UNITED STATES DEPARTMENT OF THE NAVY

ADMINISTRATIVE RECORD

FY 2013 FURLOUGH APPEALS

TABLE OF CONTENTS1

Tab Date Document Description 

1 16 Sept 13 Declaration of Robert F. Hale, Under Secretary of Defense 

(Comptroller)/Chief Financial Officer (USD (Comptroller)) in the 

United States Department of Defense (DoD)

2 13 Sept 13 Declaration of Robert T. Cali, Principal Deputy Assistant Secretary 

of the Navy (Manpower and Reserve Affairs) 

3 6 Aug 13 DoD SECDEF Memorandum Subj: Reducing Furlough Days

4 15 Jul 13 American Forces Press Service Press Release- SECDEF Budgetary 

Discussion at Fort Bragg Town Hall 

5 5 Jul 13 Letter from USD (Comptroller) Robert Hale to Congress re: 

Furlough of Working Capital Fund Employees 

6 24 May 13 Department of the Navy Administrative Furlough Guidance for 

Proposing and Deciding Officials 

7 23 May 13 SECDEF Memorandum - Additional Guidance for Handling Budget 

Uncertainty in FY2013 

8 21 May 13 DON Memorandum Subj: Department of the Navy Supplemental 

Guidance on the Scheduling of Furloughs 

9 21 May 13 Email: Honorable Jessica Wright, Acting Under Secretary of Defense

(Personnel & Readiness), “Exception of Sexual Assault Prevention 

and Response Personnel from Furlough Actions” 

10 20 May 13 DoD Reprogramming Request

11 15 May 13 Office of the Director of National Intelligence (DNI), Furlough 

Decision Announcement

12 14 May 13 *SECDEF Memorandum for Secretaries of the Military Departments 

Subj: Furloughs 

 

1 Documents designated by asterisk were referenced in the Department of the Navy's Notices of 

Proposed Furlough as "supporting materials" which were posted at the following website: 

http://www.public.navy.mil/donhr/Documents/supportingmaterial.pdf. 
13 14 May 13 Speech by Secretary Hagel on Furloughs to DoD Personnel

14 4 Apr 13 OMB Memorandum Subj: “Ongoing Implementation of the Joint 

Committee Sequestration”

15 11 Mar 13 Transcript DoD Town Hall on Sequestration in the Pentagon (USD

(Comptroller) Robert Hale) 
Personal Background 

UNITED STATES OF AMERICA 

MERIT SYSTEMS PROTECTION BOARD 

DECLARATION OF ROBERT F. HALE 

I, Robert F. Hale, having personal knowledge of the facts contained in this declaration 

and being competent to testify to them, hereby state as follows: 

1. I currently serve as the Under Secretary of Defense (Comptroller)/ChiefFinancial 

Officer in the United States Department of Defense ("DoD" or "the Department"). I have held 

this position since February 2009 following my nomination by President Barack Obama, 

confirmation by the United States Senate, and appointment by President Obama. 

2. Prior to my appointment, I served as the Executive Director of the American 

Society of Military Comptrollers (ASMC), the professional association of Defense financial 

managers. As Executive Director, I led the ASMC's certification program (the Certified Defense 

Financial Manager program), and oversaw other training programs, the society's professional 

journal, and the ASMC' s National Professional Development Institute, an annual conference 

attracting more than 3,500 participants. Prior to my ASMC tenure, from 1994 to 2001, I served 

in the Pentagon as the Assistant Secretary of the Air Force (Financial Management and 

Comptroller), where I was responsible for annual budgets in excess of $70 billion, efforts to 

streamline Air Force financial management, and compliance with the Chief Financial Officers 

Act. In addition, from 1982 to 1994, I headed the National Security Division at the 

Congressional Budget Office, developing quantitative analyses of major defense budget issues 

and testifying frequently before congressional committees. During my career, I was also a 

senior fellow and head of the acquisition and grants management group at LMI, a consulting firm 

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DECLARATION OF ROBERTT. CALI 

