United States General Accounting Office

GAO Staff Study

May 1997 THE EXCEPTED

SERVICE

A Research Profile

GAO/GGD-97-72

Preface

The Government Performance and Results Act of 1993 (GPRA) has put

discussions of civil service reform in a new light. Beginning this year, GPRA

requires federal agencies to identify their missions and strategic goals,

create measures by which to gauge their progress in meeting these goals,

and focus their resources—whether budgetary, technological, or

human—on creating results. But a key question is whether, under the

current civil service system, agencies will have the flexibility to shape their

human resource management (HRM) systems to meet these new needs. As

we testified before the House Civil Service Subcommittee in October 1995,

the civil service system as a whole is still viewed by many as burdensome

to managers, unappealing to ambitious recruits, hidebound and outdated,

overregulated, and inflexible.1

When considering civil service reform, it is useful to remember that the

federal government is not the “single employer” it is widely reputed to be.

In the broadest sense, the civil service is actually divided into three

services, for which different statutory provisions may apply for hiring, pay,

labor-management relations, and other employment matters. The largest

service—52 percent of the civil service in June 1996—is known as the

“competitive service,” which has its statutory basis in the personnel

provisions in title 5 of the U.S. Code. Almost all of the remaining 48

percent of federal civilian workers—nearly 1.4 million in all—are in the

“excepted service.” They are employed in agencies or other federal

organizations (such as certain government corporations) that operate

outside the appointment provisions in title 5 of the U.S. Code. Besides the

“competitive service” and the “excepted service,” the civil service includes

the “Senior Executive Service,” or SES, which in June 1996 included some

7,000 members employed in many agencies across the federal government.

Some positions in the excepted service are covered by alternative

personnel systems. One of Congress’s reasons for establishing alternative

personnel systems for some federal entities was to exempt them from the

strict rules governing the competitive service under title 5. At the

previously mentioned hearing, we said that Congress might consider

examining these alternative personnel systems for ideas about how the

competitive service could be made more flexible and results-oriented.2

With the intention of delving further into the possibility that innovative

models already exist, we took a broad, preliminary look at the excepted

service as a whole. As the chapters that follow indicate, we found that the

1

Civil Service Reform: Changing Times Demand New Approaches (GAO/T-GGD-96-31, Oct. 12, 1995).

2

GAO/T-GGD-96-31, pp. 5-6.

Page 1 GAO/GGD-97-72 The Excepted Service
Preface

excepted service is not really a coherent “service” so much as a residual

category covering all the many federal entities and groups of employees

that are not part of the competitive service or the SES. Based on available

data, this study portrays the distribution of excepted service employees

across government, but with some significant omissions—primarily the

intelligence agencies, for which official data were not readily available.

(See chapter 1.) We found over 100 agencies employing excepted service

employees in June 1996. These agencies ranged in size from the U.S. Postal

Service, with more than 850,000 employees, to small agencies such as the

Commission on Immigration Reform, with 14.

We also identified a number of methodological difficulties in examining

the excepted service systematically and in greater detail. These constitute

real stumbling blocks to exploring the excepted service for models or

lessons applicable to civil service reform. They could make a wide-ranging

study of the excepted service a demanding one, in both time and

resources.

In preparing this study, our overarching objective was to provide an

introduction to the excepted service and to identify issues that researchers

would need to consider when planning future studies of it. Specifically,

our objectives were to describe (1) the distribution of excepted service

employees across government organizations; (2) the composition of the

excepted service in terms of the various legal bases under which

employees were appointed; (3) policy concerns and study focuses that

have guided some prior studies; and (4) the coverage of agencies and

employees, as well as data elements, in two data sources that were useful

for studying the excepted service. Additionally, we sought to identify

research issues and methodological difficulties associated with each of

these objectives.

Background As defined in section 2103 of title 5, the excepted service is a residual

category of the civil service—that is, it comprises those civil service

positions that are not in the competitive service or the SES. The Office of

Personnel Management (OPM) has described the competitive service as

including positions subject to the appointment provisions in chapter 33 of

title 5; the excepted service includes all other positions (excluding those in

the SES), regardless of whether they are subject to other chapters of title 5.

For excepted service positions, each agency develops, within basic

requirements prescribed by law or regulation, its own hiring system, which

establishes the evaluation criteria to be used in filling these excepted

Page 2 GAO/GGD-97-72 The Excepted Service
Preface

positions. Exceptions may be granted for agencies (such as the Tennessee

Valley Authority (TVA) and the Federal Bureau of Investigation (FBI)) or for

specific positions (such as Foreign Service employees and certain medical

care personnel in the Department of Veterans Affairs (VA)).3

Although exception from the appointment provisions of title 5 is the

minimum requirement for being considered part of the excepted service,

excepted service entities may be excepted from other personnel

provisions of title 5 as well, such as those covering position classification,

pay, leave, and retirement. Because the circumstances and rationales

under which these exceptions were granted or retained have varied, the

component entities and employment systems in the excepted service are

not uniformly excepted from the many personnel provisions of title 5. Nor

are they subject to any single alternative set of laws, rules, and regulations,

or to uniform oversight by OPM.

Originally, all federal employees were appointed noncompetitively, and a

widespread practice arose that based hiring on political

considerations—the so-called “spoils system.” But with the establishment

of the competitive service in 1883, some—initially very few—civil servants

came under the competitive service, for which positions were filled

competitively, while others—the vast majority—were “excepted.” Over

time, both the competitive and excepted services evolved significantly,

with the excepted service’s component agencies and employment systems

generally gaining or retaining their exceptions on an individual basis

rather than a systematic one. The Foreign Service, for example, traces its

exceptions back to the Constitution and to laws made in the 19th century,

while the Federal Aviation Administration (FAA) received its general

exception in 1995.

The rationale for exceptions has varied from one situation to the next.4

For example, TVA received its exception on the basis that the agency ought

to be run like a business. The intelligence agencies (that is, the Central

Intelligence Agency (CIA), the Defense Intelligence Agency (DIA), and the

3

Exceptions are authorized (1) under statute (for example, for TVA and FBI) and, pursuant to statute,

(2) under regulations issued by OPM (such as for certain positions held by attorneys, research

associates, or political appointees), and (3) by Executive Order (such as for foreign nationals

employed overseas and certain presidential appointees).

4

We located only one general study of the excepted service done by the federal government that

sought to identify the reasons for continuing agency exceptions. That study was done by the Civil

Service Commission at the request of the Senate Committee on Post Office and Civil Service, and

resulted in the 1973 report, Statutory Exceptions to the Competitive Service. The study’s coverage was

not exhaustive of all exceptions; however, the study included about 40 agencies, and the Commission

believed that the study covered all significant statutory exceptions from the competitive service.

Page 3 GAO/GGD-97-72 The Excepted Service
Preface

National Security Agency (NSA)) received their exceptions on national

security grounds. Doctors and nurses at VA were excepted under the

rationale that the job market for these professionals was highly

competitive.

The many exceptions have led to a range of variances from competitive

service practices. For example, the CIA internal regulations for adverse

actions are similar to the procedures of other federal agencies in providing

employees with some protections, at least in cases of the removal of an

employee. However, these protections are not guaranteed because CIA

regulations provide the director with carte blanche authority to remove an

employee. Also, in contrast to the right of most federal employees under

title 5 provisions, CIA employees have no general right to appeal adverse

actions to the Merit Systems Protection Board (MSPB).5

The Relevance of the

Excepted Service to

Civil Service Reform

While federal entities and groups of federal employees have gained or

retained exceptions from the competitive service based on a variety of

rationales, the assumption common to many of these exceptions seems to

have been that exception from competitive service rules would help

agencies do their jobs.6

 A similar line of reasoning is commonly heard

today in discussions concerning the best way to ensure the successful

implementation of GPRA and, more broadly, to advance the idea of

results-oriented government.

Part of this debate is over whether, with the goal of enhancing productivity

and mission accomplishment, federal entities now governed by the

competitive service rules should be allowed further flexibility in

fashioning their HRM approaches, or even granted more widespread

exceptions from the competitive service requirements. For example, the

National Performance Review criticized competitive service rules as being

too restrictive, and proposed granting agencies more flexibility in

administering personnel systems that support their missions. This sort of

criticism of the competitive service is not uncommon, even though many

of the restrictions imposed on the competitive service have been loosened

over the past 2 decades. Beginning with the Civil Service Reform Act of

5

Intelligence Agencies: Personnel Practices at CIA, NSA, and DIA Compared With Those of Other

Agencies (GAO/NSIAD-96-6, March 11, 1996), especially pp. 4, 31-33. This study was limited to

examining equal employment opportunity and adverse action practices.

6

However, the reasons for some exceptions may be based in practicality (such as it being impractical

to examine, or impractical to hold competitive examinations, for certain government positions), or

other national goals (such as those reflected in veterans readjustment appointments, which are

noncompetitive appointments for certain veterans).

