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[Senate Report 110-517]
[From the U.S. Government Publishing Office]

110th Congress 
 2d Session                      SENATE                          Report
                                                                110-517
_______________________________________________________________________

                                     

                                                      Calendar No. 1108

            SENIOR EXECUTIVE SERVICE DIVERSITY ASSURANCE ACT

                               __________

                              R E P O R T

                                 of the

                              COMMITTEE ON

                         HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2148

    TO PROVIDE FOR GREATER DIVERSITY WITHIN, AND TO IMPROVE POLICY 
        DIRECTION AND OVERSIGHT OF, THE SENIOR EXECUTIVE SERVICE

October 1 (legislative day, September 17), 2008.--Ordered to be printed
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
                     Kevin J. Landy, Chief Counsel
                        Kenya N. Wiley, Counsel
   Thomas J.R. Richards, Professional Staff Member, Subcommittee on 
  Oversight of Government Management, the Federal Workforce, and the 
                          District of Columbia
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
         Amanda Wood, Minority Director of Governmental Affairs
    Jennifer A. Hemingway, Minority Staff Director, Subcommittee on 
  Oversight of Government Management, the Federal Workforce, and the 
                          District of Columbia
                  Trina Driessnack Tyrer, Chief Clerk

                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................1
III. Legislative History..............................................7
 IV. Section-by-Section Analysis......................................8
  V. Estimated Cost of Legislation...................................10
 VI. Evaluation of Regulatory Impact.................................12
VII. Changes in Existing Law.........................................12

                                                      Calendar No. 1108
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-517

======================================================================

 
            SENIOR EXECUTIVE SERVICE DIVERSITY ASSURANCE ACT

                                _______
                                

October 1 (legislative day, September 17), 2008.--Ordered to be printed

                                _______
                                

Mr. Lieberman, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 2148]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2148) to provide 
for greater diversity within, and to improve policy direction 
and oversight of, the Senior Executive Service, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill (as amended) do pass.

                         I. Purpose and Summary

    The purpose of S. 2148 is to promote diversity in the SES. 
S. 2148, as amended, would create a new Senior Executive 
Service Resource Office (SESRO) at the Office of Personnel 
Management (OPM) to develop and monitor programs for the 
advancement and training of senior executives, including the 
Senior Executive Service Federal Candidate Development Program. 
The bill also requires each agency to submit a plan to OPM on 
how the agency is identifying and eliminating barriers to 
minorities, women, and individuals with disabilities to obtain 
appointments to the SES. The involvement of individuals with a 
variety of experiences and perspectives in the consideration of 
SES candidates helps ensure the selection of a strong and 
diverse SES workforce. S. 2148 requires agencies, to the extent 
practicable, to include minorities, women, and individuals with 
disabilities on their Executive Resources Boards (ERB) as well 
as any other panels that evaluate SES candidates.