Personal Background 

I, Robert T. Cali, having personal knowledge of the facts contained in this declaration 

and being competent to testify to them, hereby state as follows: 

1. I currently serve as the Principal Deputy Assistant Secretary of the Navy 

(Manpower and Reserve Affairs) (PDASN (M&RA)) in Washington, DC. I assumed this 

position on October 11, 2009. As the PDASN (M&RA), I serve as the Secretariat focal point on 

all matters pertaining to the Department of the Navy's Human Capital Strategy, total force 

management and human capital transformation. I lead the Department of the Navy's (DON' s) 

transformational efforts to modernize and improve htiman capital management including active 

duty, reserve, civilian and contractor personnel. 

2. Prior to my current position, I served as the Assistant General Counsel (M&RA) 

beginning in March 2003. In that position, I provided the full range of legal services to the 

Assistant Secretary of the Navy (M&RA) and his staff and directed the practice oflaw on behalf 

ofthe DON in the fields of Military and Civilian Personnel Law and Equal Employment 

Opportunity. I also advised the General Counsel and the Navy Secretariat on all matters 

concerning manpower and reserve affairs policy and administration arising at the Headquarters 

level. Prior to my AGC (M&RA) tenure, from January 2000 to March 2003, I served as Counsel 

for the Naval Facilities Engineering Command (NA VF ACENGCOM). In that position, I served 

as the senior legal advisor to the Commander and other top officials at the NA VF ACENGCOM 

and was responsible for areas such as procurement, environmental, land use, labor law and all 

other matters in the business and commercial law arena. I also was responsible for management 

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 12
attorneys in offices throughout the United States, Guam, 

Japan and Italy. In addition, from May 1989 to January 2000, I served as Deputy Counsel for the 

Commandant of the Marine Corps at Headquarters Marine Corps in Washington, DC. In that 

position, I served as an advisor to the Commandant and other top officials of the Marine Corps 

on a wide variety of legal issues. I also functioned as "Acting" Counsel for the Commandant 

when Counsel was absent. Earlier in my career, upon entry into federal service in 1980, I served 

with the Office of Counsel, Naval Air Systems Command in Washington, DC where I was 

counsel to the Sidewinder missile, P-3 and S-3 aircraft programs. In December 1983, I moved to 

the Navy Special Projects Division. As Counsel of that division, I was the senior attorney for the 

DON' s highly classified procurement programs. 

3. I graduated with honors (cum laude) from the University of Rochester with a B.A. 

in political science and psychology in 1976. I received my juris doctor degree from Case 

Western Reserve University School of Law in 1979, and I am a member of the District of 

Columbia Bar. I have been a member of the Senior Executive Service since January 1995. In 

addition, I am the recipient of the Presidential Rank Award of Meritorious Civilian Executive 

and the DON's Distinguished (twice), Superior and Meritorious Civilian Service Awards. 

4. In my current position as PDASN (M&RA), I participated in the decision-making 

process, in conjunction with the Department of Defense (DoD), regarding the furlough of 

civilian employees. Specifically, I have knowledge ofthe process whereby certain exceptions 

were made to the furlough as well as the DON' s implementation of the furlough mandated by the 

Secretary of Defense (the Secretary) on May 14, 2013. 

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 13
set forth in the Secretary's May 14, 2013 memorandum announcing the DoDwide furlough of civilian employees, a decision was made to except several categories of 

employees, primarily for mission-specific reasons, including the following eight categories 

applicable to DON personnel: (a) employees deployed to a combat zone; (b), employees 

necessary to protect safety of life and property (but only to the extent necessary to protect life 

and property), including selected medical personnel; (c) all employees in Navy shipyards; (d) 

Foreign Military Sales (FMS) employees funded entirely from FMS administrative and case 

funds; (e) all employees excluded by application oflaw (i.e., individuals appointed by the 

President, with Senate confirmation, who are not covered by the leave system in 5 U.S.C., 

chapter 63, or an equivalent formal leave system); (f) all employees funded by non-appropriated· 

funds; (g) all Outside Contiguous United States foreign national employees; and (h) all 

employees who are not paid directly by accounts included in the DoD-Military (subfunction 051) 

budget (e. g., certain positions at the Naval Postgraduate School.) 