Page 4 GAO/GGD-97-72 The Excepted Service
Preface

1978 (CSRA), repeated efforts have been made to create a competitive

service that would allow individual agencies greater flexibility in shaping

their own HRM practices. Nonetheless, what is sometimes heard today is a

call for escaping the confines of title 5 entirely. FAA, for example, was

granted a broad statutory exception in 1995 to develop its own HRM

system. The administration, in its proposal to create nine

performance-based organizations (PBO), would give these organizations

considerable personnel authority outside competitive service rules.

Because excepted service entities are, to one extent or another, already

outside title 5, we thought that comparing their existing employment

systems and HRM practices with the competitive service could shed light on

the current debate. A key question, however, for anyone who attempted so

wide-ranging an examination of the excepted service would be the scope

of the task at hand. We found, for example, that the heading “excepted

service” covers positions in 123 organizations, and many more

suborganizations. Further, we located relatively little recent research on

which to base secondhand descriptions and analysis of the various

personnel systems in the excepted service. Finally, we identified a variety

of methodological difficulties that would need to be addressed if the

excepted service were to be studied in depth.

Challenges to Future

Studies of the

Excepted Service

Although studying the excepted service in depth might be worthwhile for

identifying innovative models for civil service reform, doing so could be a

substantial challenge. We found that issues range from the apparent lack

of a central source of information on the excepted service personnel

systems, to the variations among excepted entities in the extent to which

they are excepted, to how little officials at excepted service entities might

understand of the differences between their systems and those of the

competitive service, to the limitations on the basic statistical data now

available.

Information on the excepted service entities’ personnel systems is

apparently not collected in a single place; therefore, determining any

trends or widespread practices in the excepted service would seem to

necessitate original research, including extensive data gathering in many

locations. Surveying the components of the excepted service could be

difficult because not all of them exist as discrete organizations. (See

chapter 2.) Some excepted entities are defined by agency—for example,

TVA. But other exceptions may exist for classes of employees defined by a

particular “appointing authority.” Federal workers employed under a

Page 5 GAO/GGD-97-72 The Excepted Service
Preface

single appointing authority do not necessarily work for a single federal

entity. We found that Foreign Service employees, for example, worked for

the Departments of State, Agriculture, and Commerce; the Agency for

International Development; and the Peace Corps. Similarly, we found that

the 2,156 workers employed under the Panama Canal Employment Service

appointing authority were spread over 32 separate organizations, from the

Panama Canal Commission (648 employees) to the Defense Mapping

Agency (1 employee). (See chapter 2.)

Another complexity in studying the excepted service arises from the

varying exceptions from title 5 that apply to excepted entities. FAA, for

example, is broadly excepted from title 5, in part to provide greater

flexibility in compensation. But the FBI, although its positions are excepted

from the competitive service, is still subject to the pay provisions of title 5.

We did not find a recent comprehensive example of anyone having

identified the statutory exceptions for all the excepted entities, proceeding

through title 5 by chapter, subchapter, and section.7

 Nor did we find recent

broad studies on whether the many excepted entities have pursued

different HRM approaches than they would have had they not been

excepted.

Moreover, as suggested by findings from some previous studies, surveying

officials of the excepted service entities directly to determine the

differences between their HRM approaches and those of the competitive

service might have limited value because these officials might not be

familiar with the details of the title 5 requirements that do not apply to

them. Therefore, they might not be able to accurately describe how their

practices differ from those of the competitive service. (See chapter 3.)

Finally, merely drawing some statistical portraits of the excepted service

might pose difficulties. The two sources of statistical data available from

OPM both have advantages and disadvantages as sources of information on

the excepted service. (See chapter 4.)

These and other methodological difficulties are discussed in the chapters

that follow. These discussions are not intended to discourage further

inquiry into the excepted service, but merely to point out some of the

potential challenges such an inquiry would encounter. Some of the factors

that would create these challenges are the same ones that would make an

examination of the excepted service so promising—the sheer variety of

7

The study we identified that comes closest is partial and somewhat dated. See “Comparison of

Selected Features of Competitive and Excepted Services,” Appendix XI of Personnel Management

Project, Volume 3, December 1977. The Personnel Management Project is discussed in chapter 3.

Page 6 GAO/GGD-97-72 The Excepted Service
Preface

exceptions, for example, and the likely variety of resulting personnel

systems and practices. It is possible that approaches that would be new to

the competitive service already have a “track record” in the excepted

service, and that wider knowledge of some of these approaches would

inform the debate on civil service reform in a results-oriented

environment.

To mitigate some of the difficulties of researching the excepted service,

researchers might want to narrow the potential scope of their studies from

the entire excepted service to the personnel systems of specific excepted

service entities, as one agency has done on two occasions. (See chapter 3).

Remembering that most excepted service employees are located in a

relatively few government organizations (see chapter 1), this may be an

approach worth considering.

Major contributors to this study are identified in appendix II.

L. Nye Stevens

Director, Federal Management

 and Workforce Issues

Page 7 GAO/GGD-97-72 The Excepted Service
Contents

Preface 1

Chapter 1 

Organizational

Distribution of

Excepted Service

Employees

10

Prevalence in Organizations 10

The Location of Most Excepted Service Employees 12

Research Issues 21

Chapter 2 

Excepted Service

Employment by Types

of Appointing

Authority

23

Many Appointing Authorities Within a Single Agency 24

Appointing Authorities Spanning Agencies 25

Methodological Difficulties 25

Chapter 3 

Some Prior Studies of

the Excepted Service

29

Reasons for Exceptions 29

Finding Models in the Excepted Service 31

Research Issues and Methodological Difficulties 31

Chapter 4 

Two Sources of Data

on the Excepted

Service

37

Coverage of Agencies 37

Available Information 38

Methodological Difficulties 39

Appendixes Appendix I: Objectives, Scope, and Methodology 42

Appendix II: Major Contributors to This Staff Study 44

Tables Table 1.1: Federal Civilian Employment by Type of Service and

Branch of Government

11

Table 1.2: Federal Civilian Employment by Type of Service in

Parts of the Executive Branch

12

Table 1.3: Excepted Service and Senior Executive Service

Employees by Branch of Government

13

Table 1.4: Federal Civilian Employment in the Excepted and

Senior Executive Services, by Agency

14

Page 8 GAO/GGD-97-72 The Excepted Service
Contents

Table 2.1: Appointing Authorities for Excepted Service

Employees in the Veterans Health Administration

24

Table 2.2: Excepted Service Employees With Appointments

Under the Foreign Service Authority, by Agency

25

Table 2.3: Number of Excepted Service Employees With

Appointments Under the Panama Canal Employment Service

Authority

27

Table 4.1: Comparison of Coverage of Federal Civilian

Employment for Two Data Sources

38

Abbreviations

CFR Code of Federal Regulations

CIA Central Intelligence Agency

CPDF Central Personnel Data File

CSRA Civil Service Reform Act

DIA Defense Intelligence Agency

FAA Federal Aviation Administration

FBI Federal Bureau of Investigation

FEMA Federal Emergency Management Agency

FIPS Federal Information Processing Standards

FPM Federal Personnel Manual

GPRA Government Performance and Results Act

GSA General Services Administration

HRM Human resource management

MSPB Merit Systems Protection Board

NRC Nuclear Regulatory Commission

NSA National Security Agency

OPM Office of Personnel Management

OMB Office of Management and Budget

PBO Performance-based organizations

SES Senior Executive Service

TVA Tennessee Valley Authority

USC United States Code

VA Department of Veterans Affairs

VHA Veterans Health Administration

Page 9 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

The distribution of the approximately 1.4 million excepted service

employees among the three branches of government, and among federal

agencies, resists a simple description. This difficulty derives from the fact

that the excepted service encompasses workers in all branches and many

agencies, who are distributed unequally across and within branches and

agencies. The following description introduces some of that complexity,

while indicating some key generalizations that can be made about these

employees’ numbers and organizational locations. At the end of this

discussion, we briefly note some additional portraits of the excepted

service employees that could be done with the same data source.

Our description is based on OPM data from its Monthly Report of Federal

Civilian Employment (Monthly Report) for June 1996. Civil service

positions are in three services: the competitive service, the Senior

Executive Service (SES), and the excepted service. Monthly Report data do

not count SES employees separately from excepted service employees. We

will refer to these combined counts as only representing excepted service

employees. Treating the SES component of the counts as negligible is

justified because other data for most civil service employees indicated that

SES employees were less than 2 percent of the combined total.

Prevalence in

Organizations

Generalization 1: The majority of employees in the judicial and legislative

branches were in the excepted service, but this was not true for the

executive branch.