                             II. Background

           GENERAL BACKGROUND ON THE SENIOR EXECUTIVE SERVICE

    The SES was established by Title IV of the Civil Service 
Reform Act of 1978, P.L. 95-454, and encompasses managerial, 
supervisory, and policy positions above the GS-15 level that 
are not filled by presidential appointment. The SES includes 
nearly 7,000 federal employees.\1\ Of those, approximately 
6,000 are career appointed executives.\2\ SES career 
appointments do not have time limitations, whereas non-career 
SES employees are limited in their promotion potential and time 
in service. Career SES employees are provided more job 
protections and advancement potential than non-career SES 
employees, such as adherence to merit system principles and 
whistleblower rights. However, career-SES employees still do 
not have rights such as collective bargaining that are afforded 
other federal employees.\3\
---------------------------------------------------------------------------
    \1\U.S. Office of Personnel Management, Senior Executive Service 
Survey Results, May 2008.
    \2\Statement of Katherine Siggerud, Director of Physical 
Infrastructure Issues, and George Stalcup, Director of Strategic 
Issues, Government Accountability Office, Human Capital: Diversity in 
the Federal SES and Senior Levels of the U.S. Postal Service and 
Processes for Selecting New Executives (GAO-08-609T) (hereinafter ``GAO 
Statement''), for the Joint Hearing on ``Managing Diversity of Senior 
Leadership in the Federal Workforce and Postal Service'' Senate 
Homeland Security and Governmental Affairs Subcommittee on Oversight of 
Government Management, the Federal Workforce, and the District of 
Columbia and the House Oversight and Government Reform Subcommittee on 
the Federal Workforce, the Postal Service, and the District of 
Columbia: April 3, 2008 (hereinafter ``Joint Hearing'').
    \3\5 U.S.C. Sec. 7103.
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    Career appointees are selected for the SES on the basis of 
leadership qualifications. Candidates are initially evaluated 
by an internal agency Executive Resources Board (ERB) made up 
of SES volunteers or selected by an agency head. The candidates 
are ranked by the ERB and written recommendations are made to 
the Office of Personnel Management (OPM). OPM is required to 
establish Qualifications Review Boards (QRBs) to certify 
candidate qualifications. The appointing authority in an agency 
makes the final determination of which candidate will be hired. 
Non-career appointees do not have to meet the same competitive 
selection requirements as career SES candidates and do not 
receive the same entitlements as career senior executives.
    The Civil Service Reform Act of 1978 required that OPM have 
primary oversight of the SES and help agencies establish 
programs for systematic and continuing development of senior 
executives.\4\ OPM had a centralized office that handled the 
programs and policy development of the SES. However, in 2003, 
OPM decentralized those office functions as part of a larger 
internal management reorganization. Since then, senior 
executives have not had a central office to provide needed 
resources. According to the Senior Executives Association 
(SEA):
---------------------------------------------------------------------------
    \4\Pub. L. No. 95-454 (Oct. 10, 1978).
---------------------------------------------------------------------------
          Until several years ago, a central office at the 
        Office of Personnel Management dealt with all issues 
        regarding SES policy and programs, allowing for 
        appropriate changes in policy to reflect the realities 
        of managing the SES workforce. It has become evident 
        that, with no focal point for the SES at OPM, policy 
        and implementation have been disconnected, and problems 
        have ensued. The most glaring example of this has been 
        the poor implementation of certification of SES 
        performance management systems at the agency level. 
        With inadequate support from OPM, congressional 
        oversight and investigation ultimately forced OPM to 
        take note and provide agencies with greater guidance on 
        the requirements for certification. By having an office 
        that is responsible for developing and implementing 
        policy with regard to the executive corps, as well as 
        conducting oversight, there will be greater 
        accountability and response to concerns from both 
        agencies and Congress.\5\

    \5\Letter to Senator Daniel K. Akaka, Chairman, Senate Subcommittee 
on Oversight of Government Management, the Federal Workforce, and the 
District of Columbia, and Representative Danny K. Davis, Chairman, 
House Subcommittee on Federal Workforce, the Postal Service, and the 
District of Columbia, from Carol Bonosaro, President, Senior Executives 
Association: October 9, 2007.
---------------------------------------------------------------------------
    As the Executive Director of the Asian American Government 
Executive Network (AAGEN) testified at the Joint Hearing, a 
single office providing effective oversight of the SES is 
essential to ensuring that OPM's and agencies' SES recruitment 
efforts adequately address diversity.\6\ S. 2148 requires OPM 
to re-establish the SESRO at OPM. The SESRO will serve as a 
central resource for agencies and will provide oversight of 
agency recruitment and candidate development efforts.
---------------------------------------------------------------------------
    \6\Statement of Carson Eoyang, Executive Director, Asian American 
Government Executive Network for the Joint Hearing (hereinafter Eoyang 
Statement).
---------------------------------------------------------------------------
    OPM believes that the requirement under S. 2148 to 
establish a Senior Executive Service Resource Office (SESRO) 
would undo significant aspects of their 2003 reorganizational 
structure and have substantial cost implications.\7\ Based on 
the concerns raised by senior executives, the Committee 
recognizes the need for a central office at OPM to address 
policy and program development for the SES.
---------------------------------------------------------------------------
    \7\Statement of Nancy Kichak, Associate Director, Office of 
Personnel Management for the Joint Hearing (hereinafter Kichak 
Statement).
---------------------------------------------------------------------------

