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TRANSFORMING THE DEFENSE DEPARTMENT:

EXPLORING THE MERITS OF THE PROPOSED

NATIONAL SECURITY PERSONNEL SYSTEM

HEARING

BEFORE THE

SUBCOMMITTEE ON CIVIL SERVICE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

APRIL 29, 2003

Serial No. 108–40

Printed for the use of the Committee on Government Reform

(

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

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

WILLIAM J. JANKLOW, South Dakota

MARSHA BLACKBURN, Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

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

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

CHRIS BELL, Texas

———

BERNARD SANDERS, Vermont

(Independent)

PETER SIRH, Staff Director

MELISSA WOJCIAK, Deputy Staff Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHILIP M. SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY ORGANIZATION

JO ANN DAVIS, Virginia, Chairwoman

TIM MURPHY, Pennsylvania

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

ADAH H. PUTNAM, Florida

NATHAN DEAL, Georgia

MARSHA BLACKBURN, Tennessee

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

CHRIS VAN HOLLEN, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

RONALD MARTINSON, Staff Director

JOHN LANDERS, Professional Staff Member

CHRIS BARKLEY, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on April 29, 2003 .............................................................................. 1

Statement of:

Chu, David S.C., Under Secretary for Personnel and Readiness, Department of Defense; and Dan G. Blair, Deputy Director, Office of Personnel Management ........................................................................................... 12

Harnage, Bobby L., national president, American Federation of Government Employees, AFL–CIO; and G. Jerry Shaw, general counsel, Senior

Executives Association ................................................................................. 89

Walker, David M., Comptroller General of the United States, U.S. General Accounting Office .................................................................................. 56

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

Chu, David S.C., Under Secretary for Personnel and Readiness, Department of Defense, prepared statement of ..................................................... 15

Davis, Hon. Jo Ann Davis, a Representative in Congress from the State

of Virginia, prepared statement of .............................................................. 3

Harnage, Bobby L., national president, American Federation of Government Employees, AFL–CIO, prepared statement of .................................. 92

Shaw, G. Jerry, general counsel, Senior Executives Association, prepared

statement of ................................................................................................... 140

Walker, David M., Comptroller General of the United States, U.S. General Accounting Office, prepared statement of ........................................... 60

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

of California, prepared statement of ........................................................... 7

(1)

TRANSFORMING THE DEFENSE DEPARTMENT:

EXPLORING THE MERITS OF THE PROPOSED NATIONAL SECURITY PERSONNEL

SYSTEM

TUESDAY, APRIL 29, 2003

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY

ORGANIZATION,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. Jo Ann Davis (chairman of the subcommittee) presiding.

Present: Representatives Davis of Virginia, Murphy, Waxman,

Norton, Davis of Illinois, Watson and Cooper.

Staff present: Chad Bungard, deputy staff director and senior

counsel; Ronald Martinson, staff director; John Landers, professional staff member; Heea Vazirani-Fales and Vaughn Murphy,

legislative counsels; Chris Barkley, clerk; Phil Barnett, minority

chief counsel; Christopher Lu, minority deputy chief counsel; Tania

Shand, minority professional staff member; Earley Green, minority

chief clerk; Cecelia Morton, minority office manager; and Teresa

Coufal, minority assistant clerk.

Mrs. DAVIS OF VIRGINIA. A quorum being present, the Subcommittee on Civil Service and Agency Organization will come to

order.

Thank you all for joining us today. We are here to discuss the

Defense Department’s proposed National Security Personnel System, which is part of the larger Defense Transformation for the

21st Century Act. In terms of both size and scope, this personnel

proposal, which affects nearly 700,000 civilian employees of the

Pentagon, or about one-third of the Federal Government’s non-postal civilian work-force, is among the most important matters that

will come before this subcommittee this session.

I called this hearing to give the members of this subcommittee

an opportunity to learn more about this legislation and to question

the Defense Department and the other stakeholders about the implications of this proposal, and I want to get to our witnesses as

quickly as possible.

Clearly, there are questions that are on everyone’s mind, foremost among them being the issue of whether Congress should give

the Defense Department flexibilities that exceed those granted to

2

the new Homeland Security Department just a few months ago. I

know many of our witnesses also want to address that topic.

I begin this hearing with an open mind. We must find a way to

recruit, reward and retain our most talented employees and to get

the most out of the Federal work force. And the Defense Department, given its unique mission and the necessity for civilian employees to work hand in hand with the brave men and women who

wear the uniform of our armed services, certainly has personnel

needs that are different from the rest of the Federal Government.

But as we all know, pay-for-performance will not work without a

strong personnel management system, one that is understood and

accepted by employees and their supervisors. I appreciate the Pentagon’s decision to publish much of this information in the April 2

Federal Register, and I’m sure we will have questions dealing with

these best practices in addition to the language of the legislation

before us.

I want to thank all of our witnesses, but now I’d like to go to my

ranking member, Mr. Danny Davis.

[The prepared statement of Hon. Jo Ann Davis follows:]

3

4

Mrs. DAVIS OF VIRGINIA. Do you have an opening statement,

Danny?

Mr. DAVIS OF ILLINOIS. Thank you very much.

Madam Chairwoman, I, too, want to welcome the witnesses as

we begin this session. We started this session working in a bipartisan manner to educate ourselves about how to best go about reforming the Civil Service. Since March 5, there have been four

Civil Service-related hearings in which we have heard from over 30

witnesses and sat through hours and hours of testimony. What I’ve

gleaned from the experts who took time out of their schedules to

testify at these hearings is that performance management systems

and employee input are imperative to any Civil Service reform proposal. This was crystallized for us at the joint House and Senate

hearings on Civil Service reform where, on a bipartisan basis, we,

Democrats and Republicans alike, applauded Chairman Voinovich

when he stated in response to GAO testimony about the President’s

Human Capital Performance Fund that the importance of performance management systems that the worst thing that could happen

is that you get started with this thing, and then it is a disaster,

and everybody points to it and says, I told you so. It wouldn’t work.

For those of us who’ve been through the mill, this is something

you’ve really got to spend a lot of time in order to do it right. Here

we are today at a rushed hearing, ignoring the advice of over 30

witnesses, and preparing to give the Department of Defense the authority to do what we were not willing to give the President the

authority to do 3 weeks ago. If we’re not going to spend the time

to do it right, then why the hearings? Why the witnesses? Why the

countless hours of testimony?

The legislative proposal that we’re considering today and which

is scheduled to be marked up on Thursday was delivered to Congress only 21⁄2 weeks ago. In the human capital section of the legislative proposal, it says that DOD’s proposal is based upon the Department’s civilian human resources strategic plan. Just last

month, GAO reviewed DOD’s civilian human resources strategic

plan and essentially declared it woefully inadequate. The GAO report stated, ‘‘the human capital strategic plans GAO reviewed for

the most part lacked key elements found in fully developed plans.

Most of the civilian human capital goals, objectives and initiatives

were not explicitly aligned with the overarching mission of the organization. Consequently, DOD and the components cannot be sure

that the strategic goals are properly focused on mission achievement.’’

And the report goes on and on. This weak foundation is what the

legislative proposal is based on.

Are we moving this legislation because it is good government, or

because it is politically expedient? DOD, by its own admission, stated in response to GAO’s comments that we are obligated to point

out that a significant portion of the review concentrated on strategic planning activities in the early stages of development. This is

exactly the problem with moving this legislation so quickly. The

proposal has no performance management system or safeguards to

protect against abuse. And there was no employee input in the development of the proposal. This proposal will impact 700,000 civilian DOD employees, and employee representatives first saw this

5

legislative proposal earlier this month, about the same time DOD

was briefing congressional staff on it.

My staff has reviewed the April 2 Federal Register notice on

DOD’s nine demonstration projects, which DOD says is the basis

for their legislative proposal and in which they state provides the

opportunity for employee comment. I do not consider responding to

a Federal Register notice adequate employee input in the development of a plan, not to mention that what appeared in the Federal

Register in no way resembles what is being considered by the subcommittee today.

In an article in Sunday’s Washington Post, a spokesman for

Chairman Tom Davis explained that we are rushing to hold this

hearing and markup because, ‘‘the train is leaving the station.’’ Mr.

Davis feels like we either drive it or get run over by it. This train

may be leaving the station, but, if the Government Reform Committee is to drive it, I’d rather do so down the track leading toward

good government rather than political expediency. By the end of

this week, we’ll know which track this committee is on.

I welcome the witnesses, Madam Chairwoman. Thank you very

much.

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

And we are also joined the by the ranking member of the full

committee Mr. Waxman.

Mr. Waxman, do you have an opening statement?

Mr. WAXMAN. I do. Thank you very much, Madam Chair. I’d like

to thank you for holding this hearing. Without question the administration’s proposal to rewrite rules for civilian employees of the

Department of Defense is an important issue and one that merits

careful consideration by our committee. That’s why I was troubled

to learn last week that the bill to exempt the Department from the

Civil Service laws was to be rushed through the committee tomorrow, just 1 day after the introduction of the legislation. The markup has now been delayed 1 day. That’s helpful, but it is still not

the right way to consider a piece of legislation that will directly affect 700,000 civilian employees at the Department of Defense and

indirectly affect 2 million other Federal employees.

At the Volcker Commission hearing last month. I read a quote

from Tom Friedman, the columnist with the New York Times. Mr.

Friedman’s quote is worth keeping in mind as we consider reforming the Civil Service System. Mr. Friedman wrote, ‘‘Our Federal

bureaucrats are to capitalism what the New York Police and Fire

Departments were to September 11, the unsung guardians of

America’s civic religion, the religion that says if you work hard and

play by the rules, you’ll get rewarded, and you won’t get ripped off.

So much of America’s moral authority to lead the world derives

from the decency of our government and its bureaucrats and the

example we set for others. They are things to be cherished,

strengthened and praised every single day.’’

Unfortunately, the Bush administration has hardly done its part

to cherish, strengthen and praise Federal employees. Since day 1

of this administration, there has been a relentless attack on the

Civil Service. Federal jobs have been given to private contractors,

who are often unsupervised and unable to perform the jobs as efficiently or effectively. Attempts have been made to slash annual pay

6

increases for Federal employees. Financial bonuses have been given

to political appointees instead of career employees. And now we

have an effort by the administration to completely strip Federal

employees of basic Civil Service protections.

It’s incredible that the group of employees the administration has

chosen to target this time are Defense Department employees.

These are the same employees who saw terrorists crash an airplane into their headquarters. These are the same employees who

made enormous sacrifices to support the military effort in Iraq.

What’s truly remarkable is the sweeping nature of the bill before

us. It gives the Secretary of Defense a blank check to undo in

whole or in part many of the Civil Service laws in the U.S. Code.

These provisions have been adopted over the past century to ensure that our Federal Government did not become a patronage system.

This bill goes well beyond the flexibilities that Congress gave the

Homeland Security Department last year. Among other things, this

bill gives supervisors complete discretion to set salaries and allocate raises. It removes the statutory requirement that layoffs be

based on performance and seniority, rather than favoritism. It allows DOD to require employees to work overtime or on holidays

and weekends without any additional pay. It denies employees

their current right to appeal unfair treatment to the Merit Systems

Protection Board. And, it strips employees of their collective bargaining rights.

Now, the administration will say I’ve distorted what they’re planning to do, but read their bill. After all, you’ve had it for 24 hours.

Read that bill.

I would hope we would have order, Madam Chair.

Everything I’ve suggested is possible because this bill before us

is a blank check. We don’t know what the Defense Department is

going to do. DOD is asking to be exempted from the Civil Service

laws but isn’t telling us what kind of personnel system it’s going

to adopt. Given the Bush administration’s track record on Civil

Service issues, there’s no reason to think that DOD’s new system

will be a fair one. There’s almost no reason to think that the new

personnel system will be a good one.

Last month GAO issued a report summarizing its review of

DOD’s civilian strategic plan, presumably a blueprint for any personnel system that DOD might adopt. GAO found the plan to be

completely lacking. That hardly inspires confidence for what DOD

might do if we give them this enormous authority.

As I said at the full committee hearing last month, I believe that

we should be considering Civil Service reforms, but this is not the

way to do it. I urge my colleagues to slow down this runaway legislative train and give this bill more careful consideration.

Thank you, Madam Chair.

Mrs. DAVIS OF VIRGINIA. Thank you.

[The prepared statement of Hon. Henry A. Waxman follows:]

7

8

9

Mrs. DAVIS OF VIRGINIA. We will have order, please.

Thank you, Mr. Waxman.

Are there any other Members who wish to make an opening

statement?

Ms. NORTON. If I may, Madam Chairwoman.

Mrs. DAVIS OF VIRGINIA. Ms. Holmes Norton.

Ms. NORTON. I appreciate this hearing, Madam Chairwoman; indeed I guess we ought to be grateful for this hearing. And if I may

say so, Madam Chairwoman, I appreciate the careful way in which

you laid out the agenda for the committee in the beginning of the

session, and I recognize that you and Mr. Davis are under some

pressure to move this bill in the way you are, and I regret that

puts us all under pressure. I don’t think this starts—this kind of

fast track starts with this subcommittee or committee, but perhaps

above your pay grade. But, the rest of us do have questions to ask,

for example, why we are putting on a fast track huge changes unprecedented in 100 years for one-third of the civilian work force?

We’ve got to ask the obvious question: What is the emergency? Because, nobody would move with this speed for this many Federal

employees affecting this many operations of the Federal Government unless there were some palpable emergency.

Indeed I have to ask about the emergency in light of the fact that

the DOD hasn’t reformed itself yet. We are told that Mr. Rumsfeld

wants the civilian part of the work force to be reformed. Well,

should it be reformed before he’s got in place the reforms he says

he wants to make in the Department of Defense, especially since

we are given security reasons for this action today?

I am not unsympathetic at all with necessary changes in the Department of Defense on both sides, military and civilian. In this region we lived through September 11. I think we’d have to be brain

dead not to look at every part of the defense establishment after

September 11 to see what should be changed. Moreover, I am particularly sympathetic with the notion that Mr. Rumsfeld espouses

that he wants to move some of the support jobs now in the military

to civilians, whether to contractors or to civilian employees, he

says, because that would be less expensive. I say also because I do

not think we can live through another major conflict where we

snatch people out of their jobs in the Reserves and in the National

Guard and send them abroad as we have with the consequences on

their families and on their communities. All of this, it seems to me,

should be on the table. But why should it be on the table with this

speed, swept up so that it, in fact, gets no significant scrutiny?

Why are we ignoring the only precedent on the table, the big, fat

Homeland Security Department model? Now, if you want to reform

a big part of the work force, the first thing you would do, it seems

to me, is reform a smaller part of the work force and see if that

works—see what works and what doesn’t. Whether it was intended

or not, that’s exactly what you might regard the Homeland Security Department, and yet, the ink is barely dry there, and this legislation goes beyond, in many respects, what the Homeland Security Department is allowed to do; this in spite of the fact that at

a joint hearing with the Senate, the GAO testified that for pay performance alone, you had to have a credible and validated system

10

in place as far as GAO was concerned in order to avoid huge problems.

Moreover, I can’t understand this fast track for another reason.

Mr. Voinovich said at that joint hearing just a couple of weeks ago

that bill wasn’t going to go anywhere. He said the failure to have

in place for—pay-for-performance, the credible system, meant that

bill just wasn’t going anywhere. He was the chairman of the Senate

committee. Why do we rush things through the House, knowing

full well that in this democracy it takes two to tango, and that the

Senate, in effect, has already said this kind of reform needs to be

slowed down until we have in place the predicates for reform?

One of the things I asked my colleagues to do is to ask themselves if a major business was to effect such a huge overhaul in its

business, how would it do it? Would it, for example, bypass the

only personnel experts on board? In this case the likelihood of bypassing OPM is great and, in fact, is allowed, and all for something

vaguely called national security. Hey, wait a minute. We’ve lived

through that word before. And one of the things we’re not going to

do is to allow that word to be impenetrable. National security

should not be enough to throw up in the air the work force, yell

out national security, and figure that everybody understands what

you’re doing. This is structural change of the government itself,

and I believe you are putting the government at risk when you proceed recklessly without the kind of scrutiny one would expect even

of a small part of the work force.

The waivers in almost half of the major chapters of section 5 that

are allowed here are mind-blowing, that you could waive all the

due process and appeal rights, all the collective bargaining rights.

Well, what kind of government are you trying to create? In whose

image? In part or in full, six other chapters that were not waivable

in the Homeland Security Act are waivable here. You could do reductions in force not only setting aside tenure, but setting aside efficiency and performance rating? Well, then, how are you going to

do the reduction in force? What standard are you going to use? It’s

not time on the job, it’s not efficiency, and its not your performance

rating. This sounds like a cruel joke, and I think that whatever is

pressing it needs to have somebody press the other way.

My own experience in government with a very troubled agency,

obviously a microagency compared to the Defense Department, several thousand employees at the Equal Employment Opportunity

Commission, was, however, that I had to change the agency at

least as much, and I would grant you more, than you are trying

to change the DOD because it had to be changed from the bottom

up, every system tossed out and put in place. And my own experience tells me you don’t do that from a blueprint. You do it from

experience and experimentation. You work on parts of the system,

shake out the problems, and then you go to larger and larger parts

of the system.

We had to rebuild that agency. We had to move all the lawyers

and the investigators who were in different parts of the country together. We had to move it from an expense litigation-oriented system that produced few remedies to a system based more on mediation and settlement, where the remedies went up, and, whereas

we had a dozen different agencies, we took three in different parts

11

of the country until we were sure that we were not creating a problem greater than the problem we are trying to solve.

And this morning I am going to want a guarantee that you are

not doing precisely that: creating in our military establishment a

bigger problem than the problem we are trying to solve, because if

you are doing that, my friends, you are putting the U.S. Government at risk.

Thank you, Madam Chairwoman.

Mrs. DAVIS OF VIRGINIA. Please, let’s keep order so we can get

to our witnesses here.

Are there any other Members who would like to make an opening statement?

Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Madam Chairwoman. I will be

very brief because I know others have covered my concerns.

But first I’d just like to emphasize again and question the need

to move ahead at such a rapid pace on something that obviously

will affect so many lives and will set potentially a precedent for

other agencies. So, I see no reason why we should rush through

something that will affect over 700,000 civilians at the Department

of Defense, many of whom are my constituents. Congresswoman Eleanor Holmes Norton raised many of these issues, and I want to

associate myself with her remarks.