6. The exception for "employees necessary to protect safety of life and property" 

was intended to be limited in application. Specifically, Budget Submitting Offices (BSOs) were 

instructed to identify positions where 80% manning would create unacceptable risk. This 

focused on 24/7 shifts and emergency response requirements. As the Secretary specifically 

noted in his May 14, 2013 memorandum: 

The exceptions approved for the safety of life and protection of property category 

are granted with the understanding that these are the minimum exceptions needed 

to maintain operations and provide security on a 24/7 basis and that furloughing 

these employees would result in the Department incurring additional costs for 

premium pay. Similarly, the exceptions for the medical category are approved 

with the understanding these exceptions preserve the minimum level of personnel 

needed to maintain quality care in 24/7 emergency rooms and other critical care 

areas such as behavioral health, wounded warrior support, and disability 

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 14
in Navy shipyards" (which covered: (1) Pearl 

Harbor Naval Shipyard and Intermediate Maintenance Facility (IMF), (2) Portsmouth Naval 

Shipyard, (3) Norfolk Naval Shipyard, (4) Puget Sound Naval Shipyard and IMF, and (5) the 

Naval Submarine Base Kings Bay) was included due to the particular difficulty in making up 

delays in maintenance work on nuclear vessels critical to mission success. In implementing this 

exception, DON leadership determined that it would apply only to those individuals who worked 

directly for the above facilities. (Thus, not all positions geographically located at a shipyard 

were necessarily covered by the exception.) Rather, this determination was made based on Unit 

ID Codes unique to each of the above facilities. 

8. With respect to civilian intelligence positions, a distinction was made based on 

the source of and authority over the funding. Thus, as noted in the Secretary's May 14, 2013 

memorandum, the Secretary determined that civilian intelligence positions funded through 

Military Intelligence Program (MIP) funds (controlled by the Secretary) would be included in the 

furlough. The memorandum also noted that the Director of National Intelligence (DNI), (whose 

authority derives from the Intelligence Reform and Terrorism Prevention Act of2004, and who 

has authority over National Intelligence Program (NIP) funds), would determine whether NIP-. 

funded positions would be subject to furlough. Following issuance of the Secretary's May 14, 

2013 memorandum, DNI James Clapper detern;1ined that civilian intelligence positions funded 

through NIP would not be furloughed. 

9. Following issuance ofthe May 14,2013 memorandum, the DoD also excepted 

several other categories of civilian employees. First, on May 22, 2013, DoD excepted 

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approximately 500 sexual assault prevention personnel including sexual assault response 

coordinators, sexual assault victim advocates and program management. This exception was 

created in order to ensure responsive victim care and swift and efficient implementation of new 

initiatives (including DoD-wide training) directed by Secretary Hagel to prevent such assaults 

which is a priority for the President and Secretary. In addition, DoD excepted certain child care 

workers in order to meet regulatory requirements and the DON excepted 13 Naval Criminal 

Investigation Service (NCIS) agents who were supporting the Department of Justice (DOJ) in 

on-going high profile fraud cases. 

10. With respect to the above 13 NCIS agents, their positions were deemed'critical to 

the mission because these special agents were heavily engaged in preparing for the final phase of 

a wide-spread fraud and corruption investigation spanning multiple time zones within the United 

States and abroad with respect to DON civilian and United States Navy active duty personnel, 

foreign nationals, and corporate subjects. Based on information obtained from the DOJ, which 

was on a fast track for requesting indictments, the DON determined that inclusion of these 

special agents in the furlough would severely impact DOJ's ability to successfully indict the case 

as planned. 

Implementation ofthe Furlough by the DON 

11. In accordance with the Secretary's May 14, 2013, memorandum, implementation 

of the furlough generally proceeded pursuant to the following schedule for DON employees. 