          IMPROVING DIVERSITY IN THE SENIOR EXECUTIVE SERVICE

    According to a 2003 Government Accountability Office (GAO) 
report, ``Senior Executive Service: Enhanced Agency Efforts 
Needed to Improve Diversity as the Senior Corps Turns Over,'' 
as the demographics of federal employees change, ``diversity 
has evolved from public policy to a business need.''\8\ 
Diversity within the SES will help better ensure the executive 
management of the federal government is responsive to the 
needs, policies, and goals of the Nation. As GAO witnesses 
testified at the Joint Hearing, having ``[a] diverse SES corps, 
which generally represents the most experienced segment of the 
federal workforce, can be an organizational strength that can 
bring a wider variety of perspectives and approaches to bear on 
policy development and implementation, strategic planning, 
problem solving, and decision making.''\9\ At the same hearing, 
the witness for AAGEN said, ``[t]he federal government should 
have a diverse workforce not only to demonstrate that it 
represents the American population, but also because diversity 
enhances the effectiveness of government.'' That witness 
specified law enforcement agencies as an example of how 
diversity among senior executives can impact the public: ``our 
various law enforcement agencies at all levels and across the 
country must begin to mirror our nation's diversity if they are 
to maintain domestic peace and equitably enforce our laws 
within and across our social strata.''\10\
---------------------------------------------------------------------------
    \8\GAO, Senior Executive Service: Enhanced Agency Efforts Needed to 
Improve Diversity as the Senior Corps Turns Over, GAO-03-34, 
Washington, DC: January 2003.
    \9\See GAO Statement at p. 2.
    \10\See Eoyang Statement at p. 3.
---------------------------------------------------------------------------
    The percentage of minorities and women at senior pay levels 
in the federal government, including the SES, is lower than in 
the civilian workforce and the federal workforce as a whole. 
According to the 2007 Federal Equal Opportunity Recruitment 
Program report by OPM, minorities represent 32.8 percent of the 
overall federal workforce and women represent 43.9 percent of 
the overall federal workforce.\11\ GAO reports that in the SES, 
minorities represent less than 16 percent of the senior 
executive workforce and women represent 29 percent of the 
senior executive workforce.\12\
---------------------------------------------------------------------------
    \11\Federal Equal Opportunity Recruitment Program Report for Fiscal 
Year 2007, Linda Springer, Director, Office of Personnel Management, 
http://www.opm.gov/About_OPM/Reports/FEORP/2007/feorp2007.pdf.
    \12\See GAO Statement.
---------------------------------------------------------------------------
    There also are lower numbers of minorities and women in the 
SES compared to the numbers of minorities and women employed in 
the GS-14 and GS-15 levels, the feeder pools for the SES. GAO 
reports that in 2007, minorities made up 22.5 percent of the 
employees in the SES development pool (compared to the 
previously cited 16 percent of career SES employees), and that 
women made up 34 percent of the employees serving at the GS-14 
and GS-15 levels (compared to the previously cited 29 percent 
of the career SES in 2007).\13\
---------------------------------------------------------------------------
    \13\See id.
---------------------------------------------------------------------------
    In a GAO report from January 2003, OPM cited a number of 
steps it had taken to diversify the SES, including fostering 
the establishment and growth of agency development 
programs.\14\ OPM's subsequent strategy, launched in 2003, for 
increasing executive diversity included efforts to encourage 
agencies to enhance diversity at entry and middle levels, 
identify individuals with leadership ability early in their 
careers, and provide experience and learning opportunities to 
prepare them for senior level positions.\15\
---------------------------------------------------------------------------
    \14\Enhanced Agency Efforts Needed to Improve Diversity as the 
Senior Corps Turns Over, Government Accountability Office, GAO-03-34, 
January 17, 2003.
    \15\Building and Maintaining a Diverse and High Qualified 
Workforce, A Guide for Federal Agencies, Office of Personnel 
Management, 2003, http://www.opm.gov/diversity/guide.htm.
---------------------------------------------------------------------------
    In 2003, OPM announced the Candidate Development Program 
(CDP) to ``bring together a diverse cadre of potential 
executives.''\16\ The CDP was designed to create pools of 
qualified executives for SES positions and was intended to 
include a variety of elements that prepare candidates for 
career success. Elements of the program include rotational 
assignments, formal training, mentoring, and performance 
assessment. Graduates of the CDP are certified by the SES 
Qualifications Review Board and may be selected for an SES 
position anywhere in the federal government without further 
competition. The program is open to individuals at the GS-14 
and GS-15 grade levels, or the equivalent from outside the 
federal government, with the duration of the candidate's 
participation lasting 12 to 24 months.
---------------------------------------------------------------------------
    \16\News Release: OPM Launches the SES Candidate Development 
Program, Office of Personnel Management, April 10, 2003, http://
www.opm.gov/pressrel/2003/EB-SESCDP.asp.
---------------------------------------------------------------------------
    Despite these efforts, there is room for improvement. In 
2003, GAO evaluated data from 2000 on diversity in the SES.\17\ 
At the time, the report showed 67 percent of senior executives 
were white males; 19 percent were white females; and about 14 
percent were minority males and females.\18\ According to GAO's 
testimony at the April 3, 2008, joint hearing, by the end of 
fiscal year 2007, there were small improvements made in the 
overall representation of women and minorities over the past 
six years, but gains were inconsistent among the 25 federal 
agencies analyzed and offset by losses of women and minorities 
at nine agencies.\19\ More than 60 percent of SES employees 
serving in 2000 had retired by 2007, and in the next ten years, 
90 percent of senior executives serving today will be eligible 
for retirement.\20\ The new hiring required as a result of 
turnover in the SES workforce presents an opportunity for 
improving diversity among SES employees.
---------------------------------------------------------------------------
    \17\Supra note 13.
    \18\Id.
    \19\See GAO Statement at p. 4.
    \20\Congressional Budget Justification, Performance Budget, Fiscal 
Year 2009, U.S. Office of Personnel Management, February 4, 2008.
---------------------------------------------------------------------------
    S. 2148, as amended, attempts to improve the diversity of 
the SES by encouraging diversity in the ERB panels that review 
applicants. This provision would allow the reviewing panels to 
reflect the diversity of the candidate pool. The SESRO would be 
required to develop a range of programs focused on recruitment 
and mentoring for women, minorities, and individuals with 
disabilities. Agencies would have to work with OPM and the 
Chief Human Capital Officers Council to develop plans to 
improve diversity in the SES. In addition, the SESRO would be 
required to collect data on diversity in the SES and report 
that information to Congress.