I also question the need to move forward at this time until we’ve

seen the results of the experiment that the Congress just enacted

a short time ago with respect to the new Department of Homeland

Security. And it seems to me we need to see how that process

works, how the changes in the personnel system in that Department work before we start a wholesale reorganization of another

department.

So I don’t want to prolong this. I want to get to the witnesses.

I want to thank you, Madam Chairwoman, for the opportunity to

make an opening statement.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Van Hollen.

I think since so many have said it that I need to make a statement with regards to the expediency in which we had to hold this

hearing. I regret that we had to do it so quickly; however, unfortunately, if you notice, it is not a stand-alone bill. We are having the

hearing on portions of the bill that are being marked up in Armed

Services next week, and in order to make sure that we had a hearing under what I felt was the jurisdiction for this matter, we had

to do it very quickly this week. And I do appreciate each one of you

showing up today to hear our witnesses.

I ask unanimous consent that all Members have 5 legislative

days to submit written statements and questions for the hearing

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

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

ordered.

I also ask unanimous consent that all exhibits, documents and

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

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

12

It is the subcommittee standard of practice to ask witnesses to

testify under oath, so if you will, Mr. Blair and Dr. Chu, if you will

both stand, please.

[Witnesses sworn.]

Mrs. DAVIS OF VIRGINIA. Let the record reflect that the witnesses

have answered in the affirmative.

Our first panel is here to represent the administration, and we’re

fortunate to have Dr. David Chu, the Under Secretary of Defense

for Personnel and Readiness. We also have Dan Blair, the Deputy

Director of the Office of Personnel Management.

Dr. Chu made it back from England just in time to be with us

this morning, so we’re delighted that you are able to be here to testify. You are recognized first for 5 minutes, Dr. Chu.

STATEMENTS OF DAVID S.C. CHU, UNDER SECRETARY FOR

PERSONNEL AND READINESS, DEPARTMENT OF DEFENSE;

AND DAN G. BLAIR, DEPUTY DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT

Mr. CHU. Thank you very much, Madam Chairwoman. I very

much appreciate the opportunity you have given the Department of

Defense and the Office of Personnel Management to provide this

testimony this morning and to explain the authority we’d like to

seek from the Congress.

We also want to thank the Congress for its earlier actions in giving the Department of Defense significant demonstration authority

to conduct experimentation in alternative personnel systems over

the last 20 years. The Department of Defense, as some here may

be aware, currently has nine such demonstration projects operating. They cover 30,000 employees and specifically respond to the

issue that I think Mr. Owens is concerned with.

There is a substantial base of long-standing, practical evidence

about the kinds of change we would propose to make. Indeed, the

OPM has independently surveyed our personnel. Its findings are

contained in the Summative Evaluation for 2002 that looks at the

response of the employees themselves over the course of those demonstrations. What that evidence indicates is that employees are

more satisfied and, therefore, more productive as a result of the

changes that have been made. That’s also true if you look at OPM’s

most recent survey of the entire Federal Government, and you look

at the employees who are in the demonstration projects as opposed

to all other employees, and again you will find a higher level of satisfaction in our work force.

It is for this reason that a year ago, over a year ago, in March

2002, this Department began a review of the lessons learned from

the 20 years of demonstration projects we have been running.

Those lessons, as you indicated, Madam Chairwoman, are summarized in the April 2 Register notice, because the intent of the Department is, in fact, to utilize the authority Congress has given us

on a broader scale that will largely apply to our acquisition work

force.

One conclusion you can reach from that review is not only do

these demonstrations point the way ahead to a much more effective

Civil Service for the future, but that we would like the authority

to extend those practices to the entire Department of Defense, and

13

to learn from those areas where the demonstration authority did

not quite reach the level we might need, and to propose the additions that we have recommended in this larger transformation bill.

The questions that you have raised this morning in this subcommittee go to why we want this, and why we want this at this

particular juncture in history. I think there is a single word that

summarizes our case for change, and this is transformation; that

is, the need to reshape American military forces to meet the needs

of the early 21st century, the needs that were driven home to us

on September 11, the needs that were driven home to us in operations that have taken place since then. We recognize that people

are at the heart of the ability of the Department of Defense to perform, and it is the quality of those people, the rules under which

they operate, that are essential if we are going to succeed in the

future.

We view this as one force, a force of uniformed personnel, Active

and Reserve, and a force of civilians, both civil servants and contractors. It must be a force that is agile; it must be a force that

is responsive to fast-paced, changing circumstances in the world

outside the boundaries of the United States.

We believe we have a good set of civil servants to a large extent

despite the rules under which they have to operate, not because of

those rules. That is, I think, underscored by the results of the

Brookings surveys of a variety of Federal agencies last year, which

alone among the Federal Government pointed to the Department

of Defense civilians as being more mission-oriented and more satisfied a year after the first Brookings surveys were done. You think

about the rules under which this Department operates. They really

go back in their intellectual history to the late 19th century. As

some others have observed this morning, they are often over 100

years old in their origins. The U.S. Government was a very different creature in that period. It was largely an administrative set

of processes for which civil servants were responsible. The modern

Defense Department, of course, dates from the Second World War

when the United States emerged on the world scene as a great

power. That’s a very different set of mission responsibilities, and it

is to that different set of mission responsibilities that the powers

sought in this legislation are directed.

We need to move perhaps as many as 320,000 military billets

from uniformed status to civil status of one sort or another. One

of the principle reasons they are in military status today is that’s

a much more flexible set of work rules than characterizes the Civil

Service. We’d like to consider the Civil Service as an alternative.

We would not only wish to think about contract employees as the

direction we should go. Likewise, we will, over the next 10 to 15

years, have to hire a new generation of civil servants to replace the

roughly half of our work force that in that period of time will retire. And above all, we would like to meet the demands of our own

employees, which have been reiterated in survey after survey, that

the reward systems in the Department of Defense, like in other

Federal agencies, should better reflect the actual performance of

the employees, not simply their longevity.

This is, as some of you have noted, a bill that is very much oriented along the lines of the homeland security bill the Congress enVerDate 11-MAY-2000 11:48 Sep 09, 2003 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 D:\DOCS\88735.TXT HGOVREF1 PsN: HGOVREF1
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acted last year. It does contain some new elements. Most specifically, we would like to commit to and we would like the statute authority to undertake national bargaining with our unions on

human resource issues. At the moment under current statutes, we

must bargain every issue on a local level. Let me give you an example of what that produces.

The Congress has properly been upset at the abuse of travel and

charge cards by Federal employees. We are trying to get the right

to garnish the salaries of employees who do not pay their travel

card bill. We have 1,366 locals in the Department of Defense. The

last administration began the process of that bargaining. We still

have 200 locals to go in finishing that task.

But there are also important provisions in here that deal with

our ability to hire more experienced workers, older Americans, if

you will, to hire experts and to hire more promptly. In a word, we

are ready to proceed, Madam Chairwoman, if the Congress is willing to give us the authority.

We believe we need a strong Civil Service in the Department of

Defense as a matter of national security. We have 20 years of demonstration experience that backs up the proposals here that have

been summarized, as you noted, in our April 2 Federal Register notice. We have over a year of in-depth review of that experience. We

are ready to meet the kinds of criteria that the Comptroller General would set out as necessary for a successful pay-for-performance system. We seek your help in making sure the Department of

Defense Civil Service is a model for the Nation and a model for the

world. Thank you.

Mrs. DAVIS OF VIRGINIA. Thank you, Dr. Chu.

[The prepared statement of Mr. Chu follows:]

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Mrs. DAVIS OF VIRGINIA. Mr. Blair, no stranger to this committee, has already testified before us twice, and we really appreciate

it, and we thank you for coming today, and you’re recognized for

5 minutes.

Mr. BLAIR. Thank you, Madam Chair, Mr. Davis, members of the

committee. Thank you for including me in today’s testimony and

list of witnesses. I feel particularly privileged to join my colleague

Dr. Chu from the Department of Defense to talk about ways for the

Department to reach even higher levels of performance for their civilian employees.

These past few weeks and months we’ve been awed by the performance of those who serve in the uniform of our Nation, and we

cannot thank them enough for their sacrifices that they have made.

And so those sacrifices serve as an especially fitting backdrop for

our topic today, and that’s the Department’s more than 635,000 civilian employees, civil servants in the finest traditions of American

public force. They are a far less visible, but no less important component of the Department’s awesome total force. They, too, perform

magnificently in support of our troops, and indeed many were actually deployed in the Gulf. And these dedicated, rarely acknowledged, and sometimes maligned public servants deserve our thanks

as well. They actually delivered.

Today DOD seeks legislation to transform the way it manages its

civilian employees as it confronts the challenges of the 21st century. In doing so, we believe the Department’s proposals represent

another effort to provide badly needed human resources flexibilities

so that a critical agency with a crucial mission can deliver results

and secure the Nation.

The proposal is patterned after the landmark Homeland Security

Act. The bill is intended to afford the Defense Department wide

latitude to design human resources system tailored to its needs. It

allows the Department and OPM to work collaboratively with the

major DOD unions and rewrite many of the rules that govern

DOD’s civilian employees. DOD will be able to take its already successful efforts at broadbanding and pay-for-performance and extend

them throughout the Department.

We find this truly exciting, and DOD can lead the way at changing the conversation from what the Director of OPM Kay Coles

James has called what my pay increase will be next year to what

my—excuse me—from what the pay increase will be next year to

what my pay increase will be. We look forward to continuing our

partnership with DOD as they pursue further innovations, along

with the opportunity to continuing creating systems that adapt to

changing conditions while maintaining merit, and that is something OPM is committed to. We take our responsibility to work

with DOD and establish a new system through joint regulation

very seriously.

Again, thank you for this opportunity, and I will be happy to answer any questions.

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

The first question I have is for both of you, and I’d like to hear

from you, Director Blair, first after I ask the question.

Last summer and fall administration officials declared at that

time merger of two existing agencies with different personnel rules

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and labor agreements necessitated the extraordinary flexibilities

they were seeking for the creation of a new department. They said

the new human resources management system it would create

could be a model for the rest of the government. That new system

was supposed to be created with stakeholders’ input and oversight

by Congress.

We haven’t even seen a sliver of a new model at DHS as of yet,

and we are being presented with an argument from DOD that we

must now authorize the administration to proceed on its own with

even greater delegations from the Congress. You already have a

fully formed Department at DOD, and you just prosecuted a very

successful foreign military expedition with thousands of support

staff, both employees and contractors.

Wouldn’t it be wise for Congress to wait and to see how DHS

makes use of these flexibilities before we make similar changes

that affect an additional over 600,000 Federal employees? How do

you justifiy this legislation coming at this time, and don’t just—

please don’t tell me a matter of national security, unless you can

back that up with specifics that show me how national security is

currently being harmed by the provisions of Title 5, like the chapter on training. And, Director Blair I’d like to hear from you first.

Mr. BLAIR. Well, let’s remember the entity we’re talking about.

Last summer we were talking about a new department which was

going to be comprised of 22 different agencies and departments,

over 108 different subcomponents thereof. It definitely needed flexibility in order to bring itself together, and we are in the process

of bringing about the design. We’re working collaboratively, as Congress intended, with our union partners in this process.

The DOD is different. Dr. Chu just referenced that DOD was

born after World War II, and it has 20 years of demonstration

project experience. It has extensive experience in pay banding and

pay-for-performance. They are two entities, and I don’t think it’s

necessary at this point to wait for one entity to be up and running

before we pattern DOD’s reform proposals after a new department—after the new ones who will be taking place at a new department.

Mrs. DAVIS OF VIRGINIA. Secretary Chu.

Mr. CHU. My turn?

Mrs. DAVIS OF VIRGINIA. Your turn.

Mr. CHU. Thank you, ma’am.

First, as you yourself emphasized, this is already a fully formed

department. We do have, as my colleague Dan Blair underscored,

significant experience in the issues that are at stake here. In fact,

we’ve been in consultation with our colleagues in the Department

of Homeland Security to share with them the lessons that we have

learned in these earlier demonstrations.

I think I also want to emphasize that the Department of Defense

has an extraordinary reach of experience in personnel management. We do, after all, manage, under the jurisdiction of the Armed

Services Committee on which you sit, the military personnel systems, which are even larger in character. We have 1.4 million reservists, 1.3 million Active Duty individuals. And I think most observers agree that this is done with great success, as we’ve seen in

the current operations, and this is a tribute, I think, in the end to

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the excellence of personnel management, the experience we bring

to the table in this regard. I do think we can help lead here.

We believe we need to move forward because the transformation

process, as a matter of urgent military need, should go forward.

Mrs. DAVIS OF VIRGINIA. Thank you.

Dr. Chu, your proposal would allow the administration to write

and rewrite a lot of Title 5’s personnel programs. The general idea

would be that DOD and OPM would work together on the new

rules. The two agencies would have to agree.

Here’s my concern: When the two agencies don’t agree, the Secretary could overrule OPM or might not even consult with OPM,

effectively eliminating the current checks and balance systems if

the Secretary declares it’s essential to national security to regulate

unilaterally.

The Department of Homeland Security does not have this power.

The NSPS proposal provides that if the Secretary certifies that an

issuance or adjustment is essential to national security, which, by

the way, is not defined in the act, the Secretary can waive the requirement that the regulations establishing or adjusting a human

resources management system be issued jointly with OPM, subject

to the direction of the President.

In my experience, conflict is an inherent feature of bureaucracy,

and any official given a way out of that conflict will be sorely

tempted to take it. National security is almost broad enough to be

meaningless as a way to constrain the Secretary of Defense, and,

after all, we are discussing a national security personnel system.

So what constitutes ‘‘essential to the national security?’’ What does

‘‘certify’’ mean. I mean, there’s some holes in here that I need clarified that I don’t find in the legislation.

Mr. CHU. First, Madam Chairwoman, let me emphasize, we intend to consult with our OPM colleagues. We have already done so.

And, in fact, as I would emphasize, much of the design of this system derives from OPM studies and OPM’s reviews, including OPM

surveys of our demonstration project. So we ground our efforts really in OPM’s intellectual leadership over the last many years.

To this specific provision—I think there are three reasons for the

provision. First, as you yourself hint in your question, there is the

issue of governance. There is a question here, I think, of whom

does the Congress hold responsible for national defense, and I

think the answer to that question is the Secretary of Defense. And

as all good organizational principles argue, he or she needs to be

vested with the authority necessary to carry out that responsibility.

Second, as you suggest, there will be, as a matter of practicality,

situations where we disagree, and I think good public administration does not leave you with a tie. You do need some kind of

tiebreaker, and that’s essentially what this provision provides.

And finally, I think we all recognize, including OPM, that one

size does not fit all. OPM’s responsibility, as we all appreciate, is

to represent the many different agencies in the Federal Government. Others from time to time will have a different set of needs

and a different set of requirements than the Department of Defense. And what this structure does, is to provide an equitable way

for Defense to proceed in a way that responds to the military needs

of the country.

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National security waivers, as people on this committee are

aware, are scattered throughout the U.S. Code as something that

we provide as necessary to defend the Nation’s interests.

Mrs. DAVIS OF VIRGINIA. I’m going to have to move on to my colleagues, but I have a lot more questions for you if they don’t happen to ask them.

I am going to move on now to my ranking member, Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman.

Dr. Chu, there has been a tremendous amount of conversation in

the last several years about transforming or reforming the Civil

Service System. My question is when DOD thinks of reforming the

Civil Service System, are we equating that with improving the

Civil Service System; and if so, for whom?

Mr. CHU. Yes, sir. I think we are focused on improvements. We

want to make it better because we recognize it needs to be better

for the Department to succeed.

I think there are two important ways in which this legislation

would facilitate improvement; the first, to make it possible to hire

promptly. We are not going to succeed in replacing the current generation of civil servants, to say nothing of the additional slots that

might transfer from the military to civil status under current hiring procedures. It takes this Department an average of 3 months

to hire someone, and as a practical matter—and I understand that

from Mr. Blair, that we are better than many agencies in that regard. As a practical matter if you go to a college job fair, and you

are sitting at the table, as our people do, and say, it’ll be 3 months

before we can let you know, and your competitor at the next table

says, we’ll tell you tomorrow, you can guess which offer the talented young man or young woman is going to accept. So speed of

hiring, alacrity of hiring, is a key feature of what we would like to

improve.

Second, we have been convinced by the experience at China Lake

and at other demonstrations that pay banding as the pay construct,

as the job responsibility construct for our Civil Service servants, is

the preferred way to go, and we would need the authority in this

statute in order to get to that result. It would allow us to be more

competitive in the marketplace, allow us to adjust job responsibilities promptly as circumstances change.

Mr. DAVIS OF ILLINOIS. Thank you very much.

Mr. Blair, Director Chu has talked about expediency and the rate

at which we move. During a recent staff briefing with DOD, they

stated that it was forced to contract out for Iraqi translators because OPM was slow to respond to their request to expedite hiring

foreign translators as civil servants. Given the nature of the question, it should have received top priority. Do you know how long

it took OPM to turn around DOD’s request?

Mr. BLAIR. I don’t know what your staff was told by other staff.

I do know that the Director of the OPM received this request, and

we turned it around in approximately 5 working days.

Mr. DAVIS OF ILLINOIS. And so 5 working days——

Mr. BLAIR. In 5 working days, and I think that for the record,

it is important to note that the request was to hire—was for the

ability to hire noncitizens, which is really an extraordinary request

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in terms of—from a governmentwide perspective. And we take our

roles from a governmentwide perspective very seriously. But once

we got the request, we turned it around quickly and promptly, and

that’s what we would like to show for the record.

Mr. DAVIS OF ILLINOIS. In your opinion, was that sufficient turnaround time?

Mr. BLAIR. I think given the situation it really was sufficient

turnaround time. I don’t think we would want to be giving advice

and guidance on the hiring of noncitizens when other citizens

might be available or when we would want to—or especially with,

given our heightened security circumstances, we want to make sure

that you can exhaust those other available sources such as citizens

or working in other flexibilities. So I think we turned it around

quickly and promptly.