As shown in table 1.1, excepted service personnel in June 1996 made up

fewer than half of the employees in the executive branch, but they

predominated in both the judicial and legislative branches. Indeed, almost

every employee in the judicial branch was in the excepted service, as were

almost 90 percent of employees in the legislative branch.8

8

In the legislative branch, most agencies’ personnel were all in the excepted service. The major break

with this generalization was in the Government Printing Office, where almost all of the employees

were in the competitive service and accounted for most of the competitive service employees in the

legislative branch.

Page 10 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Table 1.1: Federal Civilian Employment

by Type of Service and Branch of

Government (June 1996)

Competitive service Excepted service and SES

Branch of

government

Total

number of

employees

Number of

employees

Percent of

branch

Number of

employees

Percent of

branch

Executive 2,826,659 1,503,837 53.2% 1,322,822 46.8%

Judicial 29,249 8 0.0a 29,241 100.0a

Legislative 32,715 3,895 11.9 28,820 88.1

Total 2,888,623 1,507,740 52.2% 1,380,883 47.8%

Note: Numbers include employees located in the United States and overseas. Numbers exclude

employees of the CIA, DIA, and NSA.

aPercentages equal 0.0 and 100.0 percent due to rounding.

Source: GAO analysis of OPM’s Monthly Report of Federal Civilian Employment.

Generalization 2: In the executive branch, excepted service personnel

were more prevalent in independent agencies than in executive

departments.

Table 1.2 shows that the proportions of employees who were in the

excepted service varied markedly between the parts of the executive

branch. The largest employing part of the executive branch, executive

departments, had a relatively low proportion of excepted service

positions—about one employee in four was in the excepted service. In

contrast, independent agencies, on average, predominantly employed

excepted service employees. (Their proportion of 85 percent in the

excepted service almost equaled the 88 percent of the legislative branch.)

The part of the executive branch with the fewest employees, the Executive

Office of the President, also predominantly employed excepted service

employees, but to a somewhat lesser degree.

Page 11 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Table 1.2: Federal Civilian Employment

by Type of Service in Parts of the

Executive Branch (June 1996) Competitive service Excepted service and SES Parts of the

executive

branch of

government

Total

number of

employees

Number of

employees

Percent of

the part

Number of

employees

Percent of

the part

Executive Office

of the President

1,587 630 39.7% 957 60.3%

Executive

departments

1,751,983 1,346,509 76.9 405,474 23.1

Independent

agencies

1,073,089 156,698 14.6 916,391 85.4

Total 2,826,659 1,503,837 53.2% 1,322,822 46.8%

Note: Numbers include employees located in the United States and overseas. Numbers exclude

employees of the CIA, DIA, and NSA.

Source: GAO analysis of OPM’s Monthly Report of Federal Civilian Employment; OPM.

The Location of Most

Excepted Service

Employees

Generalization 3: Most excepted service employees were located in the

executive branch, particularly among independent agencies.

Despite the fact that the proportions of excepted service employees were

higher in the legislative and judicial branches, the much larger executive

branch employed the vast majority of excepted service employees. As

shown in table 1.3, almost 96 percent of excepted service employees were

located in the executive branch. Most of these employees (constituting

about two-thirds of all excepted service employees) were spread across

the many independent agencies, ranging from large agencies, such as the

Postal Service (which had 855,579 excepted service employees),9

 to small

agencies, such as the Commission of Fine Arts (which had 1 excepted

service employee). The remaining 4 percent of all excepted service

employees were about equally split between the judicial and legislative

branches.

9

The Postal Reorganization Act of 1970 designated the Postal Service as an independent

establishment—not agency—of the executive branch. Because we refer to it and others collectively as

independent agencies, we do not maintain that distinction in the language of the text.

Page 12 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Table 1.3: Excepted Service and Senior

Executive Service Employees by

Branch of Government (June 1996)

Excepted service and SES

Branch of government

Number of

employees Percent of total

Executive 1,322,822 95.8%a

Executive Office of the President 957 0.1

Executive departments 405,474 29.4

Independent agencies 916,391 66.4

Judicial 29,241 2.1

Legislative 28,820 2.1

Total 1,380,883 100.0%

Note: Numbers include employees located in the United States and overseas. Numbers exclude

employees of the CIA, DIA, and NSA.

aThe sum of the subtotal percentages does not precisely equal this percentage due to rounding

error.

Source: GAO analysis of OPM’s Monthly Report of Federal Civilian Employment.

Generalization 4: Most excepted service employees were located in a

relatively few government organizations.

Although table 1.4 lists 123 government organizations that had at least 1

excepted service employee, most excepted service employees were

located in a few large organizations.10 A single agency, the U.S. Postal

Service, employed 62 percent of such employees. The eight largest

employers of excepted service workers employed over 90 percent of these

employees. The first 32 organizations listed in table 1.4—those that had

1,000 or more such employees—employed over 99 percent of all excepted

service employees. The remaining 91 organizations (of which 65 employed

fewer than 100 excepted service employees) accounted for the locations of

the remaining 1 percent of excepted service employees.

10Many of these organizations consist of suborganizations, such as departments, services, bureaus, and

administrations. Excepted service employment was more concentrated in some of these

suborganizations than in others. The headings shown in the table are the first-level headings published

by OPM in its Employment and Trends reports.

Page 13 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Table 1.4: Federal Civilian Employment

in the Excepted and Senior Executive

Services, by Agency (June 1996)

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

1 U.S. Postal Service 855,579 62.0% 62.0%

2 Defense, Military

Function (includes

military

departments;

Military Function

primarily excludes

the Army Corps of

Engineers)

124,761 9.0 71.0

3 Department of

Veterans Affairs

112,800 8.2 79.2

4 Department of

Transportation

47,916 3.5 82.6

5 Department of

Justice

43,059 3.1 85.8

6 U.S. Courts

(excludes the

Supreme Court)

28,857 2.1 87.8

7 Department of State 19,646 1.4 89.3

8 Congress 17,964 1.3 90.6

9 Tennessee Valley

Authority

16,390 1.2 91.8

10 Department of

Health and Human

Services

13,491 1.0 92.7

11 Department of the

Interior

10,840 0.8 93.5

12 Department of

Agriculture

10,460 0.8 94.3

13 Panama Canal

Commission

9,152 0.7 94.9

14 Department of the

Treasury

8,652 0.6 95.6

15 Department of

Commerce

6,814 0.5 96.1

16 Library of Congress 4,580 0.3 96.4

17 U.S. Information

Agency

4,221 0.3 96.7

18 Social Security

Administration

3,813 0.3 97.0

19 General Accounting

Office

3,623 0.3 97.2

(continued)

Page 14 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

20 Defense, Civilian

Function (primarily

includes the Army

Corps of Engineers)

3,389 0.2% 97.5%

21 Nuclear Regulatory

Commission

3,187 0.2 97.7

22 Federal Emergency

Management

Agency

2,884 0.2 97.9

23 Federal Deposit

Insurance

Corporation

2,313 0.2 98.1

24 U.S. International

Development

Cooperation Agency

2,152 0.2 98.2

25 Architect of the

Capitol

1,984 0.1 98.4

26 Board of Governors,

Federal Reserve

System

1,744 0.1 98.5

27 Environmental

Protection Agency

1,728 0.1 98.6

28 Department of

Energy

1,456 0.1 98.7

29 National Aeronautics

and Space

Administration

1,335 0.1 98.8

30 Securities and

Exchange

Commission

1,168 0.1 98.9

31 Peace Corps 1,125 0.1 99.0

32 Small Business

Administration

1,019 0.1 99.1

33 Executive Office of

the President

957 0.1 99.1

34 Office of Personnel

Management

830 0.1 99.2

35 Department of

Housing and Urban

Development

791 0.1 99.3

36 National Labor

Relations Board

752 0.1 99.3

37 National Archives

and Records

Administration

726 0.1 99.4

(continued)

Page 15 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

38 Department of

Education

701 0.1% 99.4%

39 Department of Labor 698 0.1 99.5

40 General Services

Administration

693 0.1 99.5

41 Equal Employment

Opportunity

Commission

547 0.0 99.6

42 Federal

Communications

Commission

543 0.0 99.6

43 Federal Trade

Commission

530 0.0 99.6

44 National Science

Foundation

479 0.0 99.7

45 Smithsonian

(includes the

National Gallery of

Art, Smithsonian

Institution, Woodrow

Wilson Center, and

JFK Center for the

Performing Arts)

463 0.0 99.7

46 Supreme Court 384 0.0 99.7

47 American Battle

Monuments

Commission

325 0.0 99.8

48 Federal Election

Commission

303 0.0 99.8

49 Corporation for

National and

Community Service

284 0.0 99.8

50 Congressional

Budget Office

243 0.0 99.8

51 Commodity Futures

Trading Commission

209 0.0 99.8

52 Federal Mediation

and Conciliation

Service

204 0.0 99.8

53 U.S. Tax Court 153 0.0 99.9

54 Armed Forces

Retirement Home

136 0.0 99.9

55 Merit Systems

Protection Board

135 0.0 99.9

(continued)

Page 16 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

56 Federal Labor

Relations Authority

114 0.0% 99.9%

57 Pension Benefit

Guaranty

Corporation

112 0.0 99.9

58 National Foundation

on the Arts and the

Humanities

102 0.0 99.9

59 International Trade

Commission

86 0.0 99.9

60 Defense Nuclear

Facilities Safety

Board

78 0.0 99.9

61 U.S. Court of

Veterans Appeals

76 0.0 99.9

62 National

Transportation

Safety Board

69 0.0 99.9

63 Government Printing

Office

62 0.0 99.9

64 Consumer Product

Safety Commission

58 0.0 99.9

65 U.S. Institute of

Peace

56 0.0 99.9

66 Export-Import Bank

of the U.S.