                        CONSTITUTIONAL CONCERNS

    OPM and the Department of Justice (DOJ) have expressed 
concerns over the constitutionality of the provisions in S. 
2148, as introduced, and the provisions of the companion House 
legislation, H.R. 3774. Specifically, they argued that 
provisions in the two bills violated the equal protection 
requirements under the Due Process Clause of the Fifth 
Amendment and the Appointments Clause of the Constitution.\21\ 
In a letter to Congressman Henry Waxman, DOJ elaborated on the 
concerns that several of the provisions in the legislation 
violated the equal protection requirements pursuant to the Due 
Process Clause of the Fifth Amendment.\22\ For example, DOJ 
argued that requiring ``at least one woman and one minority'' 
sit on a three-person review panel would impose an 
unconstitutional racial and gender quota. DOJ also argued that 
provisions requiring targeted recruitment of minorities and 
women, and requiring that hiring officials be notified of the 
racial and gender demographics of the applicant pool, may be 
held unconstitutional on equal protection grounds.\23\
---------------------------------------------------------------------------
    \21\See Kichak Statement at p. 3.
    \22\Letter to Congressman Henry Waxman, Chairman, House Oversight 
and Government Reform Committee, from the U.S. Department of Justice, 
Office of Legislative Affairs, April 30, 2008.
    \23\Id.
---------------------------------------------------------------------------
    During its consideration of S. 2148, the Committee adopted 
a substitute amendment offered by Senator Akaka that included 
provisions addressing the agencies' constitutional concerns. 
For example, the amendment removed the requirement for a three-
person review panel to be made up of one woman and one ethnic 
or racial minority. The substitute amendment requires that ``to 
the extent practicable'' agencies create diversity in the 
existing Executive Review Boards, which evaluate and select 
candidates for the SES.
    In a memo prepared for the Senate Subcommittee on Oversight 
of Government Management, the Congressional Research Service 
(CRS) provided a legal analysis of the amended version of S. 
2148 as it pertains to the equal protection concerns raised by 
OPM and DOJ, and concluded that the new provisions contained in 
Senator Akaka's substitute amendment likely would survive a 
constitutional challenge.\24\ CRS noted that ``the distinction 
between `inclusive' forms of affirmative action--such as 
recruitment, advertising in minority media, and other outreach 
to minority communities--and `exclusive' affirmative action--
such as quotas, set-asides, or layoff preferences--has featured 
prominently in many decisions.''\25\
---------------------------------------------------------------------------
    \24\Congressional Research Service (CRS) memorandum of legal 
analysis on the Akaka Substitute Amendment to S. 2148 to Senate 
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia, by Jody Feder, June 24, 2008 
(hereinafter ``CRS Memo'') at p. 5.
    \25\See CRS Memo at p. 3 (citing Allen v. Alabama State Bd. of 
Educ., 164 F.3d 1347, 1352 (11th Cir. 1999) (racially conscious 
outreach efforts to broaden applicant pool not subject to strict 
scrutiny), vacated 216 F.3d 1263 (11th Cir. 2000); Duffy v. Wolle, 123 
F.3d 1026, 1038-39 (8th Cir. 1997) (``An employer's affirmative efforts 
to recruit female and minority applicants does not constitute 
discrimination.''); Ensley Branch, NAACP, 31 F.3d 1548, 1571 (11th Cir. 
1994) (describing efforts to actively encourage minorities to apply for 
jobs, including waivers of application fees, as ``race-neutral''); 
Billish v. City of Chicago, 962 F.2d 1269, 1290 (7th Cir. 1992) 
(describing aggressive recruiting as ``race-neutral procedures'') rev'd 
on other grounds, 989 F.2d 890 (7th Cir. 1993) (en banc)).
---------------------------------------------------------------------------
    OPM and DOJ had raised concerns that requiring the 
collection of data and statistical information on diversity in 
the SES violated equal protection requirements. OPM and DOJ 
argued that under the original legislation a provision 
requiring that demographic information be given to hiring 
officials ``is likely to be construed as a means of impelling 
the consideration of race in hiring decisions.''\26\ The 
requirement to provide hiring officials with this statistical 
data was removed in the amended bill, although the SESRO is 
still required to collect the data. CRS noted that courts 
generally have not found data collection activities concerning 
the racial or gender makeup of a workforce to violate the 
Constitution.\27\
---------------------------------------------------------------------------
    \26\Supra note 23.
    \27\See CRS Memo at p. 3 (citing Sussman v. Tanoue, 39 F.Supp.2d 
13, 24 (D.D.C. 1999) (quoting U.S. v. New Hampshire, 539 F.2d 277, 280 
(1st Cir. 1976) (``Statistical information as such is a rather neutral 
entity, which only becomes meaningful when it is interpreted'').
---------------------------------------------------------------------------
    In addition, DOJ raised concerns with the requirement for 
the minority recruitment program proposed by the bill.\28\ 
However, there is already a requirement under section 7201 of 
title 5, U.S.C., for OPM to conduct a minority recruitment 
program. Furthermore, under section 2302(b) of title 5, hiring 
officials may not take into consideration ``race, color, 
religion, sex, or national origin'' when making employment 
decisions. According to the U.S. Court of Appeals for the 
Eleventh Circuit, ``where the government does not exclude 
persons from benefits based on race, but chooses to undertake 
outreach efforts to persons of one race, broadening the pool of 
applicants, but disadvantaging no one, strict scrutiny is 
generally inapplicable.''\29\ CRS noted in its legal analysis:

    \28\Supra note 23.
    \29\Allen v. Alabama State Bd. of Educ., 164 F.3d at 1352.
---------------------------------------------------------------------------
          The SES recruitment provision as currently drafted, 
        appears strikingly similar to the dozens, if not 
        hundreds, of existing federal statutory and regulatory 
        provisions that specifically refer to race, ethnicity, 
        gender, or disability as factors to be considered in 
        the administration of federal programs. Such measures 
        may include, but are not limited to, goals, timetables, 
        set-asides, priorities, outreach, recruitment, and 
        quotas, and few, if any, of these provisions appear to 
        have been subject to constitutional scrutiny.\30\

    \30\See CRS Memo at p. 5 (citing CRS Report RL32565, Survey of 
Federal Laws and Regulations Mandating Affirmative Action Goals, Set-
Asides, or Other Preferences Based on Race, Gender, or Ethnicity, by 
Charles V. Dale and Cassandra Foley).
---------------------------------------------------------------------------
    DOJ also expressed concerns that the legislation violated 
the Appointments Clause of the Constitution. DOJ argued that 
the authority proposed for the SESRO in S. 2148 ``would entail 
the kind of delegated sovereign authority, or significant 
governmental authority, that can only be exercised by Officers 
of the United States appointed in accordance with the 
Appointments Clause, U.S. Constitution Article 2, section 2, 
clause 2.''\31\ Senator Akaka's substitute amendment addressed 
the Appointments Clause concern by explicitly giving the 
Director of OPM the authority to appoint employees to staff the 
SESRO.
---------------------------------------------------------------------------
    \31\Supra note 23.
---------------------------------------------------------------------------