Mr. DAVIS OF ILLINOIS. Dr. Chu, you talked about best practices

and using the experiences and lessons that we have learned. Does

OPM have a performance management system that provides safeguards against abuse of the system?

Mr. CHU. I think you will see, sir, in the April 2 Federal Register

notice the kind of safeguards we would employ. This would not be

just up to the immediate supervisor in terms of rewards. In would

be—first of all, there would be criteria that would have to be established. There would be a restriction in terms of the range, the rewards and the fraction of the population that could receive them.

There would be a board to review the awards actually made.

So we believe that safeguards to ensure that this is done fairly

and well are in place in our proposal. We also believe that we’ve

got a track record over these many years of doing this in a way

that, as the OPM surveys demonstrate, leads to greater, often substantially greater, employee satisfaction than was the situation before they were under this kind of system.

Mr. DAVIS. Under the new system, what would be the process of

appealing personnel actions for employees?

Mr. CHU. The details of that depend, of course, on the issue

that’s involved. We have tried to spell that out in our Federal Register notice. In terms of pay changes, they would, as I indicated,

be subject to review by a more senior board. It would not be simply

the decision of the immediate supervisor. That supervisor would

make recommendations to that board constrained by the criteria I

have just described. But ultimately the board would be the final arbiter of the performance award.

Mr. DAVIS. Given the fact that we’re talking about 700,000 employees, have you determined how many pay bands there would be

and what spectrums they would cover?

Mr. CHU. Yes, sir. We would propose to create five broad career

fields. Within each of those career fields there would be four pay

ranges approximately paralleling what you would view as the case

in any work force. Let’s say there’s an entry level, there’s a journeyman, there’s an expert level, there’s a senior level. In essence,

the specific numbers differ depending upon the career field, reflecting real market conditions, and that is, I think, one of the great

strengths of pay banding. This allows us to be much more competitive in the marketplace, to offer the kind of salary we need to get

the talent the government requires.

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So we have thought that all out. The pay ranges range, of course,

across the GS–1 or GM–1 through GS–15 levels that we’re talking

about today. We, in addition, would be explicit in offering those

who take supervisory positions additional pay for the supervisory

responsibilities, which would be tied explicitly to that responsibility. In other words, it’s not a lifetime endowment. It comes with the

post. If you step out of the post, then you would surrender the supervisory pay.

Mr. DAVIS OF ILLINOIS. I see my time is up, Madam Chairwoman. I’ve got additional questions.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Davis. We may try a

second round when we finish here.

Mr. Murphy.

Mr. MURPHY. Thank you, Madam Chairwoman.

I want to first ask perhaps Secretary Chu, I was reading in a

GAO report, and I’ll quote a line here. It said, for the most part

the civilian human capital plans in our review did not contain detailed information on the skills and competencies needed to successfully accomplish future missions.

And there’s other criticisms the GAO report has. Can you comment on that? I mean, it seems to be describing that it’s not really

a clear plan in place, and so, therefore, how can one set up clear

determinations of what’s needed for employees?

Mr. CHU. Yes, sir, I’m delighted.

The GAO report has the flavor, if I may so characterize it, of

many such reports that state the issue as, is the glass half empty

or half full? And, I think the first thing to note about the GAO report, which some of your colleagues have also cited, is that it congratulates the Department for actually having such plans in the

first place. It then goes on, as you and your colleague have noted,

to suggest how we could strengthen those plans.

We do have in the Department of Defense an extraordinary effort

to identify specific skills and needs for the Department now and in

years going forward. If the desire is to incorporate that material,

which is quite voluminous, into the plan itself, that is a step we

can take. It exists, and if preference is to have it be formally part

of the plan, that is an easy step to conclude.

Mr. MURPHY. OK. I have a couple of other questions I want to

squeeze in my 5 minutes. One has to do with understanding, and

you could probably go on for hours about this, but understanding

how employees are currently evaluated so that there is fair and accurate information to help them do their jobs better or to move on

to another career if that’s better for them. And, how do you propose

changes be made that could accurately reflect that so that it will

work efficiently for them and then turn over to the pay bands?

Mr. CHU. I think we all recognize that one of the weaknesses of

the current system is that most of the rewards in the system are

the result of longevity, not the result of performance. And the intent in the system going forward, should Congress agree, is to place

the emphasis on performance, to reward high performance. That’s

something our own employees, not only in the Defense, but also in

our government, complained bitterly about, that we do not reward

high-performing employees, and as we go out and try to hire young

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Americans right out of school, it’s one of the things that they criticize us for, that we are not seen as a high-performing organization.

The intent in the future would be to establish criteria against

which to measure the individual employee’s performance that puts

a heavy burden on the supervisors to be proactive in thinking

through carefully how does the agency mission translate into what

this particular employee needs to do, and how do I be specific to

the employee in the terms of what would constitute a good performance outcome for John Doe or Jane Smith. It will be incumbent on

the supervisor to counsel employees during the course of the performance period as to how he or she is doing so that the employee

can make continuous corrections, so that the interchange at the

end of the year is not a surprise to the employee. And that’s really

the spirit that we want to bring to the system, that this really is

a matter of continuous evaluation.

Mr. MURPHY. Do you know any forms or manuals already outlining some of those things of how employees are currently evaluated

and how specific changes would compound?

Mr. CHU. We do, and I think the best ones to give you are for

the demonstration projects which already are ongoing. We’d like to

share the material with you.

Mr. MURPHY. I appreciate that another issue that’s been spoken

about is the concern that this does not become a patronage system.

Now, I understand the Department’s need perhaps to look for experts in various fields, and sometimes that is very time sensitive;

you need to get into that immediately. But there’s the concern

that’s been raised about patronage. Can you address if you share

that concern, or if not, how you would work to prevent that?

Mr. CHU. We believe deeply in the Civil Service principles of

merit and that the most meritorious individual ought to get the

post. It is important to be able to hire experts, so-called ‘‘experts’’

and ‘‘consultants,’’ in the language of the legislation, also so-called

‘‘highly qualified experts’’ in a little different category. We are seeking greater latitude to do that than the current law permits.

Part of what we’re seeking really is to deal with an issue that

the current statutes complicate, and that is how we make these individuals subject to the ethics and the conflict-of-interest provisions

of U.S. law without turning them into government employees.

Under current law, the only way we have to do that is to make

them government employees. For part-time expertise, that’s often

not the way you ought to go, but we still want them to be subject

to ethics and conflict-of-interest provisions and, hence, the language that’s in here on that particular subject.

Mr. MURPHY. Those are some of those folks you would hire for

like 5 years.

Mr. CHU. The real—the right to hire people for 5 years, including

older Americans, as my staff unkindly puts it—the intent here really is to advantage us in getting experts and consultants with the

right expertise who are subject to the ethics and conflict-of-interest

provisions without making them government employees. The socalled ‘‘highly qualified experts’’ in the words of the statute would

be people who would be government employees.

Mr. MURPHY. Thank you.

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Mrs. DAVIS OF VIRGINIA. Mr. Waxman, we’re delighted to have

you here today so feel free to ask some questions.

Mr. WAXMAN. Thank you very much, Madam Chairwoman.

Mr. Chu, you moved through very quickly and glibly the criticisms of the General Accounting Office, but they’re important because if you look at the bill itself, the bill says the new system

would be based upon the Department’s civilian human resources

strategic plan. And that plan was evaluated by GAO, and GAO

found it would lack the elements found in a fully developed plan.

I want to ask you about some of the specific criticisms.

On page 15 of the GAO’s March report, they found that the DOD

plan did not show mission alignment, meaning that the plan did

not clearly show how the civilian work force contributes to accomplishing an organization’s overarching mission. In other words,

they said DOD does not know how its employees will help the Department accomplish its goals. That’s a pretty incredible criticism.

On page 16 of its report, GAO found that DOD’s plan did not reflect a results-oriented approach to assessing progress toward mission achievement. In other words, DOD was more focused on process rather than results, and this is somewhat ironic since one of

the purposes of this bill is to give DOD the ability to pay its employees based on performance and results.

On page 15 of its report, GAO found that the DOD plan did not

contain sufficient data about work force availability and its work

force needs. In other words, DOD does not know what it has and

what it will need.

Finally, on page 22 of its report, GAO found that the DOD plan

did not address how the civilian work force would be integrated

with military personnel and contractors, and given the importance

of all three groups to the war effort in Iraq, as well as the administration’s desire to outsource more jobs, I find it remarkable that

DOD has not figured out how to coordinate civilian, military and

contractor personnel.

So what we have now is a request by GAO to endorse a strategic

plan—a request by DOD to endorse a strategic plan that the experts at GAO found deficient; and I’m asking myself why we should

rush to endorse a plan rejected by GAO. You were asked that question by my colleague, and you said, well, they made recommendations and we can accept those recommendations; but it does not

seem like you’ve done that.

For example, GAO suggested that DOD try to make its plan

more results oriented, more focused on future work force needs, yet

DOD only partially concurred in this recommendation.

That seems like a sensible recommendation. Why didn’t you accept it completely?

Mr. CHU. I think, Mr. Waxman, if everything you asserted were

true, we would not have just won the war in Iraq. The Department

of Defense has a clear——

Mr. WAXMAN. We won the war in Iraq without this legislation;

is that not correct?

Mr. CHU. We won the war in Iraq with a total force comprised

of our military and civil components. We want to be sure our civil

component in the years ahead, those who are employees of the GovVerDate 11-MAY-2000 11:48 Sep 09, 2003 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 D:\DOCS\88735.TXT HGOVREF1 PsN: HGOVREF1
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ernment of the United States, are ready and able to do the kinds

of things that those future challenges require.

Mr. WAXMAN. I asked you a specific question, and why aren’t you

more results oriented and more focused on the work force needs?

Mr. CHU. I think if any department is results oriented, it is the

Department of Defense.

Now let me, if I may, take the specific GAO criticisms. Again, if

I may start with the headline, the GAO report basically says the

glass is half empty, while also very graciously praising us for completing such a plan, noting it’s the first one we’ve done and that

it’s a major step forward.

Mr. WAXMAN. Mr. Chu, excuse me please. You can see there’s a

yellow light. We only have a limited time. What you’re saying in

effect is, it’s half empty rather than half full. GAO’s criticisms

mean that your plan is quite deficient. They have made recommendations. I’d like to know why you haven’t accepted their recommendations.

One was on more results oriented. The other was to integrate

military and civilian work force and take into account the role of

contractors. And, GAO recommended this, but DOD rejected it.

Now, I guess what I’m trying to find out is why we should be

rushed to adopt a bill that would allow you to fundamentally rewrite the Civil Service laws based on a plan that GAO says is deficient; and, after they made recommendations to correct it, you still

haven’t accepted their recommendations.

Mr. CHU. I don’t think I said that, Mr. Chairman. I don’t think

the record shows that. Let me, if I may, walk through the three

specific points you raised.

First, should there be a greater mission orientation in the plan,

should the mission be called out in the plan? We don’t disagree. I

think every single civilian understands what the mission is and

how his or her duties align with that mission. The GAO asks for

a very explicit plan. We’re delighted to do that.

Second, the GAO asks for more inventory data in the plan. We

have massive amounts of inventory data. They are stored in computer files. There is an issue of what you want to put in the plan,

which is a set of directions, a set of goals. Whether you put all that

detail in the plan, I think, is a matter of formatting and how you

want to present the information. We’re delighted to share that information. GAO knows we have that information. I think people in

this committee know we have that information. It’s all there.

Third, I think that we agree with GAO that we want to make

the criteria for its evaluation as results oriented as one can. That

becomes a matter of how you best do that in each individual case.

That’s one of the things that I think we’ve got some experience

with. We’re proud of what we do in that regard, and we welcome

the encouragement to do more of it.

Mr. WAXMAN. Just one last comment I’d make to you: If you’re

going to rewrite your plan, I think we’d be better off waiting to see

what the rewrite is going to produce before we adopt Civil Service

law changes that give you all this latitude to make the system comply with the plan that we haven’t seen in its rewrite form.

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

Ms. Norton.

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Ms. NORTON. Thank you, Madam Chairwoman.

Mr. Blair, do you believe that what is being proposed here for

DOD should be implemented for the entire civilian work force of

the Federal Government?

Mr. BLAIR. I think there will be many lessons that we can learn

for the rest of the Federal work force.

Ms. NORTON. Sorry?

Mr. BLAIR. There will be many lessons that we can learn that

will be applicable for the rest of the Federal work force.

Ms. NORTON. You would not say that we ought to put these recommendations in that we should apply these proposals, rather, to

the rest of the civilian work force? Would you?

Mr. BLAIR. I think we are moving from a ‘‘one size fits all’’ to specific, agency-tailored plans, and so I wouldn’t want to apply what

we’re doing from one agency in total on another.

Ms. NORTON. I’m glad to hear that since we’re invoking national

security as the reason for this. I don’t expect to see these proposals

in parts of the government where that is not the reason given.

Mr. Chu, in reading your testimony, I was intrigued by your

rather extensive quotation from Lou Gerstner, the former CEO of

IBM, who essentially you accept his philosophies, one, it should be

applied here; I can understand in some respects why—and you

quote him saying, nothing, however, was more important to fostering a one-for-all team environment than a common incentive compensation opportunity for large numbers of IBMers. And I was intrigued further, therefore, by what might seem a small item that

represents a larger attitude.

Why, in light of this notion that people respond to compensation,

would you propose to eliminate the requirement of chapter 55 that

employees be paid overtime for working on Sunday? How in the

world is that going to provide the kind of compensation incentive

that would make people glad to rush forward to work for DOD?

Mr. CHU. I’m glad to clarify this issue, Ms. Norton, because in

fact the reason for the language that you see is because some people who work in the overtime periods you have described actually

are worse off under the present system than they should be. So, the

language we’re seeking there is so we can be fair and just to all

our employees.

Ms. NORTON. Explain how you’re worse off in getting paid overtime for working on a Sunday.

Mr. CHU. Because the way these rules work in terms of what the

rates are going to be, it turns out for some employees you’re actually worse off than you should be if we are working with a more

modern system here, and that’s what we’re trying to seek with this

legislative change.

Ms. NORTON. What you are saying is, this employee would make

as much as he makes today and more by working on Sundays; he’d

lose nothing from working on Sundays?

Mr. CHU. We have cases now where you actually get reversals

under the current rules that we are seeking to correct with this

legislative language.

Ms. NORTON. You need to clarify exactly under what circumstances an employee loses his rights under the civilian law to

be paid for working on Sunday. That’s the kind of thing you can

35

imagine, the kind of cynicism that will breed in employees who see

that’s one of the proposals.

You say, Mr. Chu, in your testimony that there were higher levels of satisfaction in your experiments. Did those in your experiments lose their collective bargaining rights?

Mr. CHU. No, and there’s no proposal here for anyone to lose his

or her collective bargaining rights.

Ms. NORTON. But there certainly is a proposal to waive collective

bargaining rights under some circumstances, sir.

Mr. CHU. The proposal is designed to facilitate bargaining at the

national level. That is the proposal.

Ms. NORTON. I’ve no idea what that means. I sense that the proposal is rather clear that chapter 5 collective bargaining rights

could, under some circumstances, be waived. Do you deny that?

Mr. CHU. We are seeking the way the law’s constructed, and at

this point we need, in order to get the national bargaining we need,

to waive certain elements of the current language in Title 5.

Ms. NORTON. These folks in your experiments did not have those

collective bargaining rights. Did they lose anywhere any of their

due process and Civil Service rights in your experiment?

Mr. CHU. Not that I am aware of, ma’am.

Ms. NORTON. Since they did not lose what your proposal says

might be lost, one has to wonder about the value of the experiment.

Again, the important point about the experiment is that it be a

true experiment from which we can learn. I note that in there were

apparently 70,000 employees eligible; only 30,000 decided to take

part. Do you have any better statistics than that?

Mr. CHU. Ma’am, I think you misunderstand the way these demonstration projects work.

The employees don’t get to select them, unfortunately, because

many more would like to be part of them. It’s an administrative decision how many employees are covered by a particular demonstration. Indeed, the point of the April 2 Federal Register notice is to

expand the demonstration program, and we anticipate further Federal Register notices that would use authority Congress has given

us on this point to enlarge the demonstration program perhaps to

as many as 130,000 to 150,000 employees.

Ms. NORTON. Thank you, Madam Chairwoman. I see my time is

up. Thank you.

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

Ms. Watson, did you have any questions?

Ms. WATSON. Thank you very much for an opportunity.

In reading, briefly, the GAO summary, I am concerned about

moving employees around and performance based. Can you explain

to us what guarantees an employee has in the position in which he

or she would be assigned? With this broad-based authority given,

who has the bottom line, so to speak? Does the employee have protections or can the employee be moved or can the salary be adjusted if there is a performance base?

That is vague and unclear, and my interest goes to protecting

employees’ rights. Can you respond, please?

Mr. CHU. Glad to.

The whole point is—I think we all appreciate that the pay-forperformance system is that pay changes should depend on performVerDate 11-MAY-2000 11:48 Sep 09, 2003 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 D:\DOCS\88735.TXT HGOVREF1 PsN: HGOVREF1
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ance, and that is the spirit in which such a system would be administered.

Ms. WATSON. Could you yield for just a second? ‘‘Depend on performance,’’ is that going into the position or is that while the employee holds that position the salary, the pay could be adjusted?

I’m not clear on how that would work.

Mr. CHU. Let me try to clarify if I can.

There would, of course, be—as there is in any organization, when

an employee comes in, a salary set. Changes to that salary would

be based on one of two circumstances. First, if the duties are enlarged, you could in a pay-for-performance system, which is a little

different from the way it works today, add to the employee salary

in a more expeditious manner than is currently possible.

Under the current system, you have to rewrite the job description, recompete the position, which actually leads to some employees declining to be considered for expanded responsibilities for fear

they won’t win in the next competition.

Second, language on pay-for-performance pays out how benefits

of this kind would work. Pay would change based on the annual

performance review, and that review would determine what the

pay change was.

Under the kinds of safeguards we have described in our April 2

Federal Register notice, which includes establishing the criteria

clearly advanced, it includes an individual to review the post-pay

changes so it’s not just the jurisdiction of the supervisor.

Ms. WATSON. So as a followup, what I hear you saying is that

we can advance forward.