52 0.0 99.9

67 Arms Control and

Disarmament

Agency

52 0.0 99.9

68 Holocaust Memorial

Council

51 0.0 99.9

69 Botanic Garden 49 0.0 100.0

70 Postal Rate

Commission

49 0.0 100.0

71 Federal Maritime

Commission

35 0.0 100.0

72 Office of Special

Counsel

34 0.0 100.0

73 Advisory Council on

Historical

Preservation

34 0.0 100.0

74 Federal Housing

Finance Board

34 0.0 100.0

(continued)

Page 17 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

75 National Credit

Union Administration

33 0.0% 100.0%

76 Commission on Civil

Rights

30 0.0 100.0

77 Selective Service

System

28 0.0 100.0

78 Occupational Safety

and Health Review

Commission

26 0.0 100.0

79 U.S. Enrichment

Corporation

25 0.0 100.0

80 Assassinations

Records Review

Board

23 0.0 100.0

81 Federal Mine Safety

and Health Review

Commission

23 0.0 100.0

82 Railroad Retirement

Board

21 0.0 100.0

83 Office of

Government Ethics

21 0.0 100.0

84 Farm Credit

Administration

21 0.0 100.0

85 Federal Retirement

Thrift Investment

Board

21 0.0 100.0

86 Physician Payment

Review Commission

18 0.0 100.0

87 Office of Compliance 17 0.0 100.0

88 International

Boundary and Water

Commission (U.S.

and Mexico)

16 0.0 100.0

89 Prospective

Payment

Assessment

Commission

15 0.0 100.0

90 Commission on

Immigration Reform

14 0.0 100.0

91 National Capital

Planning

Commission

13 0.0 100.0

92 National Mediation

Board

13 0.0 100.0

(continued)

Page 18 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

93 Advisory

Commission on

Intergovernmental

Relations

11 0.0% 100.0%

94 Nuclear Waste

Technical Review

Board

11 0.0 100.0

95 Commission on

Protecting and

Reducing

Government Secrecy

8 0.0 100.0

96 Inter-American

Foundation

7 0.0 100.0

97 National

Commission on

Libraries and

Information Science

7 0.0 100.0

98 James Madison

Memorial

Scholarship

Foundation

7 0.0 100.0

99 International

Boundary

Commission (U.S.

and Canada)

7 0.0 100.0

100 Competitiveness

Policy Council

6 0.0 100.0

101 John C. Stennis

Center for Public

Service Training and

Development

5 0.0 100.0

102 International Joint

Commission (U.S.

and Canada)

4 0.0 100.0

103 Architectural and

Transportation

Barriers Compliance

Board

4 0.0 100.0

104 National Education

Goals Panel

3 0.0 100.0

105 National Council on

Disability

3 0.0 100.0

106 African

Development

Foundation

3 0.0 100.0

(continued)

Page 19 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

107 National Bankruptcy

Review Commission

3 0.0% 100.0%

108 Appalachian

Regional

Commission

3 0.0 100.0

109 Harry S. Truman

Scholarship

Foundation

2 0.0 100.0

110 Office of Navajo and

Hopi Indian

Relocation

2 0.0 100.0

111 Marine Mammal

Commission

2 0.0 100.0

112 Arctic Research

Commission

2 0.0 100.0

113 Morris K. Udall

Scholarship and

Excellence in

National

Environmental Policy

Foundation

2 0.0 100.0

114 Committee for

Purchase from

People Who Are

Blind or Severely

Disabled

2 0.0 100.0

115 Barry Goldwater

Scholarship and

Excellence in

Education

Foundation

2 0.0 100.0

116 Martin Luther King,

Jr. Federal Holiday

Commission

1 0.0 100.0

117 Farm Credit System

Insurance

Corporation

1 0.0 100.0

118 Federal Financial

Institutions

Examination Council

1 0.0 100.0

119 Japan-U.S.

Friendship

Commission

1 0.0 100.0

120 Delaware River

Basin Commission

1 0.0 100.0

(continued)

Page 20 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Excepted service and SES

Organization

Number of

employees

Percent of

all

Cumulative

percent

121 Susquehanna River

Basin Commission

1 0.0% 100.0%

122 Columbus

Fellowship

Foundation

1 0.0 100.0

123 Commission of Fine

Arts

1 0.0 100.0

Total 1,380,883 100.0% 100.0%

Note 1: Numbers include employees located in the United States and overseas. Numbers

exclude employees of the CIA, DIA, and NSA.

Note 2: The “cumulative percent” will not always precisely equal the sum of all the relevant

“percent of all” numbers due to rounding error. Numbers of employees that do not round up to

0.1 percent will show no impact on the percentages in the table.

Source: GAO analysis of OPM’s Monthly Report of Federal Civilian Employment.

Research Issues Since the excepted service is not a static entity, research interest may

focus on the changing numbers and locations of excepted service

employees. Change can occur for a variety of reasons. For instance, some

agencies (for example, the Pennsylvania Avenue Development

Corporation in 1996) may cease to exist; some (for example, the Office of

Compliance in 1995) may come into being; and yet others (for instance,

the Federal Aviation Administration, effective in 1996) may be newly

excepted. Through OPM’s Employment and Trends reports, which routinely

provide tables based on Monthly Report data, these changes can be traced.

Some data on the early history and growth of the competitive service can

be found in the U.S. Civil Service Commission’s History of the Federal

Civil Service: 1789 to the Present (1941).

For some research purposes, it may be important to separate

nonpermanent (temporary or indefinite) employees from permanent

employees. The Monthly Report data allow for this separation. Agencies

can vary greatly in their mix of permanent and nonpermanent

appointments among excepted service employees. For example, according

to the June 1996 data, 3 percent of the excepted service appointments in

the Nuclear Regulatory Commission were nonpermanent appointments;

the corresponding figure was 89 percent in the Federal Emergency

Page 21 GAO/GGD-97-72 The Excepted Service
Chapter 1 

Organizational Distribution of Excepted

Service Employees

Management Agency. (The average for all agencies with excepted service

employees was 19 percent.)

Page 22 GAO/GGD-97-72 The Excepted Service
Chapter 2 

Excepted Service Employment by Types of

Appointing Authority

In chapter 1, we described the distribution of excepted service employees

among federal branches and agencies. Another way to portray the

distribution of excepted service employees is according to the many legal

bases under which excepted service employees are appointed to their

jobs.

The 1977 staff report for the President’s Personnel Management Project

characterized the complexities of the excepted service as “a tangled,

confusing web of laws, regulations, authorities, and exceptions.”11

Exceptions may be granted for entire agencies (for example, the

Tennessee Valley Authority or the Postal Service); parts of departments

(for example, the Federal Bureau of Investigation within the Department

of Justice); or specific positions (for example, Foreign Service positions in

various agencies). In some instances, the exception applies to all

personnel provisions of the competitive service; in other instances, the

exception applies only to some provisions. Moreover, the legal basis of the

exception may be by statute, or pursuant to statute through a regulation or

an executive order.12

The purpose of this chapter is to examine some of the patterns and

complexities of the excepted service that are associated with appointing

authorities. The illustrations are based on OPM’s Central Personnel Data

File (CPDF) data on appointing authorities for June 1996.13 First, we

illustrate that a single agency may include excepted service employees

appointed under various authorities. Second, we discuss how a single

appointing authority may be used to appoint excepted service employees

in various agencies. Finally, we note some methodological difficulties

arising out of the limitations of the CPDF data and the complexities of

appointing authorities.

11The President’s Reorganization Project: Personnel Management Project: Final Staff Report, Volume 1,

December 1977, p. 42.

12Under 5 U.S.C. 3302, the president is authorized to prescribe rules governing the competitive service,

including authority to provide for necessary exceptions from competitive service. The president has

delegated to OPM the authority to promulgate regulations implementing this provision.