                        III. Legislative History

    S. 2148, the Senior Executive Service Diversity Assurance 
Act, was introduced by Senator Daniel K. Akaka on October 4, 
2007. The bill was read twice and referred to the Committee on 
Homeland Security and Governmental Affairs. S. 2148 was 
referred to the Senate Homeland Security and Governmental 
Affairs Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia on October 19, 
2007. Representative Danny K. Davis introduced a companion 
bill, H.R. 3774, on October 9, 2007.
    On April 3, 2008, the Subcommittee on Oversight of 
Government Management, the Federal Workforce, and the District 
of Columbia held a joint hearing with the House Subcommittee on 
Federal Workforce, the Postal Service, and the District of 
Columbia on the Senior Executive Service Diversity Assurance 
Act. Testimony was received from: Nancy Kichak, Associate 
Director, OPM; George Stalcup, Director, Strategic Issues, GAO; 
Katherine Siggerud, Director, Physical Infrastructure Issues, 
GAO; William Bransford, General Counsel, Senior Executives 
Association; William Brown, President, African American Federal 
Executives Association; Rhonda Trent, President, Federally 
Employed Women; Carson Eoyang, Executive Director, Asian 
American Government Executives Network; Jose Osegueda, 
President, National Association of Hispanic Federal Executives; 
and Darlene Young, President, Blacks in Government.
    The Committee considered S. 2148 on June 25, 2008. By voice 
vote the Committee ordered the bill favorably reported, as 
amended by Senator Akaka's amendment in the nature of a 
substitute, with Senator Coburn recorded as ``no.'' Members 
present were Lieberman, Akaka, Carper, Pryor, McCaskill, 
Collins, Coleman, Coburn, and Sununu. The substitute amendment 
offered by Senator Akaka added a findings section to the bill 
to demonstrate the need for improving diversity in the SES. It 
also assigned specific duties to the SESRO that included 
tracking statistical data on diversity in the SES, establishing 
a diversity recruitment program, and helping agencies improve 
diversity in their SES. The substitute amendment deleted the 
language from the original bill establishing a diversity panel, 
and instead required agencies to make the ERBs diverse to the 
extent practical. Finally, language was added requiring 
agencies to develop plans to improve diversity, coordinate the 
development of those plans with OPM and the Chief Human Capital 
Officers Council, and report the progress to Congress on the 
extent to which the agency has demonstrated a commitment to 
diversity.

                    IV. Section-by-Section Analysis

Section 1. Short title

    This section provides that the short title of the bill is 
the ``Senior Executive Service Diversity Assurance Act.''

Section 2. Findings

    This section provides findings, including statistics from 
GAO and OPM that demonstrate the need for this legislation. The 
statistics reveal the under-representation of women and 
minorities in the SES.

Section 3. Definitions

    This section includes the following definitions:
     The term ``Director'' means the Director of OPM.
     The term ``Senior Executive Service'' means Senior 
Executive Service positions, which include any position in an 
agency which is classified above GS-15 or in level IV or V of 
the Executive Schedule, or an equivalent position which fits 
certain criteria and does not require a Senate confirmed 
presidential appointment.
     The term ``agency'' has the meaning provided in 5 
U.S.C. 3132 which is an executive agency, except a government 
corporation and GAO, and excluding some agencies identified in 
section 3132 such as the Federal Bureau of Investigation, the 
Drug Enforcement Agency, and the Central Intelligence Agency.
     The term ``career appointee'' means an individual 
in an SES position whose appointment to the position or 
previous appointment to another SES position was based on 
approval by OPM of the individual's executive qualifications.
     The term ``career reserved position'' means a 
position which is required to be filled by a career appointee 
and which is designated as a career reserved position by the 
head of the agency.
     The term ``SES Resource Office'' refers to the 
Senior Executive Service Resource Office established by section 
four of the bill.