Can we also reduce the employee’s pay at the end of the pay period or the end of the evaluation, and if so, is there no protection—

if you are employed at a certain salary annually and at the end of

the review your salary is reduced, is there any protection that employee has to maintain the level on which he or she was employed?

Mr. CHU. There is the opportunity in this system—if an employee

has performed so badly that a salary reduction is appropriate,

there is the opportunity for a limited salary reduction in the pay

for performance approach that we would recommend. The employee, of course, has a right to appeal that decision. I think we all

agree that is not something that should be usual, that there ought

to have been truly something lacking in the employee’s performance. In other words, I think we all agree that if an employee has

performed badly, a salary reward is not appropriate.

Ms. WATSON. Well, I think that rather than moving so quickly,

I join my colleagues here on my left that—I think that you should

look very, very intently at the GAO recommendation before you

bring back a final proposal, because I think that some of these vagaries need to be more specifically indicated in the provisions.

Thank you.

Mrs. DAVIS OF VIRGINIA. Mr. Cooper.

Mr. COOPER. I thank the Chair. I wish I had been able to attend

the first part of the hearing, but I just got late notice that we

would be considering a subject of this dramatic importance because

it’s not every day we try to change the work rules for 600,000 people around here.

37

May I ask the Chair, we’re scheduling a markup for this, for this

Thursday?

Mrs. DAVIS OF VIRGINIA. Yes, Mr. Cooper. What I said earlier,

and I’m sorry you were not here, is that I regret very much we had

to do this hearing so hastily, but I also sit on the Armed Services

Committee, which is when I found out that the portions that we’re

having a hearing on today is actually in the bill that is being

marked up in the Armed Services Committee.

We were able to get the authority to bring this before this committee, which is where I believe the jurisdiction lies for this part

of the bill. It is not a stand-alone bill. It is the bill coming before

the Hawks, and we’re marking it up next week, which is why we

quickly had to do this hearing. And I regret we had to do it, but

I am, on the other hand, quite glad that we were able to do it.

Mr. COOPER. Well, I’m all for preserving committee jurisdiction,

but I worry that it will be at terrific cost to the livelihoods of some

600,000 individuals, because it’s hard for me to understand how

this committee could possibly do an adequate job given the short

time available. Most Members aren’t even in town today.

Mrs. DAVIS OF VIRGINIA. If the gentleman would yield, whether

we hold this hearing and whether we mark it up in Government

Reform or not, it will be marked up in Armed Services next week.

This is the only way that we will get the opportunity to have our

voices heard.

Mr. WAXMAN. Will the gentleman yield?

Mr. COOPER. Yes.

Mr. WAXMAN. I don’t quite buy that threat. If our committee told

the Armed Services Committee, this is within our jurisdiction and

they’d better stay out of it, I think that would carry some weight.

What I see is the Armed Services Committee being used as an excuse, and this committee is rolling along with it.

I agree with you, this is major, major change. We ought to be

carefully examining it before we make such a radical departure

from 100 years of Civil Service law.

Mr. COOPER. To reclaim my time, I appreciate the gentleman’s

point. As a member of the minority, it’s perhaps easier to be thinking of voting ‘‘no,’’ but I would worry for the majority because y’all

are apparently going to be obligated to vote ‘‘yes’’ and essentially

rubber stamp these changes.

Mrs. DAVIS OF VIRGINIA. If the gentleman would yield, I would

not assume anything.

Mr. COOPER. Well, I know it’s perilous to assume, and I’ll turn

my attention to the witnesses. I’m one of these Democrats that’s

open to personnel policy changes as long as there’s proven cause,

as long as we have a reasonable likelihood that they will actually

work.

I understand the gentleman from California made the point earlier, quite eloquently, that the Pentagon seems to be working quite

well these days. In fact, it seems to have worked quite well for the

last 10 or 20 years, and to consider such radical changes at this

point on such a thin or nonexistent record worries me greatly.

I understand you want a copy of the homeland security changes

that were made. Of course, it’s way too early to judge the effectiveness of those changes. I understand also that we do not have a deVerDate 11-MAY-2000 11:48 Sep 09, 2003 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 D:\DOCS\88735.TXT HGOVREF1 PsN: HGOVREF1
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tailed list of changes that you want to make, so essentially this

committee will be asked to vote on a pig in a poke, a list of raw,

discretionary policies that the Pentagon would like to make that essentially force us to give you a blank check, which is a very unusual situation for Congress.

Where is the detailed list of recommendation? It’s my understanding you haven’t even discussed these changes with some of

the union groups that are most directly involved; is that correct?

Mr. CHU. Let me, sir, if I may, briefly summarize my testimony

since, as you indicated, you were not here at that time.

First of all, this is an evidence-based set of changes. We have,

as you are probably aware, about 20 years of experience with demonstration authority that Congress has given us. We have currently

nine such demonstrations ongoing in the Department of Defense

that cover 30,000 employees; that’s the size of a small Cabinet department by itself.

We’ve spent more than the last year reviewing what we call the

‘‘best practices’’ coming out of those demonstrations to try to see if

we could propose a cohesive system to apply to the Department as

a whole. We believe we have reached that conclusion. The detail

that you’re asking for is there in the April 2 Federal Register notice that is built on the authority Congress has already given us

to extend these best practices to our entire defense laboratory community.

So we believe there is considerable evidence. That evidence is

done by others; you don’t need to take our word for it. One of the

things I would urge everyone to read is OPM’s extensive report on

the Department of Defense’s use of these demonstration authorities. It has extensive survey material that covers the attitudes of

our employees, which I think all of you properly are concerned

with—what’s going to be the reaction of the employees to this, is

this something they would endorse; and I think what these surveys

indicate is that after a transition period, which typically does take

1 to 3 years, there is a higher, often much higher, level of satisfaction on the part of the employee work force than was true before.

That’s the record on which we want to build, sir.

Now, we cannot, however, under current law do that for the entire Department. We can reach 130,000 to 150,000 individuals in

DOD under current law with these kinds of changes. We’d like the

authority to reach the entire Department with these kind of

changes. We’d be a more effective Department if we could do so.

In reviewing the history of these best practice demonstrations,

we conclude there are some other things it would be constructive

to have. One of them, we think, is national bargaining rights. The

other is a series of rights that would allow us to hire more, particularly for young individuals just coming out of school. We think we

need to compete with the private marketplace.

Mr. COOPER. I’ll do my best to do my own work in the short time

allowed. May I ask one more question?

There’s an interesting book, hardback, that’s called Boyd in the

Marketplace. It refers to a David Chu in that book. Are you the

same David Chu listed in that book?

Mr. CHU. Could you give me the title again? There’s a wealthy

David Chu in Hong Kong, but unfortunately I’m not he.

39

Mr. COOPER. This is Boyd, Air Force colonel, someone who’s very

interesting, strategist, somewhat of a maverick within the Pentagon, and he apparently testified on the same panel with you many

times, and it refers in the book to a David Chu. I just wanted to

confirm that was in fact you.

Mr. CHU. I’m not sure which book you’re referring to, sir. Therefore, it may be me, but I don’t want to be too assertive on that

point.

Mr. COOPER. I’ll check.

I thank the Chair.

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

And I’m going to beg the other witnesses’ indulgence, but given

the fact that we don’t have the time to give you our questions in

writing and get the answers back for the record, since we’re marking this bill up on Thursday, I still have a lot of questions, and I

believe my colleagues do as well; so if the other witnesses would

bear with me, I would like to have the opportunity to ask some

more questions of the first panel.

Dr. Chu, I hate to go back to you on this, but I don’t think you

answered me the first time when I talked about national security

being broad enough to be meaningful, and I asked you to explain

to me what constitutes ‘‘essential to the national security’’ and also

what does ‘‘certify’’ mean. Can you give me any definite definition

on those two?

Mr. CHU. ‘‘Certify,’’ of course, means the Secretary has to reach

a formal conclusion, so it has to be a finding on his part that there

is national security issue here. It cannot just be one of the staff

imagining a problem.

National security goes to issues in which the ability of our military forces to carry out their missions would be harmed in one way

or another if we were to reach a result different from that which

such mission might require. And so ultimately this is tied to the

military responsibilities of the Department of Defense.

Mrs. DAVIS OF VIRGINIA. No disrespect, but I think that could

also be very broad, but I’ll take that for the moment.

And I think one of my colleagues may have alluded to this, but

I respect the law and I think you do, too.

Mr. CHU. Yes, ma’am.

Mrs. DAVIS OF VIRGINIA. But you’re asking Congress to give the

administration the ability to waive the law in several important

ways. You’ve asked us for authority to change the statutory rules

that apply to almost 700,000 people—for instance, the law on overtime pay, the law on training, the law on nepotism, the law on allowances, and so on and so on. This grant of authority would be

permanent.

And in addition to those that Congress gave DHS for only a limited period of time, I want those almost 700,000 people to have the

protection of the law like everybody else and to abide by the law’s

obligation; and, due to that, that includes you and the Department

of Defense. We need to know what is wrong specifically, not generally, with these laws that would justify the authority that you’re

wanting us to grant DOD, and in my opinion, the burden is on the

administration to give us these specific answers.

Do you have them now or can you get them to me like yesterday?

40

Mr. CHU. Let me try, if I may, ma’am, a first-round answer to

provide additional material that would be helpful this week in time

for your deliberations.

Mrs. DAVIS OF VIRGINIA. Our markup is Thursday, so tomorrow.

Mr. CHU. We will get it for you. Most of the waivers in our proposal are focused on those sections of the law that basically make

it impossible to have a pay-for-performance system. That’s the

heart of much of what is being waived, and in order to get there,

given the structure of the Civil Service law, you have to waive

those provisions.

That—I recognize this is a complex way of doing this business.

It is, however, part of our effort to keep this whole package within

Title 5, as opposed to starting with a clean sheet of paper and writing everything down again in the way that a different system

might be administered.

So the waivers are there so that we can get to a pay-for-performance system; in order to get there, you need waivers from these

parts of the Federal statute.

Mrs. DAVIS OF VIRGINIA. If you could get a little more specific

than that, I would certainly appreciate it. The whole proposal is

full of phrases like ‘‘sole,’’ ‘‘exclusive,’’ ‘‘unreviewable discretion,’’

‘‘ought to be given to the Secretary of Defense and anyone he or

she may wish to delegate that authority to.’’ Is there some kind of

hidden meaning there that I’m not aware of, and/or does it mean

that the Defense Department will be able to have the liberty to act

unilaterally and without oversight and review by Congress and the

courts of this country?

And, maybe I’m reading too much into that, but I’ve read the articles in the newspaper how this Secretary wants less oversight. Is

that where we’re going with this?

Mr. CHU. No, ma’am, that’s not our intention. We always operate

with oversight of the Congress. I think you know that.

These are intended to facilitate the administrative process of actually putting in place—the system involved in some of this is to

deal with various Federal regulations and how those proceed, so

that we can move expeditiously if Congress should decide to give

us this authority.

Mrs. DAVIS OF VIRGINIA. I hope you can answer me, Director

Blair, on this one honestly and forthrightly.

What is OPM’s position on the desirability of your office having

no role, no role at all, on a number of matters involving a huge segment of the Federal work force?

Mr. BLAIR. Well, I would disagree.

Mrs. DAVIS OF VIRGINIA. I would hope you don’t give me, to, ‘‘coin

a phrase’’ here, a rubber-stamp answer because you have to support the administration.

Mr. BLAIR. Well, I would argue that we do have a substantive

role. If you look at the legislation itself, it says that the Secretary

may in regulations prescribe jointly with the Director. That is a

substantive role to have. It’s our understanding that based on assurances from the Department of Defense, there’s no intention to

cut out OPM from exercising any strategic oversight role. And I

think it’s also important to note that granting managerial flexibility is not inconsistent with the applications of the merit system

41

principles, transpreference protections against prohibited personnel

practices or whistle-blower protections.

In granting flexibility, you need to balance out the needs for extensive—for appropriate oversight and for a continuing role for the

President’s chief human capital officer, and that’s the office of

OPM.

Mrs. DAVIS OF VIRGINIA. But in case of national security, you

would be overruled and taken out of the equation; and, as yet, I

do not have a real, specific, clear explanation of national security.

And I’m not sure you can give me one, Dr. Chu. That’s not a slam

to your explanation. I’m not sure you can give one that’s not so

broad that when you’re talking about the Department of Defense

that you could pretty much say anything’s a matter of national security.

Mr. CHU. If I may, Madam Chairwoman, let me try to answer

the question in the spirit in which you asked it.

We view ourselves as partners with OPM in constructing this

new system. We have benefited enormously in terms of trying to

think through what might be the best way to proceed. The several

significant white papers that OPM has created over these last 2

years, they are terrific, they point the way ahead; and one of the

things they hammer away at again and again is the need to tie

more of compensation to performance.

That is a key part of this proposal. So we are building OPM’s

foundation. We want OPM to be our partner. We intend for OPM

to be our partner. We recognize there will be situations where

we’re going to disagree and the provision that you are asking about

would allow the Secretary of Defense to break the tie in that circumstance. I don’t anticipate that’s going to happen frequently, and

I suspect it’s going to be over rather narrow, specific issues.

Mrs. DAVIS OF VIRGINIA. Thank you, Dr. Chu. But again, I’m

agreeing with my colleagues on the right here. We’re doing this so

quickly and so fast that I cannot say that I am real comfortable.

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you, Madam Chairwoman. Let me,

if I could, ask the question you just raised a little differently.

Mr. Blair, in today’s Washington Post a spokesman for Director

James stated, that ‘‘Director James absolutely supports the administration’s DOD legislation.’’ Then it goes on to say that a professor

of public administration from the University of Southern California

is quoted as saying that ‘‘OPM would be weakened to the point

where it would have no central personnel coordination with much

ability to facilitate cutting edge progress in the field.’’

Are you testifying that the position or the role of OPM will not

be weakened with this legislative enactment?

Mr. BLAIR. No, I think it would be entirely inaccurate if we try

to characterize his proposal as anything but what it is. It is a significant proposal. We’re talking about creating an independent system for the Department of Defense. It’s a system covering 635,000

employees.

Is it going to impact governmentwide? Of course it is. And I

think that we need to be honest in our approach on that.

Does DOD make the case they need managerial flexibility? Absolutely, absolutely they do, and they have 20 years of experience—

42

in their demonstration projects, in pay banding, in pay for performance—making the case that they need managerial flexibility.

OPM’s role is evolving, and we will—this will make our role

harder, more difficult in terms of exercise of oversight. It might,

but making our role more challenging is not a reason to deny the

flexibility to the Department of Defense.

I think that Congress needs to carefully look at the proposal,

evaluate it and make sure—I mean Dr. Chu’s testimony quotes

from the Volcker Commission, and that report recommended agencies having tailored systems, and we endorse that. But that presupposes continued OPM-OMB oversight and that’s something we

think is important, and we think that can be consistent with this

legislation.

Mr. DAVIS OF ILLINOIS. So we’re going to put DOD in a class by

itself; I mean, we’re going to set it aside, it looks like to me, and

put it in a class of its own.

Let me ask you, Mr. Chu, in your testimony, you quoted from the

Volcker Commission; and the Volcker Commission report also

states that what is clear is that a new level of labor management

discourse is necessary if we are to achieve any serious reforms in

Civil Service. The commission believes that it is entirely possible

to modernize the public service without jeopardizing the traditional

and essential rights of public servants; engaged and mutually respectful labor relations should be a high priority.

You stated that you did not engage labor in the development of

this legislation because the dialog with the unions would be more

focused once the legislation was complete.

And given the circumstances, being marked up by Congress, do

you consider the process you described in your testimony as ‘‘engaging labor management in mutually respectful dialog?’’

Mr. CHU. Sir, I think we need to go back to the foundations of

this proposal.

The demonstration projects, which are the basis of our recommendations, have had extensive employee—and I would emphasize ‘‘employee’’; this is not just a matter of labor union input, but

extensive employee input. We’ve also taken very seriously what our

employees have told us through their survey responses, both the

surveys that OPM has done of the demonstration projects, the surveys that OPM did of the entire Federal Government just published, independent surveys by institutions like Brookings’, and

others’ language. We listened to what our employees had to say.

We ourselves personally spent time with our employees to understand what is of greatest import to them.

So this is a complex process of trying to listen to all the different

voices out there, to try to hear what they’re telling us. And what

they’re telling us and what the young people of the United States

are telling us in terms of considering a government job is, they

want this to be a high performing organization.

Mr. DAVIS OF ILLINOIS. I think what you’re telling us is that you

have not chosen to listen to labor at all because you decided not

to include them in the proposal until after it’s done.

I think, listening before the fact is far more effective than after

the fact, because trying to change it once it’s been done and accepted becomes very difficult. And I appreciate your position, but I

43

think it would have been more effective if it had been done up

front, rather than after the fact.

And I thank you, Madam Chairwoman.

Mr. CHU. If I may, Madam Chairwoman, we have listened—if I

may emphasize, we have listened to our employees and labor,

which is different from labor unions. It is employee input, employee

reactions that are the foundation of trying to decide what’s the best

way to proceed.

Mrs. DAVIS OF VIRGINIA. I’m going now to our ranking member

of the full committee, Mr. Waxman.

Mr. WAXMAN. Thank you very much, Madam Chairwoman.

As I understand, the whole purpose of this bill is that you think

there ought to be a way to waive a lot of the rule of Civil Service

in order to have a performance-based Civil Service system working

at the Defense Department. Is that what this is all about?

Mr. CHU. Sir, I think where we start from is that we need a more

flexible, more agile personnel system than we have under the current rules under which we operate most of the Department. In

order to get there and to keep the structure of the system within

Title 5, you have the somewhat complex language which has been

the subject of this morning’s debate.

But what I would emphasize is, the purpose, the end point here

is the kind of flexibility of the hiring speed, kind of rewards performance that are embodied in our April 2 Federal Register notice.

That’s the end point that the statutory changes are designed to facilitate.

Mr. WAXMAN. Do you see any reason why what you’re asking for

should not be given to every other department of the Federal Government? They all want the agility, the flexibility, to develop a system that will not in any way impede them from getting to the best

performance possible. And to do that, they may think they also

should be able to waive the provisions of the law that have been

in force for many decades that have hamstrung them.

Maybe Mr. Blair should answer that question. Why shouldn’t

every Department have the power that DOD’s going to get?

