in excess of the 

maximum amount authorized under 5 U.S.C. § 5373 of $155,500. Finally, as noted 

by both HHS and OPM in their letters to GAO, in the conference report for H.R. 

2996, which was enacted as Public Law 111-88 (October 30,2009), the conferees 

describe the title 42 authority granted to EPA as supporting the public's best interest 

by allowing EPA to employ elite scientists who are compensated at or near market 

rates. 60 After these hearings and receipt of these reports, Congress passed 

appropriations authorizing the program at EPA. 

This evidence that Congress viewed the authority under 42 U.S.C. §§ 209(f) and (g) 

as providing pay in excess of the 5 U.S.C. § 5373 pay cap at HHS and EPA, and 

Congress's decision to extend section 209 authority to certain EPA appointees 

knowing that EPA planned to set compensation at a level higher than the 

5 U.S.C. § 5373 pay cap, lends further support to the conclusion that Congress does 

not view the 5 U.S.C. § 5373 pay cap as applying to sections 209 (f) and (g) 

appointees. 

Finally, we note that both HHS and OPM maintain that the section 5373 pay cap 

does not apply to appointments under 42 U.S.C. §§ 209(f) and (g). OPM defers to 

HHS with regard to the title 42 authorities. Given the evidence of how Congress 

viewed the authority and the complexity of the numerous pay authorities, we do not 

object to HHS's interpretation of its pay authority. 

CONCLUSION 

With respect to the first issue, the 1993 appropriations language unequivocally limits 

the pay of consultants and scientists appOinted for limited periods of time pursuant to 

42 U.S.C. §§ 209(f) or (g) at agencies that are funded by the Labor-HHS-Education 

Appropriations Acts. With regard to the two title 5 limitations, we think the pay 

limitations do not apply to appointments made pursuant to 42 U.S.C. §§ 209(f) or (g). 

Some of the statutory pay provisions analyzed in this opinion, as mentioned earlier, 

were enacted nearly 70 years ago in different federal pay systems. As one court 

has observed, "although some pay systems are 'linked' to one another," they have 

59 Interior, Environment, and Related Agencies Appropriations for 2009: Hearings 

before the Subcomm. on Interior of the House Comm. on Appropriations, 11 Oth 

Congo 35 (2008). The appropriations for EPA for FY 2009 were subsequently 

passed as part of the Omnibus Appropriations for 2009, Pub. L No. 111-8 (2009). 

60 H. Rep. No. 111-316, at 130 (2009). 

Page 21 8·323357 
142 

Æ 


86287.117

not been "fastidiously integrated" to achieve uniform federal compensation 

policies.,,61 In this case, the issues raised - in particular the applicability of the two 

title 5 limitations on the title 42 authority to hire special consultants and fellows -

reflect the difficulty of applying distinct statutory schemes to determine whether 

specific pay limits apply. If Congress desires upper pay limits for appointments 

under sections 209(f) and (g), it may wish to consider amending these provisions to 

specifically establish such limits. 

If you have any questions, please contact Robert J. Cramer, Managing Associate 

General Counsel, at (202)512-7227. 

c>j..-~~ 

Lynn H. Gibson 

General Counsel 

61 International Organization of Masters, Mates & Pilots v. Brown, 698 F.2d 536,539 

(C.A.D.C. 1983). 

Page 22 8-323357