Section 4. Senior Executive Service Resource Office

    This section re-establishes the Senior Executive Service 
Resource Office (SESRO) within OPM. Subsection (a) requires the 
Director of OPM to establish the SESRO within six months of 
enactment. This subsection provides that the mission of the new 
office is to improve the efficiency, effectiveness, and 
productivity of the SES; to advance the professionalism of the 
SES; and to ensure that in seeking to achieve an SES that is 
reflective of the nation's diversity, recruitment is from 
qualified individuals.
    Subsection (b) describes the functions of the SESRO, 
including recommending regulations to the Director of OPM and 
providing guidance to agencies on the structure, management, 
and diverse composition of the SES. This subsection provides a 
number of ways that the SESRO must carry out its 
responsibilities, including: creating policies for the 
management and improvement of the SES; providing oversight of 
the performance, structure, and composition of the SES; 
managing the SES pay system; developing standards for 
certification of each agency's SES performance management 
system; and developing programs for the advancement and 
training of senior executives. OPM is currently required by 5 
U.S.C. Sec. 3393(c) to establish qualifications review boards 
(QRBs) to certify the qualifications of SES candidates. Under 
subsection (b), the SESRO will be responsible for administering 
QRBs.
    Subsection (b) also requires the SESRO to compile and 
maintain annual statistics related to the composition of the 
SES and requires OPM to make those statistics publicly 
available on its website. The SESRO must collect information 
such as the number of career reserve positions at each agency; 
the number of vacant career reserve positions at each agency; 
the time it takes to fill a position; how long the position is 
vacant; the number of individuals who have been certified as 
having the qualifications necessary to be appointed to the SES 
and the make-up of that group with regard to race, ethnicity, 
sex, age, and individuals with disabilities; and the make-up of 
the SES with regard to race, ethnicity, sex, age, and 
individuals with disabilities. The SESRO must also collect data 
on the makeup of executive resources boards (ERBs) with regard 
to race, ethnicity, sex, and individuals with disabilities. OPM 
does not currently collect data on the composition of these 
boards.
    Subsection (b) also requires the SESRO to establish 
mentoring programs for potential SES candidates, conduct a 
continuing program to recruit women, minorities, and 
individuals with disabilities for SES positions, advise 
agencies on how an agency's equal employment or diversity 
office could be helpful in the SES appointments process, and 
evaluate and implement strategies to ensure that agencies 
conduct outreach to identify SES candidates in other agencies.
    Subsection (c) provides that, in making the annual 
statistics publicly available, the SESRO may combine data for 
smaller agencies to protect individually identifiable 
information.
    Subsection (d) requires the head of each agency to provide 
OPM with the information needed for the SESRO to compile its 
annual statistics.
    Subsection (e) provides that the Director of the OPM shall 
appoint employees to staff the SESRO.

Section 5. Career appointments

    Subsection (a) requires the head of an agency, to the 
extent practicable, to ensure diversity of the agency's ERBs by 
including minorities, women, and individuals with disabilities 
on these boards.
    Subsection (b) requires OPM to issue regulations to 
implement subsection (a) within one year of enactment.
    Subsection (c) requires OPM to report to the House 
Committee on Oversight and Government Reform and the Senate 
Committee on Homeland Security and Governmental Affairs within 
one year of enactment with an evaluation of agency efforts to 
improve the diversity of ERBs based on the annual statistics 
maintained by the SESRO.

Section 6. Encouraging a more diverse senior executive service

    Subsection (a) requires each agency, in consultation with 
OPM and the Chief Human Officers Council, to submit to OPM a 
plan to improve opportunities for the advancement and 
appointment of minorities, women, and individuals with 
disabilities to the SES. Each agency plan must address how the 
agency will identify and eliminate barriers that impair the 
ability of minorities, women, and individuals with disabilities 
to obtain SES appointments and any actions the agency is taking 
to provide opportunities for advancement. Such plans will be 
included in agencies' overall human capital plan. Subsection 
(a) provides examples of ways agencies can help employees 
advance, including conducting outreach, providing training 
programs to foster leadership development, identifying 
opportunities for employees to enhance their careers, assessing 
internal availability of candidates for SES positions, and 
taking inventory of employee skills and addressing any gaps in 
skills identified.
    Under subsection (a), agency plans are required to be 
updated at least every two years during the ten years following 
enactment of this Act. OPM is required to evaluate whether each 
agency plan sufficiently demonstrates the agency's commitment 
to providing opportunities for SES appointments of minorities, 
women, and individuals with disabilities and determine whether 
to approve the plan.
    Subsection (b) requires OPM, within six months after the 
deadline for agencies to submit a report or update, to submit a 
summary and evaluation of agency plans to the House Committee 
on Oversight and Government Reform and the Senate Committee on 
Homeland Security and Governmental Affairs.
    Subsection (c) requires OPM to evaluate existing reporting 
requirements such as section 717 of the Civil Rights Act of 
1964 and determine how agency reporting can be done in a way 
that is consistent with similar reporting requirements but does 
not duplicate those requirements.