Mr. BLAIR. I think that DOD is seeking some certain flexibilities

that could be applicable governmentwide. Again—I think Ms. Norton asked that same question earlier—that would be, we’d have the

same system for DOD and applied governmentwide; and my answer was, I think we need to more narrowly tailor it.

As far as hiring flexibilities go, I think—I was going to say with

regard to——

Mr. WAXMAN. Rather than getting into details of this, because we

know some of the details, and rather than go through them, you

have an overall scheme here that allows the Department of Defense to waive not only the personnel provisions that were granted

to Homeland Security, but in addition to that, 12 major chapters

of Title 5 that have been developed over the past century to prevent Civil Service from becoming a patronage system, such as a

performance appraisal system, a pay raise position classification

system, collective bargaining rights, due process and appeals

rights.

And then DOD, beyond that, wants to waive six other chapters

that are not waivable in Homeland Security, hiring, examination,

44

reduction in force, training, pay administration, allowances. Then

they want to also have the ability to bring people back, so they

don’t lose their pension, but they can work for the government at

the same time. You can hire relatives, all sorts of things like that.

Why shouldn’t we have that for homeland security? If you have a

tie between the Secretary of Homeland Security and OPM, which

is an unusual notion to tie, why should not the Secretary of Homeland Security trump the OPM?

Mr. BLAIR. As you know, with Homeland Security, that was an

extensively debated bill that went through the legislative process;

and the final bill represented the administration’s interests as well

as the congressional—Congress’ interests. I would expect that this

legislation is going to go through the same process.

Mr. WAXMAN. Well, I’m asking you your position as we go

through the process. Why not extend to Homeland Security all the

provisions that you’re willing to give up to the Department of Defense?

Mr. BLAIR. At this point, we don’t think Homeland Security is in

need of those other—those additional flexibilities at this time, especially since we haven’t designed the system for Homeland Security.

Mr. WAXMAN. GAO is arguing that the Department of Defense

has not designed its performance standards yet, and therefore we

ought to wait until it comes up with a game plan for how it’s going

to achieve those performance standards before we give them blank

authority to go out and start waiving all these rules.

Now, Mr. Walker testified, I believe, that a vast majority of Federal agencies do not have the infrastructure in place in order to effectively and fairly move to a more performance-based compensation system. And this is what bothers me. We’re moving not nearly

as rapidly as we did with Homeland Security where, you say, we

had a thorough consideration; here we’re given at least 2 days.

Now, I was also concerned, Mr. Chu, about this question of scrutiny. We’re trying to give as much scrutiny as we can, but the bill

we’re considering expressly states that any personnel regulations

promulgated by DOD would be internal rules of the departmental

procedure. That language appears to be intended to exempt the

regulations from public notice and comment requirements of the

Administrative Procedure Act and, in a sense, taking away any

public scrutiny. If you really look at public scrutiny while you are

exempting your regulations from notice and comment.

Mr. CHU. Most of these provisions, sir, are parallel provisions in

the Homeland Security Act that you cited earlier.

Mr. WAXMAN. So you just modeling what you’re doing on what

they did?

Mr. CHU. The basics—as I testified, sir, the basic structure of

this bill follows the structure of the Homeland Security bill. There

are some provisions that go a bit further than the Homeland Security bill, as my colleague, Mr. Blair has emphasized, in order the

try to tailor it to the specific circumstances of the Department of

Defense.

Mr. WAXMAN. Well, I don’t—I’d like to know why the Department

of Defense needs to say that hiring relatives or political favorites

is an appropriate practice.

45

Mr. CHU. I don’t believe, sir, that’s what we’ve said, as I’ve tried

to emphasize.

Mr. WAXMAN. Well, if you have the ability to waive chapter 31

that prohibits the hiring of relatives and political favorites, that

means you have the ability to do it. Why should be able to waive

that rule, for example?

Mr. CHU. As I have tried to explain, sir, we have tried, just as

Homeland Security did, rather than write a new title of the Federal

Code, to keep it within Title 5. In order to keep it in Title 5, given

the extraordinary accretion of provisions over the decades in that

code.

Mr. WAXMAN. Homeland Security did not waive this provision;

this is now Department of Defense. Why does Department of Defense need that, and, while I’m asking, why does Defense need

waivers from the rules and chapter 75 relating to the due process

rights for employees subject to suspensions, to motions for dismissal? Are you saying it’s OK to arbitrarily discipline employees without giving them due process rights?

The Homeland Security agency does not have that power to do

what you were to have the power to do. What’s unique about you?

Mr. CHU. The need here, sir, is, if we’re going to have a system

that indeed rewards performance, you do have to change some of

the things—these are parts of title 5, which make it impossible to

get to the conclusion I think most observers believe we should

reach. We could have started with a clean sheet of paper, it might

be easier to see how the protections are carried forward; but we did

try very hard to keep this within Title 5, that was the intent here,

and to follow as closely as possible the Homeland Security template.

Mr. WAXMAN. My time is up. I thank you, Madam Chairwoman.

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

Mr. Murphy.

Mr. MURPHY. A quick question first. Do you anticipate any cost

savings from this reorganization 1 year, 10 years out?

Mr. CHU. This is not a cost-driven proposition. It is an effectsdriven proposition. It’s an effort to make sure that we have the

kind of civil servants we’re going to need in this Department in the

years ahead. I would hesitate to estimate whether this will cost

slightly more or slightly less; it’s not intended to cost a lot more,

but neither is it the intent to save money.

Mr. MURPHY. Thank you.

And, Madam Chairwoman, just a request: I notice on pages 7, 8,

9 10 of this bill there’s extensive comments on information being

sent back to Congress after conferring with labor representatives

and getting that back to us.

I would hope that you and subcommittee Chairman Davis would

also make sure that’s done very promptly with some details, allowing us to comment on these things instead of getting a report and

not being able to comment.

And with that, I yield back the balance of my time back to you.

Mrs. DAVIS OF VIRGINIA. I just want to go back, and Director

Blair, when you responded to one of my colleagues here, I wrote it

down so I could quote you.

46

You said, ‘‘We need to carefully look and evaluate this proposal,’’

and I think that’s where the rub is on this whole thing. You know,

you said that we’ve really fleshed out the Department of Homeland

Security. Well, the Department of Homeland Security went through

four or five or six different committees, and they had four or five

or six or maybe even more hearings.

This is it, guys, for this particular part of your bill. This is the

only hearing. This bill will be marked up on Thursday in Government Reform; and the markup in Armed Services, there’s no hearing, and that’s where I think the real rub is coming from with some

of us here.

I know my problem with it is that there’s just so many questions

that I’m not anxious to run forward and vote for something when

I just do not know what it’s going to do to approximately 700,000

people.

And pay for performance, Mr. Blair, you and I had a little discussion about the horse and the cart and the carrot. And, I know that

you’ve had demonstration projects, Dr. Chu, but still, as we discussed, you do not want to put that carrot in front of that horse

if that cart ain’t hooked up right, and that’s the scary part of this.

Mr. Blair, the proposal allows the Department of Defense to hire

any retiree, pay him or her their full salary in addition to the annuity paid by OPM. This basically gives DOD a free hand to offer

retirees their full salary combined with full annuity with none of

the strict limitations that are part of the current governmentwide

statute.

Don’t you think this is going to present some situations where

retirement-eligible employees anywhere in the government would

be able to acquire, effectively, a pay raise equal to the amount of

their annuity, 50 to 80 percent of their salary, and would also provide DOD with a remarkable recruiting advantage for highly experienced talent in other agencies?

Not saying that DOD does not need the talent, and they do; trust

me, I probably support defense more than any issue on Capitol

Hill—and, Dr. Chu, you know that—but I don’t want to be unfair,

and that’s where my concern is on this particular issue.

It does not sound like a good, sound public policy to me to give

that to DOD and not other folks. And how does OPM feel about

that?

Mr. BLAIR. Let us remember what the trend has been on this

that we currently have the authority on a case-by-case basis to

waive the offset to the salary for reemployment of annuitants. I

think it was 3 years ago Congress allowed retired military to collect

their full pension and work for the government; before that, it was

subject to an offset. So this seems to be part of the continuum of

recognizing that we need to bring people back into service who

have worked for the government.

Mrs. DAVIS OF VIRGINIA. Why not make it governmentwide?

Mr. BLAIR. That’s an interesting question, and I think at this

point, we’d like to look to see how this proposal would work. Remember that OPM’s a steward and has a fiduciary rule with regard

to the Civil Service Retirement and Disability Trust Fund, and we

carry out those responsibilities with quite a bit of gravity and we

look at these proposals with a sharp eye to make sure that it’s not

47

going to add—what we wouldn’t want to do is add to the unfunded

liabilities or create unintended consequences for what could be a

very good and sound proposal.

I think that we want to see what kind of experience we have in

this before we extend it governmentwide, but I would defer to my

colleague for the specifics with regard to why his needs would be

in the DOD work force in bringing back annuitants.

Mrs. DAVIS OF VIRGINIA. Is this going to affect the retirement

fund?

Mr. BLAIR. It should not at this point other than you might have

more people retiring early in order to get the salary.

Mrs. DAVIS OF VIRGINIA. I would.

Dr. Chu, do you have any comment?

Mr. CHU. I thank you, Madam Chairwoman. I’d hoped to speak

to this.

First, as I think you do know, these would be term appointments,

basically; it’s not open-ended.

Second, just as my colleague Mr. Blair indicated, this is a power

we’ve already been given regarding retired military personnel who

can be rehired without damage to annuity; and I think the record

will show we have been careful in using that power. We have not

abused that power. We actually keep in my office special indicators

about that power to be sure we’re being careful about that, and we

would continue to manage any additional authority Congress gave

us in just the same manner.

Third, and here’s really the reason we want to do this: As everyone has underscored in other hearings, we are, throughout the Federal Government, facing a human capital crisis in the sense that

up to half of the Civil Service, really over the next 10 to 15 years,

is going to retire. We have not hired that replacement generation,

and we are very concerned in the Department of Defense about all

the experience that’s in the minds of those people who are now

going to leave the work force and who might be willing, on a limited term basis, perhaps not full time, but part time, to come back

and help us with that transition, to serve as the mentors for the

young people we intend to hire to replace them, to serve as the experienced hands who really know how the system operates.

I’m reminded in this regard of what happened in the New York

City subway system when John Lindsey let everybody retire who

was a seasoned mechanic, and what happened is, 3 years later,

subway performance plummeted because not everything was written down in the technical manual; it was in the heads of those experienced workers.

And what we want is the ability to reach those workers on a limited basis so we can benefit from their knowledge, benefit from

their wisdom and ensure the future security of the United States.

Mrs. DAVIS OF VIRGINIA. I do not disagree with you on that, but

I do want to be fair; that’s my big concern here.

My time is up and I’m going to go to Ms. Norton.

Ms. NORTON. Thank you, Madam Chairwoman.

Mr. Chu, I note that one of the proposals in the bill would allow

a waiver of the rules, Civil Service rules, that require that reductions in force have to be based on tenure or on event of service or

efficiency performance ratings. None of those would be required if

48

this rule were waived. It sounds, I think, to the average person like

the very definition of arbitrariness.

Some of us really wonder how in the world race, a tremendous

problem of the Federal Government for the entire history of our

country, not to mention gender, ethnicity and other discrimination,

is going to be also blocked if in fact we waive virtually every basis

for reduction in force you use today. If not these, what in the world

will we use to decide who to eliminate from the Federal Government?

Mr. CHU. Thank you. I’m delighted to respond to this because I

think there’s a serious misunderstanding here.

The reason for the waiver is, we can in fact make performance

the primary basis of sorting through our work force if that sometimes does happen.

Ms. NORTON. But you have a performance management system

in place according to the GAO. How would you measure performance, sir?

Mr. CHU. I do not think that’s quite what the GAO said.

Let me first, if I may, deal with the waiver issue. The intent here

is in fact to deal with what so many critics of the Civil Service have

noted, which is that reductions in force today are driven almost entirely by tenure. They are almost invariably not with respect to

performance.

I think everyone agrees that is backward, the emphasis needs to

be on performance first. That’s the purpose of the waiver, so we can

get to that.

Ms. NORTON. Of course, Mr. Chu, the reason for that, and all of

us would agree that the way to lay off people in the world you’re

talking about would be by performance, so why do people go to tenure?

But you, of course, would have waiver of performance ratings, as

well. But, why do people go to tenure? They go to tenure because

in the 100 years of Civil Service nobody’s been able to come up

with anything other than arbitrary ways to otherwise lay off people.

I would be the first one—I have run a troubled agency; I have

seen what tenure can do. But for the life of us, Mr. Chu, maybe

you’re smart enough, but nobody’s been able to come up with a system that is objective and that would not result in arbitrariness.

I want to know what in your system would keep us from arbitrarily laying off people who had in fact shown good efficiency or

had good performance ratings in place of others who perhaps had

not, particularly in light of the fact you do not have any performance management systems in place now, according to the GAO.

Mr. CHU. I don’t think that’s what the GAO quite said. Let me

go to your central concern, which is, can the Department of Defense be fair and performance oriented in any reduction in force.

And let me point to the great historical experience in front of all

of us which I personally lived through, and that is, we shrank the

Armed Forces, the uniformed force of the United States, by several

hundred thousand people in the early years of the 1990’s. And we

did it with a non-tenure system. We did it with a system that was

performance oriented.

49

I think this is a department that does know how to construct the

safeguards we need in this regard, that does know how to manage

a reduction in force, that is performance oriented and has done so

on a scale that far exceeds anything that’s at stake in this particular piece of legislation.

Ms. NORTON. I just want the record to show what you say; that’s

not quite what GAO said.

At the same time, these projects relate, and related DOD efforts

involving less than 10 percent of DOD’s civilian work force in expanding these concepts to the entire Department will require significant effort and likely need to be implemented in phases over

several years.

Let me ask you, and try to make a distinction between labor and

labor unions—frankly, I would never have asked this question

without your answer.

You said we have not talked to unions, but we have talked to

labor. You’ve got to find out who labor is. Are you saying that the

workers you talked to, the workers in these projects, were not in

unions.

Mr. CHU. No, I’m not saying that, ma’am; and I do not think I

quite said we haven’t talked to labor unions. We have had discussions with labor unions on a variety of these issues.

Ms. NORTON. And you have consulted with labor unions in the

way that the law now anticipates?

Mr. CHU. I believe the question that was asked is did we invite

the labor unions to participate in the design phase; and the answer

is no, we did not invite the labor unions to do that. We did extensively, through a variety of means, listen to what our employees

had to say about the system.

Ms. NORTON. Including representatives of labor unions.

Mr. CHU. To the extent they are our employees, of course.

Ms. NORTON. So you did talk to labor unions who have been——

Mr. CHU. No, we did not. I’m not trying to be semantic about

this.

Ms. NORTON. It sounds that way, sir. I just wanted to know if

you talked with the people who’ve been elected by the employees

to represent them in labor management consultations.

Mr. CHU. As I testified, we drew this up based on a wide range

of materials. We did not, however, undertake a formal consultation

with our unions over the design of the system. That’s an issue——

Ms. NORTON. So the answer is no. And we ought to, you know,

you ought to say that. You haven’t talked, you haven’t consulted

with your labor unions, and there’s no way to slither out of that

except to say you haven’t done it. And the fact is that you are making these kinds of wholesale changes in your work force, and you

expect them to be accepted and carried out by a willing work force.

You must not have read closely the very private—the very private

employer treatises you refer to in your testimony, because one of

the reasons that American business succeeds, even when it did not

have trade unions, is its understanding of the need to get work out

of the only people who can do it, which is the people who work for

you.

I just want to say one thing before I close out, Madam Chairwoman, and that is about the notion about no notice and comment.

50

The notion that we would attempt to do—that—the hubris, the outrage of attempting to affect this kind of large change without notice

and comment is so reckless, so irresponsible, as to be completely

unbelievable. When I came to the Equal Employment Opportunity

Commission, it had interpreted the law to mean that it didn’t have

to under the APA do notice and comment. But I knew that I could

protect myself best by, in fact, putting everything I was going to

put into regulations out there to comment. Comments tell you—you

can ignore 90 or 100 percent of them, but they tell you things you

don’t already know. The people who were most appreciative of my

putting EOC under the APA was the business community, because

they got to tell me things about how business has to operate in—

under a law which requires equal employment opportunity, and

whether or not what I was suggesting was practical or whether it

was simply going to blow up in my face.

And, if I may say, about the worst thing in these proposals is

this language which says we don’t have to talk to anybody but ourselves; we don’t have to talk to the Congress, we don’t have to talk

to the public, and we need only to gather in a room by ourselves.

That is the way they do things in authoritarian societies. They

don’t do things that way in open democratic societies. And, that one

section ought to be reason enough to turn back this proposal.

Thank you, Madam Chairwoman.

Mrs. DAVIS OF VIRGINIA. Can we have order, please? Mr. Van

Hollen.

Mr. VAN HOLLEN. Thank you, Madam Chairwoman. I do think

what you gentlemen, what the administration’s asking us to do

here is extraordinary.

Mr. Chu, you mentioned the underlying purpose of this was to

create more flexibility and agility. And those are great—they’re

great buzzwords. I mean, who can be against flexibility and agility,

except when you turn to think about what exactly that means in

practice? I mean, we have ethics rules that govern the Congress.

It would make it a more flexible place if we got rid of them. Rules

are in place to provide greater fairness. Rules are in place to protect, as Mr. Waxman said, against nepotism and political favoritism. So, no doubt about it,WE can give you greater flexibility and

greater agility by throwing out all the rules and letting you do

whatever you want. That doesn’t mean you have a system that’s

more fair and a system that protects the American public. In fact,

what this would allow, would it not, is any new Secretary of Defense could come in, you’ve given the power to the Secretary of Defense to rewrite the rules. Wouldn’t that be allowed under this legislation?

Mr. CHU. This legislation does not really envisage the frequent

rewriting of the rules.

Mr. VAN HOLLEN. Mr. Chu, let me just interrupt. I’m not asking

what it envisions. I’m asking if that would be allowable under this

legislation. If we pass it, doesn’t it give the next Secretary of Defense the authority to essentially come in and create whatever new

system they want to create?