13According to the technical definition used by CPDF, “current appointment authority” refers to the

law, executive order, rule, regulation, or other basis that authorizes an employee’s most recent

conversion or accession action.

CPDF data are not directly comparable to the Monthly Report data, which were used in chapter 1 to

describe the distribution of excepted service employees. Among other differences between the two

data sources, which are detailed in chapter 4, the CPDF has less comprehensive coverage of agencies

than the Monthly Report. However, of the two data sources, only the CPDF includes appointing

authority data.

Page 23 GAO/GGD-97-72 The Excepted Service
Chapter 2 

Excepted Service Employment by Types of

Appointing Authority

Many Appointing

Authorities Within a

Single Agency

Beyond excepted service employees possibly working side by side with

competitive service employees in an agency, excepted service employees

appointed under many different authorities may work in the same agency.

As shown in table 2.1, as of June 1996, excepted service employees in the

Veterans Health Administration (VHA) within VA were appointed under a

variety of authorities. They were predominantly appointed under the

authority of the VA Medical Personnel system, which is codified in title 38

of the U.S. Code. However, VHA also employed other excepted service

employees under Schedules A, B, or C.14 VHA also had two presidential

appointees. About 6,200 other employees had been appointed through

another OPM regulation (5 CFR 307.103), which provides for the excepted

service appointment of eligible veterans. A few others were appointed

under other miscellaneous authorities. (As indicated by the authority

categories of “missing codes” and “other citation,” this data source did not

identify the appointing authority of over 21,000 excepted service

employees in VHA.)

Table 2.1: Appointing Authorities for

Excepted Service Employees in the

Veterans Health Administration

(June 1996)

Appointing authority Number of employees

VA medical personnel (38 U.S.C.) 80,024

Schedule A 1,786

Schedule B 1,070

Schedule C 4

Presidential 2

Veterans’ readjustment 6,208

Miscellaneous authoritiesa 23

“Other citation”b 21,095

No information (missing codes) 586

Total 110,798

aThis category includes appointments under additional authorities, such as those governing

restored employment.

bIn the data, some appointing authorities are no more specifically defined than “other citation.”

Source: GAO analysis of OPM’s Central Personnel Data File.

14Appointments under Schedule A are for positions, such as attorneys and chaplains, for which it is

impracticable to examine. Schedule B covers positions for which it is impracticable to hold an open

competition or to apply usual competitive examining procedures—for example, students in

cooperative education programs. Appointments under Schedule C are for positions of a confidential or

policy-determining nature, or which involve a close and confidential working relationship with the

agency head or other key appointed officials; these positions include the majority of political

appointees below cabinet and subcabinet levels. As described in part 213 of title 5 of the Code of

Federal Regulations (5 CFR 213), OPM authorizes agencies to make appointments under these

schedules.

Page 24 GAO/GGD-97-72 The Excepted Service
Chapter 2 

Excepted Service Employment by Types of

Appointing Authority

Appointing

Authorities Spanning

Agencies

Appointing authorities may span agencies. An example is provided in table

2.2, which portrays the distribution of excepted service employees

appointed under the authority of the Foreign Service statutory provisions,

which are codified under title 22 of the U.S. Code. Although most of these

employees were located in the Department of State and the Agency for

International Development, this appointing authority was used in seven

organizations.

Table 2.2: Excepted Service

Employees With Appointments Under

the Foreign Service Authority, by

Agency (June 1996)

Number of excepted service employees

appointed

Organization

Under Foreign

Service authority

Under other

authorities

Department of State 9,223 678

Agency for International Development 1,399 195

Department of Commerce: International

Trade Administration

218 105

Department of Agriculture: Foreign

Agricultural Service

189 128

Department of Agriculture: Animal and Plant

Health Inspection Service

67 2,045

Department of Commerce: unknown

suborganization

9 0

Peace Corps 1 879

Total 11,106 4,030

Source: GAO analysis of OPM’s Central Personnel Data File.

Methodological

Difficulties

The complexity of the excepted service raises various methodological

difficulties. One is the difficulty of designing questionnaires or interviews

that will successfully elicit information on various categories of excepted

service employees. For example, excepted service employees in a single

agency may be employed under different appointing authorities and may,

therefore, be under differing sets of exceptions. Thus, a survey directed to

their agency would either have to specify the categories of excepted

service employees to which the various questions applied or allow the

respondents to designate the categories of employees for which their

answers applied.

Another methodological difficulty concerns identifying the entities for

research, since excepted service entities can be either individually

excepted agencies or appointing authorities under which workers are

Page 25 GAO/GGD-97-72 The Excepted Service
Chapter 2 

Excepted Service Employment by Types of

Appointing Authority

employed in several, or even many, agencies. A related issue is that of

deciding the level of organization, and the number of entities within an

agency or appointing authority, from which data should be gathered. If, for

example, one were researching the Panama Canal Employment Service

appointing authority, one could choose to gather data from as many as 32

entities employing workers under its auspices. (See table 2.3.) The

decision on how many entities to study in order to get adequate coverage

of the Panama Canal Employment Service appointing authority might be a

difficult one because significant variations in personnel systems among

the entities might be unknown before surveying them, while trying to

identify and contact respondents at every site might be difficult.

Page 26 GAO/GGD-97-72 The Excepted Service
Chapter 2 

Excepted Service Employment by Types of

Appointing Authority

Table 2.3: Number of Excepted Service

Employees With Appointments Under

the Panama Canal Employment

Service Authority (June 1996)

Agency/ suborganization Number of employees

Panama Canal Commission 648

Army—U.S. Army Southern Command 502

Air Force—Air Combat Command 291

Army—U.S. Army Information Systems Command 170

Army—U.S. Army Medical Command 141

Army—Joint Activities 118

Navy—Atlantic Fleet 83

Department of Defense—Dependents Schools 75

Air Force—Air Mobility Command 31

Department of Defense—Defense Commissary Agency 20

Army—U.S. Army Armament, Munitions and Chemical

Command

17

Army—Field Operating Office of Office of Secretary of Army 8

GSA—Federal Supply Service 7

Army—U.S. Army Forces Command 6

Army—Military Traffic Management Command 5

Department of Defense—Defense Logistics Agency 4

Army—U.S. Army Aviation Systems Command 4

Army—Materiel Readiness Activities 4

Navy—Naval Facilities Engineering Command 3

Army—U.S. Army Corps of Engineers 3

Navy—Naval Medical Command 2

Navy—Naval Education and Training Command 2

Air Force—Office of Special Investigations 2

Army—U.S. Army Test and Evaluation Command 2

Army—U.S. Special Operations Command (Army) 1

Navy—Naval Security Group Command 1

Army—U.S. Army Criminal Investigation Command 1

Department of Defense—Defense Mapping Agency 1

Army—U.S. Army Tank Automotive Command 1

Army—U.S. Army Communications Electronics Command 1

Army—U.S. Army Intelligence and Security Command 1

Army—Field Operations Agencies of the Army Staff

resourced through OA-22

1

Total 2,156

Note: Numbers exclude foreign nationals employed overseas. Numbers exclude employees of

the CIA, DIA, and NSA.

Source: GAO analysis of OPM’s Central Personnel Data File.

Page 27 GAO/GGD-97-72 The Excepted Service
Chapter 2 

Excepted Service Employment by Types of

Appointing Authority

Another methodological difficulty involves the CPDF. Our analysis above

shows the usefulness of the CPDF data for tracing appointing authorities

within and among agencies. Nevertheless, the CPDF has some important

methodological limitations when used for this purpose. In particular, it

cannot be used for comprehensive descriptions of the excepted service

because it excludes some important excepted service agencies (for

instance, the Postal Service, the CIA, NSA, and DIA) and foreign nationals

working overseas. Further, CPDF information for a significant number of

employees did not identify a specific appointing authority. For example,

the authority for all of the excepted service employees in the FBI was only

identified as “other citation.” (Additional information about the CPDF as a

data source can be found in chapter 4.)

Page 28 GAO/GGD-97-72 The Excepted Service
Chapter 3 

Some Prior Studies of the Excepted Service

Past policy concerns about the excepted service have led to different

study focuses. One policy concern about the lack of unity resulting from

the number of alternative personnel systems within the civil service led to

studies of the validity of reasons for continuing agencies’ exceptions to the

competitive service. For example, why did one agency need policies

different from those found in the competitive service to fill a clerk’s job?

Another concern focused on the criticisms of the competitive service’s

laws and regulations. This led to examinations of whether the various

personnel systems in the excepted service offered beneficial models for

reforming the competitive service.

In this chapter, we examine some prior reviews and studies that discussed

these policy concerns. We also discuss some methodological difficulties

that were revealed by the studies.