                    V. Estimated Cost of Legislation

                                                     June 27, 2008.
Hon. Joseph I. Lieberman,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2148, the Senior 
Executive Service Diversity Assurance Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

S. 2148--Senior Executive Service Diversity Assurance Act

    Summary: S. 2148 would establish a Senior Executive Service 
Resource Office within the Office of Personnel Management (OPM) 
to oversee executive agencies' efforts to improve the 
management of the Senior Executive Service (SES). The bill also 
would require agencies to prepare plans to increase diversity 
within the SES.
    CBO estimates that implementing S. 2148 would cost $2 
million in 2009 and $22 million over the 2009-2013 period, 
assuming appropriation of the necessary amounts. Enacting the 
legislation would not affect direct spending or revenues. S. 
2148 contains no intergovernmental or private-sector mandates 
as defined in Unfunded Mandates Reform Act (UMRA) and would not 
affect the budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2148 is shown in the following table. 
The costs of this legislation fall primarily within budget 
function 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                              --------------------------------------------------
                                                                2009    2010    2011    2012    2013   2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level................................       2       5       5       5       5        22
Estimated Outlays............................................       2       5       5       5       5        22
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted near the start of fiscal year 2009 and 
that spending would follow historical patterns for similar 
programs.
    The SES was created in 1979 to provide a systematic program 
to recruit, retain, develop, and manage senior executives in 
the federal government. Its members generally represent the 
most experienced segment of the federal workforce and operate 
and oversee approximately 75 federal agencies. OPM manages the 
overall program and assists agencies as they select, develop, 
and manage federal executives. According to the Government 
Accountability Office (GAO), there are currently about 6,500 
SES employees.
    According to OPM, GAO, and selected agencies with SES 
employees, most of the provisions of S. 2148 would expand the 
current SES-related duties of OPM and affected agencies. The 
legislation would establish a new office within OPM to provide 
additional oversight of executive agencies' efforts to recruit 
and develop candidates for SES positions. In addition, the 
legislation would require individual agencies to develop and 
implement plans to enhance the diversity of their SES employees 
and to report on those efforts.
    Based on information from OPM and other affected agencies, 
CBO estimates that implementing S. 2148 would cost $2 million 
in 2009 and $22 million over the 2009-2013 period, assuming 
appropriation of the necessary amounts. Those costs would cover 
additional staff and expenses related to the new office in OPM, 
which CBO expects would be fully operational in 2010. Our 
estimate also includes increased costs for other agencies to 
comply with new reporting requirements.
    Intergovernmental and private-sector impact: S. 2148 
contains no intergovernmental or private-sector impact as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO estimate: On May 22, 2008, CBO provided a cost 
estimate for H.R. 3774, the Senior Executive Service Diversity 
Assurance Act, as ordered reported by the House Committee on 
Oversight and Government Reform on May 1, 2008. The two pieces 
of legislation are similar, and the CBO cost estimates are 
identical.
    Estimate prepared by: Federal Costs: Matthew Pickford; 
Impact on State, Local, and Tribal Governments: Elizabeth Cove, 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. CBO states that 
there are no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and no costs on 
State, local, or tribal governments. The legislation contains 
no other regulatory impact.

                      VII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic and existing law, in which no 
change is proposed, is shown in roman):

                                TITLE 5

PART III--EMPLOYEES

           *       *       *       *       *       *       *

Subpart B--Employment and Retention

           *       *       *       *       *       *       *

CHAPTER 33--EXAMINATION, SELECTION, AND PLACEMENT

           *       *       *       *       *       *       *

 Subchapter VIII--Appointment, Reassignment, Transfer, and Development 
in the Senior Executive Service

           *       *       *       *       *       *       *

Sec. 3393. Career appointments

    (a) * * *
    (b) Each agency shall establish one or more executive 
resources boards, as appropriate, the members of which shall be 
appointed by the head of the agency from among employees of the 
agency or commissioned officers of the uniformed services 
serving on active duty in such agency. In establishing an 
executive resources board, the head of the agency shall, to the 
extent practicable, ensure diversity of the board and of any 
subgroup thereof or other evaluation panel related to the merit 
staffing process for career appointees, by including members of 
racial and ethnic minority groups, women, and individuals with 
disabilities. The boards shall, in accordance with merit 
staffing requirements established by the Office, conduct the 
merit staffing process for career appointees, including--
         (1) all groups of qualified individuals within the 
        civil service; or
         (2) all groups of qualified individuals whether or not 
        within the civil service.

           *       *       *       *       *       *       *

                                  
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