Mr. CHU. This does give the Secretary of Defense flexibility,

much as the country has given him flexibility on a wide variety of

other issues. It is not without its safeguards. I think there are

51

plenty of procedural safeguards there, both in the administrative

practice of the Federal Government and in the statutory language

that is proposed. So I think there’s plenty of opportunity—there’s

plenty of oversight opportunity for the Congress, which really is ultimately the chance to dialog with the American public about

what’s the best way to proceed.

Mr. VAN HOLLEN. Well part of what—part of the rules that exist

today are the result of that dialog between the American public

over a period of time. That’s how they got there and that’s why

you’re seeking to change them. And those were put in place over

a long period of time. You’re asking them to overturn them in a

short period of time.

Let me just say I think one of the best measures probably is the

performance of the Department of Defense as an institution, and

both of you gentlemen have said that you consider it one force; that

the military force together with the civilian force, one supporting

the other, and they’ve done an excellent job. And I, as I think—as

I understand the chairman of the committee said earlier, I think

what we saw in the prosecution of this war in the Gulf is probably

the best test of performance.

So, I do find the timing here a little strange, having gone

through what by any measure, whether people supported the war,

were against the war, or wanted to do it later, everyone agrees that

the American military forces and the support that they received

from the civilians at the Department of Defense was exemplary. So,

I find it strange that at this particular point you’d be coming in

and saying we need to change it.

Let me just ask—I would like to ask Mr. Blair a question because I thought we also had a great hearing between the House

and the Senate committees, just a short period of time where we

reviewed this whole question of pay-for-performance and review.

And at that time, one of the key things that was raised by GAO

and was raised by others was that in the Federal Government we

do not have in place in many agencies a system now that we could

use to, say, provide a measure against which we want to improve

in terms of these performance systems. And, I asked Mr. Blair during that hearing and his testimony from that time, on page 7, we

asked him to point out a couple of Federal agencies that had done

well in terms of developing successful performance expectations of

managers and strategic plans and mission objectives. The Department of Defense wasn’t on that list. I mean, the two agencies he

said made some progress in these areas were the Department of

Energy and the Department of Labor. So I guess I’d ask you, Mr.

Blair, why, if we talked about—we’ve talked about pilot projects,

we talked about beginning small and seeing how it worked—and

the two agencies you identified were not, you know, did not include

the Department of Defense—why, if we want to really get going on

this and get our sea legs, why would we start with one of the biggest Federal agencies in the United States Government?

Mr. BLAIR. Well, let’s remember, that wasn’t an exhaustive list.

Mr. VAN HOLLEN. I asked you, Mr. Blair, at that time, based on

your testimony, for examples and you did not provide any others.

Mr. BLAIR. I provided those two examples and we can provide

more. But that was not an exhaustive list. And keep in mind that

52

DOD does have 20 years of experience in pay banding which inherently has performance factors in it, along with other pay-for-performance fact—experimentation that have been going on in the Department. You come to a point where you realize it’s no longer

worth demonstrating; it’s worth implementing, and if it’s good for

one component within the Department it may be good to spread it

not only department-wide but governmentwide as well.

Mr. VAN HOLLEN. Mr. Chu, I’d like—I mean, I think you raised

a point that I think all Members would agree on with respect to

the importance of maintaining the expertise and the knowledge

that we’ve accumulated over the years. And my question to you is,

I’m sure that we can think of a way to safeguard that information

to provide a mechanism where the Defense Department can retain

the accumulated knowledge of its employees without the kind of

wholesale immediate changes that we’re talking about today. I

mean, I’m sure that given your experience, if you were tasked with

addressing that issue specifically, you would be able to identify

ways of doing that without the wholesale changes you’re talking

about. And I wonder if you have any idea specifically on those

issues how we could address those.

Mr. CHU. I think, sir, indeed the provision on what my staff

keeps calling ‘‘older Americans,’ is a narrowly targeted provision to

deal with this question of human capital and the great human capital shift that is about to occur, and so it is a term appointment.

There is a limit to how long an individual could hold this appointment. It mirrors the decision by the Congress several years ago, as

Mr. Blair testified, to allow military annuitants to work for the

Federal Government without damage to their annuity.

I think what we envisage, frankly, is that these will often be

part-time situations. They are opportunities for us to keep as mentors, as guides for the new generations, great figures of the present

generation.

Mr. VAN HOLLEN. Thank you, Madam Chairwoman.

Mr. OSE. Thank you, Mr. Van Hollen. And you gentlemen have

been very patient, as have our other witnesses. I want to thank

you, but I do want——

Mr. COOPER. Would the Chair allow me?

Mrs. DAVIS OF VIRGINIA. Oh, I’m sorry. I thought you left. Mr.

Cooper, I didn’t see you come back.

Mr. COOPER. It’s just like a bad dream.

Mrs. DAVIS OF VIRGINIA. No, you’re fine. I just didn’t notice you

when you came back. I apologize.

Mr. COOPER. I’m pretty moderate and I think I’m slow to anger,

but this is a truly amazing hearing. I tried to review the testimony,

the OPM testimony. It was actually fairly easy to review. And, I

almost wondered, since it was so thin, why OPM bothered to submit it. I read the Washington Post this morning, and one critic

called OPM a toothless chihuahua. I think we’ve heard the toothless chihuahua try to bark in that testimony.

I wonder if you’re so willing to cede what one-third of your jurisdiction—why you don’t resign in protest or why you don’t, you

know, have something more significant to say at a historic moment

like this. And, by the way, where is the Director? You know, what

is OPM there for? Maybe we should just go whole hog and repeal

53

OPM. You know, it is amazing to me to see so little response from

OPM.

Mr. BLAIR. I think you’ve asked several questions that we could

discuss for several hours. Let me start—it almost promotes a visceral reaction on my part when you say that where are we—I’ll tell

you where we are. This proposal should surprise no one. We’ve

been talking about Civil Service reform for 20 years. We’ve been

talking, we’ve seen over the past decade, agency by agency, first

the banking agencies, then FAA, IRS, Homeland Security, all seeking flexibility from our current rigid rules. And every time they

come up, people act surprised and say, we don’t—you know, what’s

happening here?

I’ll tell you what’s happening here is that when we operate under

100-year-old rules, agencies no longer can adequately—not adequately; agencies chafe and find ways of going around and circumventing—not circumventing, but find ways of operating within

the system that was not designed for the 21st century. So at

OPM——

Mr. COOPER. If I can reclaim my time. I’m afraid the Chair has

me on a very short leash. I might be of the canine variety, too. But

we had very little notice of this. I think it was submitted to the

committee April 10. I traveled with the Chair of the full committee

for 3 days during the recess. He at no point mentioned this was

going on. I am a studious person. I do try to do my homework. This

is an appalling procedure.

As for Mr. Chu, as I say, I do try to do my homework and the

Boyd book—and I realize that’s just one reference; that book pretty

systematically questions the credibility of a David Chu of the Pentagon who is—and this is a quick cite here, head of programs and

policy at DOD. Would that be this Mr. Chu? You testified, I believe,

either concurrently with a Mr. Spinney and a Mr. Boyd repeatedly,

and you always denounced their testimony as historical and irrelevant, at least according to this one book. Now the book suggests

that, sir, you were serious and systematically in error.

Mr. CHU. I think you are referring then to Colonel John Boyd,

and you’re referring in fact to my tenure as Director and later Assistant Secretary of Defense for Program Analysis Evaluation. I

think that tenure gives the lie to the accusations Mr. Boyd makes,

but Mr. Boyd obviously is a partisan to that battle. And yes, I did

question the assertions that he and his colleagues were making.

Mr. COOPER. The conclusion of this book just—and I don’t have

the page number so excuse me: Boyd and Spinney were at the

heart of the Pentagon reform effort that got squelched in large part

by Chu.

So at least to some folks on this committee who are trying to do

their homework, your credibility is in doubt at least on some Pentagon reform issues. Perhaps you’re a genuine reformer on this issue.

I hope so. I look forward to the full committee having the time to

seriously look at this proposal. But if you have, in fact, been working on it for a long period of time, for us to be presented with it

April 10 and be expected to vote on it, finally, forever, by what,

May 1, this is a seriously flawed process if you believe in due process. And that’s what some of us are wondering on this side, whether you believe in fair process for your own employees. And that’s

54

a serious allegation, but this is a serious time when a proposal of

this magnitude is brought up and expected to be rammed down our

throats in short order.

That is not fair play. That is not what this country is supposed

to be about, especially in view of the magnificent performance of

the Pentagon and its troops working in a coordinated fashion in

this most recent conflict and in most all recent conflicts. It’s a seriously challenging time and I—it’s little wonder there are so few

members of the majority attending this hearing. They’re embarrassed to be here and see this kangaroo court process go on. And

I’m not a severe partisan. I’ve often voted with Republicans on

issues. I’m not particularly close to organized labor. But this is appalling. And you are party to it again.

So, as I do my homework, hopefully, I will see other references

to David Chu, but this is not right. And, I hope that we will see

greater fairness and hopefully a more lenient schedule on the part

of this committee, because again you’re buying jurisdiction for this

committee at the cost of this committee becoming a rubber stamp

for an unfair process.

I thank the Chair.

Mr. CHU. Could I respond, Madam Chairwoman?

Mrs. DAVIS OF VIRGINIA. Yes, you may.

Mr. CHU. I think I would like to reassure you, sir, about the

schedule. The schedule is not just one of weeks or months. As my

colleague Mr. Blair has testified, it is a schedule of years. We are

not the first to reach these conclusions, either within the Federal

Government or outside it. The Volcker Commission, chaired by one

of the most distinguished public servants this country has ever

seen, has reached similar conclusions. We are in the spirit of those

proposals.

Mr. COOPER. Has he endorsed your reform effort? You’re using

Chairman Volcker’s name. Has he endorsed your legislation?

Mr. CHU. We have not asked him for endorsement but we

have——

Mr. COOPER. Don’t use his name unless you know you have his

support.

Mr. CHU. I believe, sir, a fair reading of his report would indicate

that this proposal is in the spirit of his report. And that is——

Mr. COOPER. Well, that’s for him to judge, not you.

Mr. CHU. It’s for all of us.

Mr. COOPER. If you want to be fair.

Mr. CHU. It’s for all of us to judge. And what I want to emphasize is, as Mr. Blair has testified, this is the culmination of a long

series of events in which the entire Federal Government wants to

move forward. Our challenge is not just whether we won the last

war. Our challenge is whether we’ll win the next war, and that’s

why we need these powers.

Mr. COOPER. If this is the culmination of a long series of efforts,

why are we given so little notice? I’ve attended every briefing I

think the Pentagon’s had. I’ve appreciated the meetings with Secretary Rumsfeld. He’s done many things wonderfully well. But this

was not mentioned in any form in which we could study it or chew

on it or learn about it and we have duties as representatives of the

American people to try to do the right thing, and to have orderly

55

procedures here so that we’re not members of a kangaroo court expected to rubber-stamp whatever the latest administration whim

is.

If you thought this proposal could stand the light of scrutiny, you

would give the American people a full and fair opportunity to examine it and to do the right thing. But, you are systematically denying the American people that opportunity. Let’s have hearings.

Let’s have the sort of scrutiny that other proposals have gone

through, such as the homeland security proposal. But, this is not

going to be eligible to receive that sort of scrutiny. You want to do

this as quickly and as silently and as stealthily as possible. And,

that leaves us with the only alternative, hoping and praying you’re

doing the right thing.

Mr. CHU. Sir, if I may respond.

Mrs. DAVIS OF VIRGINIA. OK. And the gentleman’s time has expired but we’ll let Dr. Chu respond.

Mr. CHU. I’ll try to do so briefly, Madam Chairwoman. Thank

you for the chance. The Secretary has been quite public in speaking

to this issue for many months, about the need for reform. We are

not trying to do this secretly or silently as you suggest. We are

open about this. I have met with all manner of representatives of

the public in terms of explaining why we need change and what

kind of change we need. We welcome the scrutiny that you want

to give this proposal. We think it is an excellent proposal and we

need your assistance.

Thank you, sir.

Mrs. DAVIS OF VIRGINIA. I think Director Blair would like to say

something.

Mr. BLAIR. Thank you, Madam Chair. Regarding the article in today’s Post, if for argument’s sake you wanted to accept the premise

that—and I emphasize for argument’s sake, you want to accept the

premise that the purpose behind this is to get out from OPM rules,

I think that argues against a toothless chihuahua approach that

you just mentioned; that if in fact the purpose behind this is to get

out of OPM, get out from under any kind of OPM oversight, it’s because we exercise such oversight diligently. Now, I don’t buy that

proposal. I don’t buy the proposal or the purpose behind that is to

necessarily get out from OPM. I think the purpose is to—that the

Defense Department truly believes that they need to have the autonomy to operate more efficiently.

That said, however, there is a role for OPM and the role for OPM

is one that will be decided by this committee. And so I would argue

that any type of legislative changes they go through do go through

a process and you have the opportunity, and you have your input

on that.

Mrs. DAVIS OF VIRGINIA. Thank you, Director Blair.

Dr. Chu, you prompted me to say something here and I’m just

going to have to say it. No. 1, I think you can see that we all on

this, I believe, that are here today are very concerned about the

speed in which this has had to go through. And quite frankly, it’s

my understanding when I found out about it, that was going

through Armed Services under Title 10 to bypass the jurisdiction

of this committee. Now, I don’t know if that was true or not. But

you just said that you welcome the scrutiny of this change through

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this committee. That said, would you be willing to pull it out of the

DOD authorization bill and let it be a stand-alone bill and let us

scrutinize it?

Mr. CHU. Ma’am that’s not my decision to make.

Mrs. DAVIS OF VIRGINIA. Could you ask the Secretary?

Mr. CHU. Delighted to ma’am. I don’t—I think we all know Mr.

Rumsfeld. The same 3 weeks that Mr. Cooper cited, the 3 weeks

it took our troops to get from the Kuwait border to Baghdad, he

is not someone who is patient with a long, indecisive process. He

is eager for the opportunity to reshape this Department in the way

I think we all agree the country needs.

And that’s the purpose of this legislation. It is, as you indicated,

a much larger package, covers a whole variety of issues, including

management and military personnel, which is a classic Title 10

issue. So, my expectation is the Secretary will press us all to consider moving forward. It’s ultimately your question here in the

Congress whether you’re prepared to move forward. But we

welcome——

Mrs. DAVIS OF VIRGINIA. Well, with all due respect, putting it on

the DOD authorization bill does not give it the scrutiny that it

needs because, as you know, those of us in Armed Services are

looking at helping the military and the defense of our country. And

it will probably fly through. But I’ll see what I can do to try and

fix it before it gets there, if that’s possible.

I do appreciate both of you coming, and your patience, and thank

you very much.

Mr. CHU. Thank you ma’am for the opportunity.

Mr. BLAIR. Thank you very much.

Mrs. DAVIS OF VIRGINIA. Mr. Comptroller General, I very much

apologize to you for having to wait so long. Again, Mr. Comptroller

General thank you so much. You know the drill.

[Witness sworn.]

Mrs. DAVIS OF VIRGINIA. Let the record reflect that the witness

has answered in the affirmative and I’m just going to let you begin.

STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL

OF THE UNITED STATES, U.S. GENERAL ACCOUNTING OFFICE

Mr. WALKER. Thank you, Madam Chair, Mr. Davis, Ranking

Member Davis, other members of the subcommittee that are here,

I appreciate the opportunity to appear before you today to provide

some observations regarding the Department of Defense’s proposed

National Security Personnel System which is included as part of

the Defense Transformation for the 21st Century Act of 2003.

Madam Chairwoman, I’d ask that my entire statement be included into the record and I’ll summarize key portions please.

Mrs. DAVIS OF VIRGINIA. So ordered.

Mr. WALKER. Thank you. The proposed Defense Transformation

Act of the 21st Century represents a substantive legislative proposal that has both significant precedent-setting implications for

the Federal Government and OPM, along with far-reaching implications for the way that DOD is managed. DOD’s legislative initiative would, among other things, provide for major changes in civilian and military human management practices, make important

adjustments to the DOD acquisition process, affect DOD’s organizaVerDate 11-MAY-2000 11:48 Sep 09, 2003 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 D:\DOCS\88735.TXT HGOVREF1 PsN: HGOVREF1
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tional structure, and change DOD’s reporting requirements to Congress.

As per your request and Ranking Member Davis’s request I will

focus on the civilian personnel aspects. Many of the basic principles

underlying DOD’s civilian human capital proposals have merit and

deserve serious consideration. The Federal personnel system is

clearly broken in critical respects, designed for a time and work

force of an earlier era, and not able to meet the needs and challenges of our current rapidly changing and knowledge-based environment.

DOD’s proposal recognizes that, as GAO has stated and the experiences of other leading public sector organizations here and abroad

have found, strategic human capital management must be the centerpiece of any serious government transformation effort. At the

same time, we have a number of serious concerns regarding DOD’s

proposal that Congress should consider. Human capital reforms at

DOD obviously have important implications for national security.

At the same time, given the massive size of DOD and the nature

and scope of changes that are being considered, DOD’s proposal

also has important precedent-setting implications for the Federal

human capital management area, in general, and OPM, in particular. As a result, DOD’s proposal should be considered in these contexts. After all, DOD employs almost 700,000 civilian employees,

making it the second largest civilian employer after the Postal

Service.

As a result, the critical questions that in our view need to be

asked include: Should DOD and/or other agencies be granted

broad-based exemptions from existing law, and, if so, on what

basis? And whether they have the institutional infrastructure in

place to make effective use of the new authorities? This institutional infrastructure includes, at a minimum, a human capital

planning process that integrates the agency’s human capital policy

strategies and programs with its program goals and mission and

desired outcomes, the capability to effectively develop and implement a new human capital system, and, importantly, a set of adequate safeguards, including reasonable transparency and appropriate accountability mechanisms to ensure the fair, effective, and

credible implementation and application of any new system.

Many of DOD’s proposals are based on the Department of Homeland Security bill. However, unlike the legislation creating DHS,

the Defense Transformation for the 21st Century Act would allow

the Secretary of Defense to waive the requirement for joint

issuance of regulations if in his or her judgment, it is, quote, essential to the national security, which is not defined in the act. While

the act specifies a number of key provisions of Title 5 that would

not be altered or waived, including those concerning veterans’ hiring preference, merit protections, and safeguards against discrimination and prohibitive personnel practices, the act nonetheless

would in substance provide the Secretary of Defense with significant independent authority to develop a separate and largely autonomous human capital system for DOD. DOD states that it needs

a human capital management system that provides new and increased flexibility in the way it manages and assesses and compensates its employees.