Reasons for

Exceptions

At the request of the Senate Committee on Post Office and Civil Service,

the Civil Service Commission produced a 1973 report, Statutory

Exceptions to the Competitive Service. A central question at that time

concerned the circumstances requiring agencies to have different

personnel policies. The Commission addressed this question by asking 44

agencies to offer reasons that would justify the continuation of their

exceptions. The study concentrated on exceptions from appointment

provisions rather than on possible exceptions from the many other areas

of human resource management covered by title 5.

This study revealed diverse reasons used to justify exceptions. Reasons

included the need to work in a business-like fashion (TVA, Postal Service,

and Veterans Canteen Service); the need to maintain secrecy about

personnel matters for national security reasons (intelligence agencies); the

need to serve several—federal, state, and military—masters concurrently

(National Guard civilians); special needs in staffing overseas positions

(Department of State); special needs in recruiting and paying medical

personnel (VA); and the need for separate treatment of government

branches (Library of Congress). The Commission concluded that a

common theme throughout the various justifications was an emphasis on

the flexibility provided by being excepted from the competitive service.

The Commission also reported its own technical opinion on the

desirability of continuing each exception. It generally found the

justifications lacking, concluding that many of the historical reasons for

the statutory exceptions had ceased to exist. It expressed concern “over

Page 29 GAO/GGD-97-72 The Excepted Service
Chapter 3 

Some Prior Studies of the Excepted Service

the agencies’ apparent inability to articulate specific reasons for

continuing the statutory exceptions.”15 In its view, the inflexibilities of the

competitive service perceived by the agencies were not numerous or of

overwhelming significance, and the competitive service could be adapted

to include some flexibility features found in the excepted service. The

Commission also expressed its general preference for further modification

of the competitive service rather than for the exception of agencies or

segments of agencies from the competitive service.

Similar to the Civil Service Commission’s earlier report, the 1977 final staff

report, Personnel Management Project (done as part of the President’s

Reorganization Project), characterized the excepted service in a way that

generally questioned the reason for continuing exceptions. It stated that

most agencies with exceptions operated smaller merit systems with

features that paralleled or were comparable to the key merit requirements

of the competitive service. To paraphrase the question asked in the report:

If the competitive service could be reformed to provide greater policy

diversity and procedural flexibility, and the circumstances that supported

creating the exceptions had already greatly changed, what would be the

remaining logic for the excepted service?16

The staff report differed from the earlier Commission report in that it did

not try to catalog agencies’ reasons for exceptions; rather, it recommended

creating a framework to end the exceptions that could not be justified.

(The Commission had differentiated its technical opinions from

recommendations for legislative action, which would have had to take into

account other factors, such as disruptions of functioning personnel

systems and administrative and legislative convenience.) The staff report

proposed the establishment of criteria by which to evaluate the need to

continue to except certain agencies and alternative personnel systems

from the competitive service. Under the proposal, agencies with

alternative systems would have been required to present justifications,

based on these criteria, to the president for his decision on whether to

continue their excepted status or recommend to Congress legislation to

change that status.

15U.S. Civil Service Commission, Statutory Exceptions to the Competitive Service, September 1973, p.

323.

16The President’s Reorganization Project: Personnel Management Project: Final Staff Report, Volume 1,

December 1977, pp. 42-43.

Page 30 GAO/GGD-97-72 The Excepted Service
Chapter 3 

Some Prior Studies of the Excepted Service

Finding Models in the

Excepted Service

Other studies have had a different focus, one that sought to compare the

personnel systems of individual excepted service entities with the systems

created under title 5. These studies were based on the premise that

particular alternative personnel systems included in the excepted service

might provide models for rules, methods, or practices that could be

beneficially adopted in the competitive service. The Merit Systems

Protection Board (MSPB) has done two case studies based on this

premise—one on health care occupations within VA and one on TVA.

17 In

contrast to the Commission’s report, the MSPB studies focused on

personnel systems rather than on appointments and tenure, and MSPB

considered personnel improvements without raising the possibility of

ending exceptions.

MSPB’s study focus and policy concerns are illustrated by its report on TVA.

On the one hand, MSPB noted that TVA had certain policies, such as granting

union preference for certain hiring, that appeared to conflict with merit

principles. It recommended that TVA change these policies. On the other

hand, MSPB suggested that TVA’s managerial discretion and ability to make

rapid and significant changes in human resource management helped it to

meet new or changing organizational demands. Here, MSPB recommended

that Congress, OPM, and individual agencies consider TVA’s policies and

practices as they seek to improve relevant personnel laws, policies, and

practices.

Research Issues and

Methodological

Difficulties

These previous studies implicitly or explicitly raise many research issues

and methodological difficulties. These include how to judge the validity of

reasons for exceptions, to measure the impact of a personnel practice on

an agency’s mission, and to determine whether successful features of a

personnel system in one agency might be beneficially transferred to

another agency.

Three other relevant issues are discussed below. These concern how to

establish reasons for exceptions, determine the reliability of agency

responses about flexibility, and describe and compare personnel systems.

For each of these issues, prior studies illustrate some important

methodological difficulties.

17MSPB published its studies as The Title 38 Personnel System in the Department of Veterans Affairs:

An Alternative Approach (1991) and The Tennessee Valley Authority and the Merit Principles (1989).

Page 31 GAO/GGD-97-72 The Excepted Service
Chapter 3 

Some Prior Studies of the Excepted Service

Establishing the Reasons

for Exceptions

Establishing the reasons for exceptions poses certain methodological

difficulties for gathering adequate information. Although examining the

legislative history might be helpful in determining the original reasons for

the exceptions, there are limitations to this approach. First, the available

legislative history record may not be definitive, since, as the Civil Service

Commission noted in its 1973 report, it is reasonable to assume that

considerations may have been involved that were not fully reflected in

historical records. Second, unless the exception was created recently,

legislative histories may not be relevant for establishing the current

reasons because circumstances may have changed since the exception’s

creation.18

Another approach to establishing current reasons may be to ask agencies

to justify their exceptions. This approach requires respondents to

construct reasons, and the Commission’s 1973 study raised issues about

what constitutes an adequate response. The Commission concluded that

most agencies were unable to articulate specific reasons for continuing

their statutory exceptions. It is unclear whether this vagueness resulted

from an actual lack of adequate justification, the respondents’

misunderstanding of what constituted an adequately specific justification,

or the respondents’ lack of knowledge about the competitive service

provisions to which their exceptions needed to be compared. The

Commission’s study relied on agencies to provide narrative justifications

for continuing the exceptions, and the Commission emphasized that it had

asked respondents to be very specific. Any future researcher might

consider whether, and if so how, more specific responses could be elicited

from respondents.

Determining the Reliability

of Responses

A second research issue is whether agency respondents can reliably assess

the flexibility of personnel requirements and practices under the

competitive service. In Statutory Exceptions to the Competitive Service

(1973), the Civil Service Commission agreed with certain agencies’

assertions that their personnel practices would not be allowed under title

5, and disagreed with others. For example, the Commission stated that

several agencies were under the misconception that competitive

procedures for selection necessarily required a written test; it also noted

18Although a complete legislative history of an agency’s operation outside of, or prior to, the creation

of the competitive service may go back more than a century, the history of many current exceptions

goes back no farther than the Ramspeck Act of 1940. That act authorized the president to remove

almost all exceptions that had been created since the passage of the Civil Service Act of 1883. In the

Civil Service Commission’s 1973 report about statutory exceptions, it is noted that the Ramspeck Act

resulted in the Commission being largely concerned with exceptions that had occurred since 1940.

Page 32 GAO/GGD-97-72 The Excepted Service
Chapter 3 

Some Prior Studies of the Excepted Service

that both interviews and peer referrals could have their place in

competitive service selections. The Commission speculated that some

responses might reflect some excepted service agencies’ long

independence from competitive service appointment laws and regulations;

such respondents might not be familiar with the ways in which the

competitive service had evolved in response to concerns with past

rigidities and weaknesses.

However, this reliability problem may not simply reflect the

misperceptions of officials in excepted service agencies, whose role might

not require a working knowledge of the competitive service provisions

that cover other agencies. Our prior work suggests that some agency

officials may not clearly understand the actual sources of perceived

inflexibilities or constraints in their own agencies. For example, at a 1995

symposium we sponsored,19 a participant recounted an incident in which

Internal Revenue Service officials learned that constraints on their

prerogatives were not so extensive as they had thought; OPM

representatives at one meeting told them a particular constraint was

self-imposed and not an OPM requirement. In addition, a recent study of

ours found that several participating agencies discovered, while preparing

their waiver requests for a pilot project, that the burdens and constraints

that confronted their managers often were imposed by the agency itself or

its parent department and were not the result of requirements imposed by

central management agencies.20

This reliability issue is critical to a comparison of the flexibility of

personnel systems in the competitive and excepted services. If

respondents’ assessments cannot be assumed to be reliable, any

comparison based on their views would be suspect. Thus, one would be

uncertain whether policies and procedures found in excepted service

agencies would be unavailable to competitive service agencies due to the

stricter requirements of title 5. Conversely, one would also be uncertain

whether excepted service agencies needed their exceptions in order to

adopt particular policies or procedures.