58

As you know, there is growing agreement on the need to better

link individual pay to performance. Establishing such linkages is

essential if we expect to maximize the performance and assure the

accountability of government for the benefit of the American people. As a result, from a conceptual standpoint, we strongly support

the need to expand broadbanding approach and pay-for-performance based systems in the Federal Government. However, moving

too quickly or prematurely at DOD or elsewhere can significantly

raise the risk of doing it wrong. This could also serve to severely

set back the legitimate need to move to a more performance and

results-based system for the Federal Government as a whole.

Thus, while it is imperative that we take steps to better link employee pay to performance across the Federal Government, how it

is done, when it is done, and the basis under which it is done can

make all the difference in whether or not such efforts are successful.

In our view, the key need is to modernize performance management systems in executive agencies so that they are capable of adequately supporting more performance-based pay and other personnel decisions. Unfortunately, based on GAO’s past work, most Federal personnel appraisal systems, including most of DOD’s systems,

are not designed to support a meaningful performance-based system at the present time. The bottom line is that in order to receive

any additional performance-based pay flexibility for broad-based

employee groups, in our view, agencies should have to demonstrate

that they have modern, effective, credible and, as appropriate, validated performance management systems in place with adequate

safeguards, including reasonable transparency and appropriate accountability mechanisms to ensure fairness and prevent

politicization and abuse.

More specifically, Congress should consider establishing statutory safeguards that an agency must have to put in place before it

could implement broadbanding on more performance pay authority.

At the request of Congressman Danny Davis, we developed a list

of initial safeguards for consideration by the Congress that we believe would provide reasonable flexibility while incorporating appropriate safeguards to prevent abuse. We would ask that you seriously consider them.

In my view, Madam Chair, the effort to develop such safeguards

could and should be part of broad-based expanded pay-for-performance authority under which a whole agency, DOD and otherwise,

and or employee groups, could adopt broadbanding and move to a

more pay-for-performance oriented system if certain conditions are

met in advance.

Specifically, the agency would have to demonstrate and OPM

would have to certify that a modern, effective, credible, and, as appropriate, validated performance management system with appropriate safeguards, including reasonable transparency and appropriate accountability mechanisms, is in place to support more performance-based pay and related personnel decisions before the

agency could implement the new system; in other words, a broad

base of authority that could cover DOD and other government

agencies with these safeguards, where agencies would have to demonstrate in advance to the satisfaction of OPM that they have the

59

systems and controls in place; and when they do, they can move

forward. Not just DOD, anybody. But you would have these standard safeguards that Congress would determine as being adequate

to protect the interests of employees and to prevent abuse.

In this regard, we believe that the OPM should consider adopting

class exemption approaches and should be required to act on individual certifications within prescribed timeframes, say 30 to 60

days. This approach would allow for a broader-based yet more conceptually consistent approach in this critical area. It would also facilitate a phased implementation approach throughout government

and it would promote high-performing organizations throughout

government in ways that would provide reasonable flexibility to

management but incorporate adequate safeguards to prevent abuse

of employees. Both are of critical importance. One without the

other is not acceptable.

Congress should also consider establishing a governmentwide

fund whereby agencies, based on a sound business case, could

apply for funds to modernize their performance management systems and ensure that those systems have adequate safeguards to

prevent abuse. This approach would serve as a positive step to promote high-performing organizations throughout the Federal Government while avoiding further fragmentation within the executive

branch in the critical human capital area.

Madam Chair, that represents a summary of my statement. I

would be more than happy to answer any questions that you or the

other members of the subcommittee may have. Thank you.

[The prepared statement of Mr. Walker follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Walker, and again we

really appreciate your patience.

I’m going to start with my ranking member, Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman.

Mr. Walker, I want to thank you for your testimony and also

thank you for your cooperation. Last week you did in fact send

plea, a letter outlining a list of possible safeguards to help ensure

that agencies that are granted waivers from Title 5 have performance management systems in place that are indeed fair and equitable.

You mentioned in your testimony that DOD has not had a good

track record reaching out to stakeholders such as employee groups.

In your opinion, what is the potential for abuse if safeguards are

not put in place to ensure fair and transparent personnel systems?

Mr. WALKER. I believe very strongly that the Federal Government needs to move to a more modern human capital system which

incorporates pay-for-performance principles to a much greater extent than today. I also believe that how it’s done, whether it’s done,

and on what basis it’s done, matters. The process is critically important.

I believe that DOD has involved employees in the past in connection with demonstration projects. They have actively involved

them. And you have to in order to design and implement it. But

they represent less than 5 percent of their work force at the

present point in time. And this would give authority for 100 percent of their work force. And I believe it is important to involve

labor as well as employees who aren’t represented by a union in

the process up front.

Mr. DAVIS OF ILLINOIS. Do you think that these safeguards would

have a tendency to be more of a help to agencies than a hindrance?

Mr. WALKER. My personal view is that they’re important that

they be in place in order to maximize the chance for success and

to minimize the possibility of abuse.

Mr. DAVIS OF ILLINOIS. That would suggest to me that it’s going

to be helpful. I mean, we want systems that are going to provide

not only protection but also provide efficiency and effectiveness,

and you need morale, you need all of those things that become factors in productivity and the implementation of work plans. And so

I would take that to mean that this is actually going to be helpful

to the agencies rather than harmful.

In his testimony, Mr. Chu stated that DOD did not engage labor

in the development of its legislative human capital proposals because the dialog with the unions would be more focused when the

legislation was completed. Do you feel that’s an acceptable method

for ensuring employee input as we try and create the most responsive and effective system that we could have?

Mr. WALKER. I think, obviously, management at DOD had to decide how they wanted to proceed in this regard. I wouldn’t have

done it that way.

Mr. DAVIS OF ILLINOIS. Madam Chairwoman, I don’t have any

other questions.

Mrs. DAVIS OF VIRGINIA. Thank you. Mr. Waxman.

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Mr. WAXMAN. Thank you very much. Mr. Walker, I am pleased

to see you. In the past, you’ve consistently talked about the need

for greater accountability measures, checks and balances, if you

will, to be instituted at Federal agencies before greater flexibilities

are given to them. For instance, you told Senator Voinovich at a

joint House/Senate hearing last month, I believe, ‘‘a vast majority

of the Federal agencies do not have the infrastructure in place in

order to effectively and fairly move to a more performance-based

compensation structure.’’ In your opinion, does DOD have the necessary systems in place to manage the hiring and pay flexibilities

that it is seeking?

Mr. WALKER. No, I think they have the framework that they

want to implement, but it’s not in place.

Mr. WAXMAN. In fact, when GAO reviewed DOD’s strategic plan

for civilians last month, GAO found a lot of problems with the plan;

isn’t that correct?

Mr. WALKER. It was, as was said before, we had concerns that

we expressed. You could say it’s half empty or half full, but half

is half.

Mr. WAXMAN. Well, has DOD made sufficient corrections to its

plan to suggest that it could design a personnel system that will

both treat employees fairly and allow the Department to perform

its mission effectively and efficiently?

Mr. WALKER. I believe it is possible for DOD to design and implement systems based upon the demonstration projects that can be

successful. However, there’s a fundamental philosophical difference

here. In my view, I believe in the Missouri principle: Show me.

We’re talking about something that is very significant here, and

I personally believe it would be better if Congress provided broadbased authority with specific statutory safeguards that either DOD

or anybody in the executive branch could come forth—if they could

demonstrate to OPM that they satisfy these safeguards, I think

that would be the preferred approach.

Mr. WAXMAN. Well, if you take the Missouri approach and you

look at DOD’s past record, it’s not very comforting in my view, because GAO has criticized DOD for its poor bookkeeping, nothing in

terms of management problems, nothing the Department—noting

that the Department lacks fundamental control and management

oversight in its handling of money. In 2001 you gave the Department a D-plus grade on economy and efficiency. DOD had over $1

trillion worth of transactions that were unaccounted for last year,

and we’ve all heard about the misuse of government travel cards

at DOD and news articles have even compared the Pentagon to another Enron when it comes to financial management. Given all

these recent management problems in DOD, why should Congress

trust DOD to be able to devise, implement, and plan a completely

new personnel system?

Mr. WALKER. Mr. Waxman, I believe that DOD has the right conceptual framework, that intellectually they want to do the right

thing, and that Dr. Chu and Secretary Rumsfeld and others are

dedicated to transforming the Department, and that human capital

transformation is a key part and pay-for-performance is an important sub-element.

87

However, I go back to what I said. I believe it would be vastly

preferable to be able to take a governmentwide approach that allows DOD and other executive branch agencies to move forth with

broadbanding and pay-for-performance if they meet a set of statutory safeguards in advance before they implement. I believe that

would be the prudent way to go.

Mr. WAXMAN. What do you think about the idea, as a previous

witness—you may not have been here to hear him, but he argued

that if there’s a conflict between DOD and OPM, to break the tie,

DOD wins. Do you think that personnel decisions ought to be decided by the agencies if there is a disagreement with OPM if the

head of the agency feels it’s national security, or should they go to

the President or someone in the White House to resolve it?

Mr. WALKER. Well, in most mechanisms that I’ve seen, including

GAO records access, I might add, these types of certifications are

done by the President of the United States or the Director of OMB

rather than a party who has a vested interest in the outcome.

That’s not intended to reflect one way or the other on specific individuals. I have tremendous respect for Secretary Rumsfeld and

Dave Chu and others.

Mr. WAXMAN. No, it’s certainly not a personal issue. But how

would you distinguish DOD getting extraordinary flexibility and

powers to waive the Civil Service laws and then not give it to

Homeland Security to the same extent, or Department of Transportation, or any other agency at the Federal Government where they

can argue their functions are important, in fact their functions are

important for the national economy and national security?

Shouldn’t Civil Service laws apply the same across the board?

Mr. WALKER. My view, Mr. Waxman, is that it would be vastly

preferable to have a set of statutory safeguards that could apply to

every department and agency, DOD and others, where when people

can come forth with a business case to say we want to do this, we

meet these safeguards, we’ve got the system in place, therefore,

OPM, give us the authority to implement, that’s I believe the appropriate approach.

Mr. WAXMAN. Thank you very much. Thank you, Madam Chair.

Mrs. DAVIS OF VIRGINIA. Thank you. Mr. Van Hollen.

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

Thank you, Mr. Walker, for being here. I just want to thank you

for your testimony, and I appreciate your guidance as to your recommendations how to proceed here, because we did, as has been

said already, have this hearing just a short time ago where we discussed a lot of these issues, and I think the recommendations

you’re making today I sensed were part of the consensus that was

emerging out of that discussion, which is that these agencies, including DOD, currently have all the authority they need today, at

least to demonstrate, to bring their personnel evaluation systems

up to the point where they can say to the Congress or ask—we can

ask GAO to review and say have you gotten to the point where you

can appropriately move on to the next step? I mean, there’s nothing

barring DOD today from taking those steps internally to reach that

point, is there?

Mr. WALKER. No. I think it is possible to achieve broad-based

consensus with this centrist framework that you referred to.

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Mr. VAN HOLLEN. Right. I mean, so I—again, and your testimony

reflects this so I’m not going to prolong the point, but I do think

that your suggestion that we move very cautiously in this area, I

think is well taken, and I just don’t understand the reason to move

forward on the kind of timetable that we’re being asked to move

forward, especially whether the greatest performance results from

the last couple of months suggest that things don’t need—it’s not

urgent that we make any kind of overhaul that we’re talking about.

Thank you for your testimony.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Walker. I do have a

question or two, and maybe I should have asked this one to DOD

as well. But I kept them long enough. What would be the harm in

granting DOD the same guidelines, safeguards, flexibilities, what

have you, that we gave to the Department of Homeland Security?

And couldn’t DOD function just as well, or more efficiently and effectively, with those guidelines as well as the—as opposed to the

far-reaching ones that they’ve asked for in their proposal.

Mr. WALKER. Well, they’re asking for many of the things that the

Department of Homeland Security got, plus some additional authorities, and, in some cases, without the safeguards that apply to

DHS. Obviously, that’s one of the options you could decide to adopt.

My personal view is that it would be preferable to take a governmentwide approach and have a consistent set of safeguards that

could apply throughout government. Otherwise we’re in danger of

further balkanizing the government. I think there are certain principles that should apply universally.

At the same point in time DOD, DHS, GAO, and others ought

to be able to design their systems for their missions for their work

forces, so it’s not a one-size-fits-all approach. But certain principles

have no boundaries. Certain principles are timeless, and I think

Congress has a role to play in determining what those are.

Mrs. DAVIS OF VIRGINIA. You and I have had that discussion, and

you know I totally agree with you, and I wish we could do that.

But trying to fix something that’s here now, and like somebody said

down there, the train’s left the station, so we’re going to try and

fix it before it gets too far out of bounds.

Going back to what I think Mr. Davis—or it might have been Mr.

Waxman, I’m not sure—asked you about involving the labor

unions. If you had to—and I’m going to put on you the spot here.

Mr. WALKER. It’s been done before, Madam Chair.

Mrs. DAVIS OF VIRGINIA. If you had to rate what DOD did with

the labor unions on a scale of 1 to 10, how effectively do you believe

DOD has involved employer representation in their efforts to expand their pay-for-performance management system?

Mr. WALKER. For this proposal?

Mrs. DAVIS OF VIRGINIA. Yes.

Mr. WALKER. Less than 50/50. Not very good. It would be less

than 5. I don’t know enough to be able to give it an actual grade.

But it would clearly be less than 5 on a scale of 10.

Mrs. DAVIS OF VIRGINIA. And you and I have had that discussion,

too, that a lot of times it’s the perception, and if you do the discussions up front maybe you don’t have as much opposition when you

get to the table.

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I really appreciate you coming, and I think, you know, you’ve already answered my questions in the past and I totally agree with

you. I wish we could do something on a standard governmentwide

basis. I don’t have it down as well as you do. You say it so well.

You’ve said it so much. And maybe 1 day we’ll listen. But thank

you, Mr. Walker, for coming.

I’m going to ask if my colleagues have any more questions to ask

of you. And I do appreciate you taking the time.

Mr. WALKER. Thank you. Take care.

Mrs. DAVIS OF VIRGINIA. If the third panel would come forward,

and if you’d just remain standing while I administer the oath. It

is the subcommittee’s standard practice to ask witnesses to testify

under oath, and if you’ll raise your right hands.

[Witnesses sworn.]

Mrs. DAVIS OF VIRGINIA. Let the record reflect that the witnesses

have answered in the affirmative. And you may be seated. The witnesses will now be recognized for opening statements. We will ask

you to summarize your testimony in 5 minutes and any fuller

statement you may wish to make will be included in the record.

I’d like to welcome Bobby Harnage, president of the American

Federation of Government Employees; also Jerry Shaw, general

counsel, Senior Executives Association. Thank you both for being

here today, and thank you both for your patience for having to sit

and wait so long. But I think you understand this is an important

issue, and given this is the only hearing we’re going to have, we

wanted to hash it out as much as possible.

Mr. Harnage, I’m going to recognize you first for 5 minutes.

STATEMENTS OF BOBBY L. HARNAGE, NATIONAL PRESIDENT,

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,

AFL–CIO; AND G. JERRY SHAW, GENERAL COUNSEL, SENIOR

EXECUTIVES ASSOCIATION

Mr. HARNAGE. Thank you, Madam Chairwoman, and majority

Member Davis, members of the subcommittee, for the opportunity

to testify today. I understand that my written testimony will be entered into the record, and so I have a few comments that I would

like to make concerning DOD’s proposal for total and unilateral

and unchecked authority to impose an entirely new personnel system upon the Department’s 640,000 employees every time a Defense Secretary decides to do so.

AFGE represents over 200,000 civilian DOD employees. We have

worked around the clock with total dedication, maintaining, repairing, and loading equipment and preparing our troops; loading them

and their weapons on the tanks, aircraft, warships. And they have

barely come up for air and find that the Pentagon has now declared

war on them.

Madam Chairwoman, I’m most impressed by the knowledge not

only expressed here by the Chair, but also by the members of the

committee concerning the subject and what has been a very short

period of time to become familiar with it. You’ve asked very good

questions, very pointed questions, questions that I could not have

written better had I tried. So I want to make one plea with you

in addition to the testimony that I’ll give this morning.

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First, I too recognize the arrogance of this legislation. It’s unprecedented. This is a bully moving through Congress, and it should

not be allowed to operate that way. I appreciate your request of Dr.

Chu that he consider withdrawing the legislation from the civil—

from the Armed Services and allow it to properly come before this

committee which has jurisdiction. And I would encourage you and

your colleagues to ask the rest of the Representatives in the House

to take the same position, that this legislation should not be allowed to be moved in the manner in which it’s being moved and

the precedent that it is setting. It may be their turn next.

So I appreciate your recognition of protecting the institution of

this great body. They should not be allowed to get away with this.

It’s a trend-setter. They’ll certainly be encouraged to do it even

more often in the future if allowed here.

But this proposal does not ask you to vote on new personnel systems for the Department. It asks you to hand over your authority

for approving new employee personnel systems to each successive

Secretary of Defense. This proposal does not ask you to vote on a

new pay-for-performance system for the Department. It asks you to

hand over your authority for approving the pay system for 654,000

Federal employees to each successive Secretary of Defense. This

proposal does not ask you to vote on taking away Federal employees’ rights to due process so they can appeal decisions they feel

have been based on discrimination or cases of political coercion. It

asks to you hand over your authority to keep or take away such

rights to each successive Secretary of Defense. And the list goes on.

You will hear lots of disinformation and this operation erodes the

Civil Service campaign. The worst will be that the legislation gives

DOD the freedom to link pay to performance so that (a), DOD

won’t have to contract out everything that isn’t nailed down, and

(b), DOD will finally be able to achieve its mission by making sure

that high performance is at last rewarded. Neither of these rationales is true. The not-so-veiled threat that if they don’t get the

power they demand they’ll simply privatize everything is an important admission that contracting out has never had anything to do

with saving money or improving efficiency. It’s about moving

money and jobs to political favorites and cronies, and giving each

successive Secretary of Defense total unchecked authority to hire

and fire whomever he wants; promote and demote whomever he

wants; schedule and pay overtime, or schedule and fail to pay overtime to whomever he wants; allow collective bargaining or disallow

collective bargaining to whomever he wants; is also about power to

move money and jobs to the political cronies.

AFGE testified before this subcommittee 4 weeks ago about the

perils of pay-for-performance. Expert opinions is unanimous that

individualized pay-for-performance schemes, if they make any effort whatsoever to be fair and based on measurable factors, eat up

an enormous amount of managerial resources and make everyone

unhappy. They do not improve productivity and they do not accomplish organizational goals.

Madam Chairwoman, I think the question has been asked: Why

haven’t these people worked with us over the last year since March

2002 to develop this and come before you with a complete package

rather than a blank check? And I, too, am confused. I thought I

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represented the employees of DOD. I didn’t know the employer did.

I’ve been elected; I wasn’t appointed by a political appointment.

To say that they’ve talked with labor is misleading, and also say

they talked to the employees. I am labor. The employees are the

people that I represent. And, the arrogance of this Pentagon to not

only try to say that they speak for the employees, the employees

have already voted. That’s not so. But for them to also say that

they will decide where collective bargaining will be and at what

level and to what extent, rather than the employees having the opportunity to vote on it—I have recognition at agency levels, I have

it with DFAS, I have it with DECA, DLA, with all of those within

the Department of Defense. But the employees voted for that. But

this employer wants to say it will make that decision for employees.

Why the Right to Work for Less Committee and the Chamber of

Commerce aren’t upset about those two proposals I fail to understand. But this is total arrogance and it should be stopped. It

should not be allowed.

And thank you very much for the opportunity for this testimony

and I’ll be glad to answer any questions you have.

Mrs. DAVIS OF VIRGINIA. Thank you Mr. Harnage.

[The prepared statement of Mr. Harnage follows:]

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Mrs. DAVIS OF VIRGINIA. Mr. Shaw, you’re recognized for 5 minutes and if you’d like to put your complete statement in the record

you can. If you’d like to summarize, that’s up to you.

Mr. SHAW. Yes. I would like my complete statement in the

record, please, Ms. Chairman Davis.

Thank you for the opportunity to testify. SEA represents the interests of career members of the Senior Executive Service at DOD

and all Federal agencies’ senior-level senior technical employees

and those in equivalent agencies’ equivalent positions.

First, these—this proposal by DOD goes far beyond anything

that has been demonstrated and proven in the demonstration

projects that we have. I’m going to confine my comments to those

matters we believe threaten the integrity of the Senior Executive

Service and its cadre of career executives who ensure the impartial

and nonpolitical, nonpartisan enforcement and administration of

our Nation’s laws.

I was watching a ‘‘60 Minutes’’ segment on CBS Sunday night.

It involved allegations there had been improper political interference in the awarding of DOD contracts for the rebuilding effort

in Iraq. Specifically it accused Vice President Cheney of interfering

in the pre-hostilities award of classified contracts to Halliburton

Corp. It also made allegations about former general officers in the

military who are now working for Halliburton and other companies

that received contracts for providing services to the troops in Iraq.

Finally, it cast aspersions on the current administration and its political leadership for allegedly interfering in these and other rebuilding efforts in Afghanistan.

While allegations and innuendo are the life blood of ‘‘60 Minutes’’

and other television news shows, the interesting part was the response of DOD. Instead of the Secretary or another high-level political appointee responding, the Chief Counsel of the Army Corps of

Engineers, Robert Anderson, responded to the allegations. He is a

career member of the Senior Executive Service, and provided an eloquent defense of the procurement process. His most important and

telling statement was that the contract procurement activities were

performed by career employees who would not allow DOD or other

Federal contracts to be awarded on the basis of partisan politics.

He stated that if ‘‘60 Minutes’’ or any others making allegations

were to spend 1 week with these career employees, they would understand how carefully and objectively these contracts were evaluated and awarded.

The importance of this is that DOD realized that the integrity of

its programs depended on the career executives and career employees who carry out its day-to-day activities. It also knew that a career SES employee presenting the facts would carry more credibility with the public. ‘‘60 Minutes’’ was at a loss when confronted

with this response, and I believe that most of the Nation’s citizens

dismissed the allegations out of hand because of the assurance of

the career SES employee, Mr. Anderson.

We relate this incident because we firmly believe that some of

the authorities sought by DOD in this legislation would serve to

undermine the citizens’ confidence in the integrity of government

operations. This confidence is based in large part on the integrity

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ship. This legislation would do away with many of the rights and

protections of these employees need to maintain their nonpartisan

integrity. SEA is aware that this is not intended but there is always a concern about unintended consequences.

We believe that the breadth and depth of the unfettered authority sought by this legislation justifies our and your concerns. Some

of SEA’s concerns are highlighted here today, others are in our

written testimony.

First the legislation does away with the requirement for Career

Reserved SES positions which are—which must be filled by career

employees. They would allow such employees, such positions, to be

abolished or not to exist, to be filled by anyone, qualified or unqualified, partisan politician or not. This authority is not necessary.

OPM has done the job of overseeing and ensuring the positions requiring impartiality and nonpartisan enforcement of the Nation’s

laws are carried out by career employees who have gained their positions based on merit. We believe this should continue.

The bill would do away with the requirement that career SES

appointments be made up of persons who meet the qualifications

for the job. These qualifications are approved by OPM through the

Qualifications Review Board process, which should continue, and

which takes a maximum of 2 weeks to perform.

It would allow for SES Career Reserved positions to be filled by

temporary employees with no review of their qualifications and no

limit on their numbers. We object to this authority.

It also removes the restriction that political appointees may fill

no more than 10 percent of SES positions overall or 25 percent in

any agency. This would destroy the career SES and rob the government and the people of this country of the impartial administration

of our Nation’s laws and regulations. It would allow the elimination

of all appeal rights for career executives and employees to the

Merit System Protection Board if their pay was drastically cut or

they were removed from their positions for alleged misconduct.

They would have no due process rights in the taking of their pay,

their positions, and their reputation.

It allows the flexibility to limit the SES appointment rules. It allows for SES employees’ pay to be set annually, anywhere between

125,000 lower—at the lower end, or 198,000 at the upper end, with

no opportunity for oversight, no necessity for certification of a fair

evaluation process, or any right on behalf of the employee to challenge the determination anywhere, even if his or her pay is cut.

It allows the creation of appointments of highly qualified experts,

quote unquote, who would be paid up to 50 percent higher than the

higher SES salary or, based on current pay, $192,500. There would

be no limit on the number of these appointments and they could

serve for 6 years in any position with no independent check of their

qualifications. If a particular DOD administrator wishes, they

could unilaterally fire everyone of their current SES employees and

fill these positions with, quote, highly qualified experts from whatever field without review of their actions or appointees.

Currently DOD has authority for a limited number of such positions at DARPA, the armed services research lab, etc. They are

limited to scientific and engineering positions which pay 25 percent

higher than the SES.

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These are but some of our concerns. We urge the subcommittee

to expeditiously amend this proposal to restore the necessary safeguards for career SES employees before its enactment. We do not

object to additional flexibility for DOD. We support pay-for-performance and we support many of the proposed changes which

would allow additional management flexibility. But we believe that

loose flexibility should be limited to that provided the Department

of Homeland Security and that DOD be required to go through the

same process as Homeland Security before issuing regulations and

beginning or implementing new systems in the Department of Defense.

Thank you.

[The prepared statement of Mr. Shaw follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Shaw, and thank you,

Mr. Harnage. I’m going to start again with my ranking member,

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman.

Mr. Harnage, Mr. Shaw, I believe that you gentlemen basically

have answered my questions, but let me ask you what role did your

respective organizations play in development of this proposal and

have you had any opportunity to comment on the legislation to the

Department?

Mr. SHAW. No to both questions. None.

Mr. HARNAGE. No. We got word they wanted to talk to us, and

they talked with us in general terms just a few days before it was

published in the Register. They just gave us advance warning that

it was coming out.

Mr. DAVIS OF ILLINOIS. Dr. Chu stated that employee groups had

essentially commented, or had the opportunity to comment on this

proposal, because you had the opportunity to comment on the nine

demonstration projects that had been conducted earlier. How do

you assess that comment?

Mr. SHAW. Well, first I have to correct my previous answer. We

did receive a call, and there was a meeting last Friday which was

the first notice that we had of any of these proposals. And we did

meet with two individuals from the Department of Defense, but

that was kind of late in the process seeing as it had already been

introduced and was well on its way.

Second, most of the—if not all of the demonstration projects, did

not affect their Senior Executive Service. So that it was not necessary or appropriate for us to be brought into that process, and

we were not part of that process.

Mr. DAVIS OF ILLINOIS. Mr. Harnage.

Mr. HARNAGE. Yes, to answer your question, seems to rebut Mr.

Chu’s expression that the employees are in favor of this. I’m still

trying to figure out whether that’s ‘‘employee’’ or ‘‘labor.’’ There’s

only one of the demonstration projects that were union. All of the

others are nonunion. All of the opportunities to participate in a

demonstration project in current law are subject to the approval of

the recognized union, and they have yet to be able to convince our

employees to ask me to try and get that legislation for them. The

employees are not demanding this. It’s the political appointees and

top management.

Mr. DAVIS OF ILLINOIS. Are either one of you aware of any instances, have you heard from any experts where the current Civil

Service laws have hindered the way in which DOD had the opportunity to execute its most recent military operations?

Mr. HARNAGE. Well, to answer that question, your colleague

Steny Hoyer from Maryland asked that question during the Department of Homeland Security debate, to give one example of

where either be it a union member or collective bargaining agreement has been a problem with national security, and this has been

over a year and he’s still waiting for an answer to that question.

You would think that having just come out of this war in Iraq, that

if there was ever going to be an example that would be fresh in

your memory it would certainly be now, but they do not have any.

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Mr. SHAW. We have heard of none that prevented any activities,

appropriate activities in Iraq. And—but I must say that the—that

current senior executives are aware of management inflexibilities

that are dogging their ability to manage the work force in DOD

and other agencies, and we have testified about those before, and

we have made our suggestions to Congress to resolve those.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman. I have no other questions, but I would just say that I’m

sure that you’ve got more influence with DOD than I do, but I

would join with you——

Mrs. DAVIS OF VIRGINIA. Not much.

Mr. DAVIS OF ILLINOIS [continuing]. In calling upon the Secretary

to withdraw this portion of the legislation and give us more time

to really deal with it. So, I would thank you very much.

Mrs. DAVIS OF VIRGINIA. I’m certainly going to ask, Mr. Davis,

but I wouldn’t hold my breath on it. But I really would hope that

we can get that portion out of the DOD authorization bill, just to

be able to flesh it out more with more hearings, at least at another

hearing where we’d have a little more time to prepare. To

follow——

Mr. HARNAGE. Out of the Davises, we have a 2 to 1 vote.

Mrs. DAVIS OF VIRGINIA. A few more than two people on the committee, unfortunately. And he’s not with me in Armed Services, unfortunately.

I’m sort of lower on the totem pole in Armed Services.

To followup on what Mr. Davis was talking about, when it comes

to using Federal workers and executing the conflicts, Dr. Chu stated that—I don’t think he stated it here, I think it was when he

talked to us in the back—where DOD said they had 9,000 civilian

workers on the ground in Iraq and only 1,500 of those 9,000 were

Federal employees. And he said that the reason for that was that

they don’t have the flexibility that’s necessary to use civilian workers.

You know I support defense very strongly, and I think our Nation’s security is of utmost importance. Given that, what do you

think that we need to do in order to protect the status of the DOD

civilian worker from competition from contractors; what adaptations do we need to make? What is the problem? Is that what

you’re saying; we do not know what the problem is?

Mr. HARNAGE. Well, first of all, in all due respect to Dr. Chu, I

think that was a misrepresentation of the facts. The civilian work

force and the situation with Kosovo, Afghanistan, and the Gulf

war, civilian employees were deployed because contractors could

not be or would not be placed in harm’s way. This time there may

have been more contractors than there were civilians, but it had

nothing to do with the civilian work force flexibilities.

The only complaints that I have heard concerning this deployment—and I think there were more than 1,500—were two complaints that came to me because they were not allowed to be deployed, not because they were deployed. Many of the people that

were deployed were union members. Many of the people that were

activated were Federal employees that are now reservists, were

also union employees, and nobody’s had to check their union card

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in order for them to shove a rifle in their hand. So I think that’s

a total misrepresentation of the fact.

In this crowd, in this hearing room today, are several of the leaders, and Department of Defense are here because they’re dedicated,

and there’s nobody more supportive of the Department of Defense

than AFGE and its leadership out of DOD.

Mr. SHAW. There are no restrictions in laws or regulations from

the deployment of career Federal managers or executives anywhere

in the world, in any part of the world at any period of time.

Mrs. DAVIS OF VIRGINIA. We’re going to try to get some specifics

from Dr. Chu on that because I want that question answered.

Mr. Harnage, I really appreciate the time and effort you have put

into your prepared remarks and I appreciate the work you do representing your people. You’ve posed many questions that certainly

should be answered and you’ve got a lot of folks, 200,000 people

over at DOD. That’s a lot, and I know it’s a job for you.

You mentioned earlier in your prepared testimony on page 5 that

the AFGE’s repeated overtures to the administration have been

spurned.

Mr. HARNAGE. Say that again?

Mrs. DAVIS OF VIRGINIA. You were not able to talk to the people

in the administration. Can you elaborate on that for us? You know,

have they given—have you given them something in writing, have

they ignored you? Have you tried to make appointments? Have

they ignored you? Can you expand on it? What’s the deal?

Mr. HARNAGE. Well, there’s one specific thing I can give you in

writing, where one of the first things I did was write to this administration which—when it had only been in office a couple of weeks,

saying we want to sit down and talk to you about pay reform. If

there’s a problem with pay, then let us fix it and do it together.

We were not ignored. We did get a response, but it basically said

they were too busy.

The same way with this legislation. AFGE was working with the

previous administration, with the Pentagon, on personnel reforms

and we was working I thought very well together. We had a Department-level partnership going. That came to a screeching halt

when they canceled the executive order on partnership. I used to

go to the Pentagon two or three times a month, meeting with various departments and people and sometimes even with the Deputy

Secretary of Defense. I have been to the Pentagon twice since this

Secretary has been there, and it’s twice at his calling of all the organized labor, not to talk about the Pentagon but to talk about the

response to terrorism and the changes that had to be made, more

or less preparing us for the eventual war that was going to happen.

Mrs. DAVIS OF VIRGINIA. Have you tried to get in to see him?

Mr. HARNAGE. Pardon?

Mrs. DAVIS OF VIRGINIA. Have you made the initiative and tried

to get——

Mr. HARNAGE. We have. And even with Dr. Chu we’ve asked let

us sit down and talk through these things. I’m not interested in

being allowed to disagree or agree, I want to have meaningful

input, and I think the people I represent who are on the job can

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ing and the progress of this legislation is more important than the

substance is my impression of the Pentagon.

Mrs. DAVIS OF VIRGINIA. OK. I’m not going to comment on that.

It’s clear from your testimony that the proposal we’re addressing

today gives you concern because of the potential for each Secretary

of Defense to change the rules or to move the goal post anytime

that they want to.

Would it be fair to say that because of a new and improved system that still takes many years to implement, even if it may be

possible for the Secretary to act unilaterally, successive Secretaries

would have other projects to put in place, than to reform a new

personnel system, and do you have any comments you would like

to share on that? I think we’re all concerned about the sweeping

power that we’d be giving the current Secretary.

Mr. HARNAGE. It’s sweeping power and it’s final. It’s not only

taking me out of the picture, it takes you out of the picture. You

have got to recognize that where now we have collective bargaining

by law, and it’s defined what it can entail by law, you’re changing

that to where the employer now decides whether or not collective

bargaining will take place and, if so, to what degree it will take

place, and it’s not subject to any outside party’s interpretation.

Currently, there’s an incentive to reach an agreement because

there’s a third-party involved. In fact, there’s more than one party.

You go from negotiations to impasse to mediation; from mediation

to the impasse panel who has an opportunity to make the final decision, which is a panel appointed by the President of the United

States.

Under this change in the law, not only will they decide the subject matter to be collectively bargained but the degree collective

bargaining takes place, and then if there’s an impasse, there’s a

final say in it, nobody else has a final word. There’s no check and

balance, an opportunity to agree or disagree.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Harnage. My time is

up. We’re going to go to Mr. Waxman.

Mr. WAXMAN. Thank you very much, Madam Chairwoman.

Mr. Harnage, I think you’re absolutely right. The idea of making

this kind of a change in our Civil Service System with 24 hours’

notice at best for Members of Congress, for us to give up all authority we’re going to have in the future about how the Civil Service

System is going to be run at the Department of Defense is to me

astounding. And not only are they trying to cut us out of the picture, they want to cut the workers out of the picture, too, and keep

you from being able to have the input that you need, your people

need, to make sure that the whole system works for everybody.

It seems like they’re forgetting the big picture and the goal that

we all should want is a good-performance outcome, a good result

for the work of the Department of Defense; that the combination

of the armed services, the Civil Service personnel, and those that

have to contract out for certain services, all of it needs to be

brought together effectively to work successfully. And I’m astounded at the idea that they want to trample on individual employees’ rights and the rights of employees to bargain collectively

and then think they’re going to have a work force that’s going to

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be committed and feel that they have been given a fair chance to

make all of this succeed, that we all want it.

I appreciate the position you have taken here and the leadership

you’ve given to government employees not only on this issue but on

so many others, and I just want to express my point of view to you.

We’re going to do what we can to make sure that the end result

is not going to be one where we delegate to anybody in any administration to throw out 100 years of Civil Service protections at the

whim of any individual. I remind this administration that administrations come and go, but the laws are there to protect us under

all circumstances. I thank you very much.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Waxman. And again I’d

like to say thank you to our witnesses for being so patient to hang

around and let us hear from you, and thank you again for all you

do. And with that, this subcommittee is adjourned.

[Whereupon, at 1:20 p.m., the subcommittee was adjourned.]

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