Consequently, researchers addressing the flexibility issue might take one

of two differing approaches to reliably determining and comparing the

19Transforming the Civil Service: Building the Workforce of the Future: Results of a GAO-Sponsored

Symposium (GAO/GGD-96-35, Dec. 26, 1995), p. 9.

20GPRA: Managerial Accountability and Flexibility Pilot Did Not Work as Intended (GAO/GGD-97-36,

April 1997) p.4. A similar instance is reported in Management Reform: Status of Agency Reinvention

Efforts (GAO/GGD-96-69, March 1996).

Page 33 GAO/GGD-97-72 The Excepted Service
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Some Prior Studies of the Excepted Service

approaches and legal bases of personnel systems in the two services. The

first approach would be to rely on respondents to make the comparisons,

while (1) ensuring that respondents were adequately knowledgeable in

this regard and/or (2) finding methods to confirm the legal basis of any

constraints they perceived. The second approach would be to rely on the

respondents only for descriptions of their personnel systems; the

researchers would then compare the personnel systems and determine

their legal bases. The second approach would probably require more time

and expertise on the part of researchers than would the first.

Describing and Comparing

Personnel Systems

Identifying the appointing authority (as was done in chapter 2) is only a

starting point for describing a personnel system in the excepted service.

Such a description could include the personnel system’s various

exceptions from title 5; its statutory, regulatory, and policy bases; and the

actual practices it involves. The set of exceptions might be identified

through an extensive review of the many relevant chapters and

subchapters of title 5 where exceptions to coverage by particular

provisions are defined.21 The statutory requirements for the personnel

system might be found in a separate title of the U.S. Code, and regulatory

requirements might be found in the Code of Federal Regulations.

Personnel manuals and union agreements might further define policies

and procedures covering particular personnel systems within the excepted

service. To understand actual day-to-day practices and how the features of

the personnel system interact would likely require additional information

for each personnel system to be studied. This information might already

exist, for example, in previous research documents, or new information

might be gathered through case studies.

However, legal research may well involve complications that are not

immediately apparent. For example, all applicable statutes for an

alternative personnel system may not be explicit in the public law creating

the exception. For instance, section 347 of the 1996 Department of

Transportation Appropriation Act directed the FAA to develop a new

personnel management system. The act states that the new system is not

subject to title 5 provisions, except for some clearly specified sections and

chapters. Although other applicable statutes are not explicitly specified in

the act, an FAA document explains that FAA continues to be subject to four

more chapters of title 5, the non-personnel management provisions of title

5, and those portions of title 5 that specifically apply to the Secretary of

21This type of analysis is illustrated in Appendix XI, “Comparison of Selected Features of Competitive

and Excepted Services,” in Personnel Management Project, Volume 3, December 1977.

Page 34 GAO/GGD-97-72 The Excepted Service
Chapter 3 

Some Prior Studies of the Excepted Service

Transportation. Through its own discretion, FAA also incorporated

additional sections and chapters of title 5 into its new personnel

management system.22

A researcher can also find complexities in the configuration of exceptions

under a single appointing authority. For instance, according to the 1991

MSPB report, the law provides for different personnel rules for the different

medical care occupations under title 38 U.S.C. Seven

occupations—physician, dentist, registered nurse, expanded-function

dental auxiliary, optometrist, physician assistant, and podiatrist—“are

covered by rules separate from those of title 5 for placement, pay

administration, leave, hours of duty, discipline, adverse actions and

appeals, and performance management. These employees are covered only

by the title 5 retirement rules.”23 Another five occupations—practical

nurse, occupational therapist, pharmacist, physical therapist, and

respiratory therapist—share placement and pay administration provisions

with other title 38 occupations. However, unlike other title 38 employees,

persons in these occupations are paid under the General Schedule rather

than under a separate pay scale and are subject to title 5 performance

management, leave, and discipline provisions.

Comparing excepted service and competitive service human resource

management systems may require detailed examinations of the personnel

systems within both services. In some ways, title 5 provisions do provide

stark contrasts with personnel practices in some excepted service

agencies. For example, TVA negotiates with employee unions on a wide

range of matters, including pay, job classification, and health insurance,

but title 5 specifically prohibits agencies from negotiating on these and

other specific matters. Nevertheless, one cannot assume that the title 5

requirements result in a single personnel system among competitive

service agencies that always sharply contrasts with those of excepted

service agencies. For example, title 5 provides OPM the discretion to use

pay and grade-setting provisions provided under title 38 for VA health care

occupations currently covered under title 5 in other agencies; in effect,

this means that some competitive service positions could have the same

pay and grade-setting provisions as found in the excepted positions in VA.

A second example arises from OPM’s authority under title 5 to conduct

demonstration projects, under which participating agencies can diverge

from a broad range of title 5 requirements. Thus, to the extent that the

22FAA Personnel Management System, March 28, 1996, pp. i-ii.

23The Title 38 Personnel System in the Department of Veterans Affairs: An Alternative Approach

(1991), p. 7.

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Some Prior Studies of the Excepted Service

flexibilities allowed under title 5 result in less uniform agency personnel

systems in the competitive service, comparisons between the competitive

service and the excepted service personnel systems would have to

consider variations in the competitive service, as well as in the excepted

service.24

24Recent proposals for performance-based organizations have described some of the existing

personnel flexibilities under title 5. For example, see OPM’s “Template of Personnel Flexibilities for

Use by Agencies Selected for Conversion to Performance-Based Organizations,” March 27, 1996,

especially part II.

Page 36 GAO/GGD-97-72 The Excepted Service
Chapter 4 

Two Sources of Data on the Excepted

Service

OPM maintains two data sources, based on data routinely submitted by

agencies, that provide information about the excepted service. One is the

Monthly Report of Federal Civilian Employment (Monthly Report), which

contains summary employment data for agencies. The other is the Central

Personnel Data File (CPDF), which contains personnel information on most

federal civilian employees. Each data source has advantages and

disadvantages for providing information about the excepted service.

In chapters 1 and 2, we used these data sources to draw different

statistical portraits of the excepted service. In this chapter, we detail the

differences between the two data sources that affect their use for this

purpose. We also identify some unresolved issues concerning their

coverage and accuracy, as well as the methodological difficulty of mixing

data from the two sources in an analysis.

Coverage of Agencies Of the two sources, the Monthly Report gives more comprehensive

information on the governmentwide distribution of excepted service

employees. As shown in table 4.1, the Monthly Report was designed to

provide more comprehensive coverage of federal agencies than the CPDF.

Although both sources exclude nonappropriated fund employees25 and

some agencies (for example, the CIA, DIA, and NSA), the CPDF excludes more

agencies (for example, all judicial branch agencies and many legislative

branch agencies). The CPDF also excludes the Postal Service, which

employed 62 percent of all excepted service employees in June 1996.

25These include employees paid from nonappropriated funds of the Army and Air Force Exchange

Service, Army and Air Force Motion Picture Service, Navy exchanges, Marine Corps exchanges, Coast

Guard exchanges, and other instrumentalities of the United States conducted for the comfort and

improvement of personnel of the armed forces. These employees are broadly excepted from title 5, as

specified in section 2105 of that title.

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Chapter 4 

Two Sources of Data on the Excepted

Service

Table 4.1: Comparison of Coverage of

Federal Civilian Employment for Two

Data Sources Central Personnel Data File

Monthly Report of Federal Civilian

Employment

Includes employees in the executive

branch, with some exclusions:

Excludes White House Office and Office of

the Vice President employees.

Excludes Board of Governors of the Federal

Reserve System, Postal Rate Commission,

U.S. Postal Service, and Tennessee Valley

Authority employees.

Excludes commissioned officers in the

Department of Commerce, Department of

Health and Human Services, and the

Environmental Protection Agency.

Excludes Central Intelligence Agency,

Defense Intelligence Agency, and National

Security Agency employees.

Includes employees in the executive

branch, with some exclusions:

Excludes Central Intelligence Agency,

Defense Intelligence Agency, and National

Security Agency employees.

Excludes employees in the judicial branch. Includes employees in the judicial branch.

Includes legislative branch employees in

only the Government Printing Office, the

U.S. Tax Court, and several small

commissions.

Includes employees in the legislative

branch.

Excludes most nonappropriated fund

personnel.

Excludes nonappropriated fund personnel.

Excludes non-U.S. citizens in foreign

countries.

Includes non-U.S. citizens in foreign

countries.

Source: OPM, Operating Manual: Federal Workforce Reporting Systems, December 26, 1994.

Available Information Although limited to fewer agencies, the CPDF has been designed to provide

more information about excepted service employees than does the

Monthly Report. The Monthly Report collects summary counts for

employees in the excepted service and the SES (combined) by agency, with

breakouts for permanent (versus temporary or indefinite) appointments,

major geographic locations, and accessions.26 (Accessions are additions to

an agency’s workforce resulting from new hires, reappointments,

transfers, and other personnel actions.)

26The reporting system for the Monthly Report is described in OPM’s Operating Manual: Federal

Workforce Reporting Systems, December 26, 1994. Additional details are found in OPM’s Standard

Form 113-A: Monthly Report of Federal Civilian Employment: User Guide, August 1, 1996. Tables

based on the data are routinely disseminated through OPM’s Employment and Trends reports.

Page 38 GAO/GGD-97-72 The Excepted Service
Chapter 4 

Two Sources of Data on the Excepted

Service

In contrast, the CPDF includes all this information and considerably more

personnel data, such as occupation and pay plan,27 and collects this data

on each employee. Perhaps most importantly, the CPDF can separate

excepted service employees from SES and competitive service employees.

It also indicates the legal or regulatory basis (that is, the appointing

authority) for appointing excepted service employees. For agencies

covered by both sources, the CPDF also provides data on more agency

suborganizations. Thus, the CPDF—and not the Monthly Report—could

show, for example, that most excepted service employees in VA were

within the Veterans Health Administration, and that most of these were

appointed under the Veterans Medical Personnel Authority.

Methodological

Difficulties

Future researchers will have to consider at least two unresolved issues

about these data sources. As we have shown, the Monthly Report has

better coverage of the excepted service than does the CPDF; the first

unresolved issue concerns the completeness of the Monthly Report’s

coverage. A second unresolved issue is the accuracy of data in the CPDF

and the Monthly Report. Moreover, future researchers should be aware of

the methodological difficulty of mixing data from the two data sources.

Since the Monthly Report is designed to capture almost all federal civilian

employment, it does provide an extensive list of agencies with excepted

service employees. However, we have not verified that it is an exhaustive

list.28 In particular, although the Monthly Report includes data on

government corporations, we have not verified that all corporations with

federal civilian employment are reported in it.29 Previous studies of the

excepted service, although dated, have examined other entities that are

explicitly excluded from reporting to the Monthly Report. These include

the major intelligence agencies and the nonappropriated fund employees

27The many data elements of the CPDF are listed in OPM’s Operating Manual: Federal Workforce

Reporting Systems, December 26, 1994. The full data dictionary is found in The Guide to Personnel

Data Standards (previously known as FPM Supplement 292-1, Personnel Data Standards).

28Other agencies’ lists of federal agencies might be used to identify federal agencies, if any, that do not

appear in OPM lists. These other lists include the Office of Management and Budget’s (OMB) annual

list of designated federal entities and federal entities, OMB’s federal budget data by agency, the

National Institute of Standards and Technology’s Codes for the Identification of Federal and Federally

Assisted Organizations (FIPS PUB 95-1), and the Office of the Federal Register’s The United States

Government Manual. Even if additional agencies were found on these lists, further investigation would

be necessary to determine whether the discovered agencies were subsumed under other agencies in

the OPM lists, and whether they were employing excepted service employees.

29Determining the universe of government corporations may be difficult. Our prior study found that no

comprehensive descriptive definition of, or criteria for, creating government corporations existed, and

counts of their number have varied widely. See Government Corporations: Profiles of Existing

Corporations (GAO/GGD-96-14, December 1995).

Page 39 GAO/GGD-97-72 The Excepted Service
Chapter 4 

Two Sources of Data on the Excepted

Service

at various agencies. (According to a Department of Defense official, that

department alone had about 170,000 nonappropriated fund employees.)

We have not examined the accuracy of either data source. According to

OPM, a number of quality control operations are performed on CPDF data,

and, where possible, comparisons are made between CPDF data and

Monthly Report data to identify any large data discrepancies.30 OPM has

also developed a program for checking Monthly Report data for logical

inconsistencies, missing values, and out-of-expected-range data; through

this program, agencies may interactively correct their data in response to

error messages, when they have electronically submitted their data.31

Given the differences between the two data sources, mixing their data in

an analysis can raise issues of accuracy. Since the Monthly Report data

cover different agencies than do CPDF data, aggregate findings are not

directly comparable between the two data sources. Moreover, even data

for the same agency drawn from the two sources may not be comparable.

Discrepancies in counts for agencies—whether resulting from

understandable differences in coverage (such as CPDF’s exclusion of

foreign nationals employed overseas) or other possible reasons, such as

inaccurate counts—can be fairly large. For instance, CPDF data as of

June 1996 indicated that the Federal Emergency Management Agency

(FEMA) employed 7,984 excepted service employees; Monthly Report data

for the same month indicated that FEMA employed 2,884.32

30We have a separate study currently under way to examine the accuracy of data in the CPDF.

31OPM’s efforts to promote quality control for the CPDF are described in its Operating Manual: Federal

Workforce Reporting Systems, December 26, 1994, especially pp. 2-3, 41. OPM’s program to check

Monthly Report data is presented in its “Listing of SF 113-A Reporting Edits,” Standard Form 113-A:

Monthly Report of Federal Civilian Employment: User Guide, August 1, 1996, pp. 36-45.

32According to an OPM official, this discrepancy primarily resulted from the many FEMA employees on

nonpay status in June 1996, who were counted in the CPDF data and not in the Monthly Report data.

Page 40 GAO/GGD-97-72 The Excepted Service
Page 41 GAO/GGD-97-72 The Excepted Service
Appendix I 

Objectives, Scope, and Methodology

Our overarching objective was to provide an introduction to the excepted

service and to identify research issues for planning future studies of it.

Specifically, our objectives were to describe (1) the distribution of

excepted service employees across government organizations; (2) the

composition of the excepted service in terms of the various legal bases

under which employees were appointed; (3) policy concerns and study

focuses that have guided some prior studies; and (4) the coverage of

agencies and employees, and available information, in two data sources

that were useful for studying the excepted service. Additionally, we sought

to identify research issues and methodological difficulties associated with

each of these objectives.

For the first objective of describing the distribution of excepted service

employees across government organizations, we analyzed OPM data from

the Monthly Report of Federal Civilian Employment (Monthly Report) for

June 1996. Since Monthly Report data do not count SES employees

separately from excepted service employees, our use of the combined

number is not a precise count of excepted service employees. However,

we determined that the imprecision was very small; based on our analysis

of data from the CPDF, which covers most federal civilian employees, SES

employees made up less than 2 percent of the combined count in

June 1996. Although the Monthly Report covers almost all agencies, it does

not provide a full count of excepted service employees since it collects

data neither from the major intelligence agencies nor on nonappropriated

fund employees who were included in some previous studies of statutory

exceptions to the competitive service.

For the second objective of describing the legal bases of excepted service

employees’ appointments, we analyzed OPM’s CPDF data on appointing

authorities for June 1996. Because the CPDF data exclude over half the

positions in the excepted service, we illustrate patterns for particular

agencies and appointment authorities, rather than describing the entire

excepted service.

For the first and second objectives, we did not verify the data used in our

descriptions since that was beyond the scope of this introduction to the

excepted service. The descriptions are for June 1996.

To identify policy concerns and study focuses in prior studies of the

excepted service, we reviewed four studies that illustrate significantly

different approaches to studying the excepted service.

Page 42 GAO/GGD-97-72 The Excepted Service
Appendix I 

Objectives, Scope, and Methodology

Our fourth objective was to describe the completeness of coverage and

available information in two data sources, the CPDF and the Monthly

Report, that we used for analyzing aspects of the excepted service for

objectives 1 and 2. We described their coverage and information based

primarily on OPM documentation, although we also clarified some details

about the Monthly Report with the OPM manager in charge of it.

We identified research issues and methodological difficulties associated

with the four objectives by considering them in light of our standard

processes for planning a study.33 We examined the various ways in which

data on the personnel systems in the excepted service might be collected,

and identified the limitations on what these data might reveal and on what

we might be able to report about them. These considerations, and our

review of some previous studies, led us to identify certain research issues

and methodological difficulties that are likely to confront any researcher

who intends to delve more deeply into the excepted service in the future.

33These processes include identifying research questions, the needed data, available data sources,

methods of data collection and analysis, the type of supportable findings, and potential limitations of

findings.

Page 43 GAO/GGD-97-72 The Excepted Service
Appendix II 

Major Contributors to This Staff Study

General Government

Division, Washington,

D.C.

Stephen E. Altman, Assistant Director, Federal Management and

Workforce Issues

Michael J. O’Donnell, Advisor

Gregory H. Wilmoth, Senior Social Science Analyst

Denver Regional

Office

Terry J. Hanford, Evaluator-in-Charge

(410077) Page 44 GAO/GGD-97-72 The Excepted Service
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