First, between May 28 and June 5, the DON issued a DoD-mandated standardized Notice of 

Proposed Furlough to employees who were subject to furlough and who, based on their 

employment status, were entitled to such notice. This notice informed employees of: (1) the, 

basis for the furlough; (2) the procedures and conditions to be applied with respect to the 

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furlough; (3) various rights associated with responding to the proposed furlough (e.g., specifics 

as to the rights to respond orally or in writing, to review supporting material, and to be 

represented by counsel); and (4) the identity of the individual designated to hear oral replies, and 

if different, the identity of the deciding official (DO). 

12. Prior to issuance of the above notice, the DON had designated approximately 750 

DOs across its commands to consider any replies received and issue a final decision. (Some 

commands, especially those with numerous employees, also designated a separate official to hear 

oral replies and provide a summary to the relevant DO.) The DON instructed its DOs that they 

had the authority to: (1) modify the furlough if they determined that an individual held a position 

subject to one of the previously established exceptions; (2) recommend modification ofthe 

furlough if they concluded that the position at issue should be subject to an exception not 

previously recognized; and (3) adjust furlough schedules. 

13. Second, following completion of the seven-day period designated for replying to 

the proposed furlough (which typically occurred between June 4 and June 12, 2013), the DON's 

designated DOs issued the Notices of Decision to Furlough, or, where applicable, Notices of 

Decision to Modify the Proposed Furlough between June 5 and July 5, 2013. Across the DON, 

in approximately 270 instances, DOs granted relief from the Proposed Furlough based on their 

conclusion that the position at issue was covered by an established exemption. 

14. The Notices of Decision to Furlough informed employees that the reasons for the 

proposed furlough remained valid, reiterated the procedures and conditions previously outlined 

including information regarding scheduling, and set forth applicable appeal rights. Third, 

following issuance of the notices, the furlough period began for DON employees on July 8, 2013 

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 17
15. On August 6, 2013, Secretary Hagel announced that, "due to a combination of 

Congressional approvals and Departmental budget management efforts, I am directing that 

furloughs for most DoD civilians be reduced from 11 days (88 hours) to six days (48 hours)." 

See August 6, 2013, Hagel Memorandum. By August 17,2013, the vast majority of DON 

employees had achieved the required six days of furlough. 

16. Overall, the furloughs impacted approximately 160,000 out of approximately 

250,000DON civilian employees. 

I declare under penalty of perjury under the laws of the United States of America that the 

foregoing is true and correct. 

Dated: September 13, 2013 

Robert T. Cali 

7 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 18
ig SECRETARY OF DEFENSE 

1000 DEFENSE PENTAGON 

WASHINGTON, DC 20301 -1000 

AUG 6 2013 

MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOINT CHIEFS OF STAFF 

UNDER SECRETARIES OF DEFENSE 

DEPUTY CHIEF MANAGEMENT OFFICER 

COMMANDERS OF THE COMBATANT COMMANDS 

ASSISTANT SECRETARIES OF DEFENSE 

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

DEPARTMENT OF DEFENSE CHIEF fNFORMATION OFFICER 

ASSISTANTS TO THE SECRETARIES OF DEFENSE 

DIRECTOR, ADMfNISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF THE DEFENSE AGENCIES 

DIRECTORS OF THE DOD FIELD ACTIVITIES 

SUBJECT: Reducing Furlough Days 

I am pleased to announce that, due to a combination of Congressional approvals and 

Departmental budget management efforts, I am directing that furloughs for most DoD civilians 

be reduced from I I days (88 hours) to six days (48 hours). 

When I announced furloughs on May 14, 1 promised that we would try to reduce the 

number of days. In early May we faced a residual shortfall in our operating budget of $11 

billion. Furloughs of I I days, which would have saved $2 billion, were one of the limited 

number of options we identified to close this gap. Since then, Congress has approved most of a 

large reprogramming request that we submitted in mid-May, giving us flexibility to move funds 

across accounts. The military services have been aggressive in identifying ways to hold down 

costs, and we have been successful in shifting savings (including furlough savings) to meet our 

highest priority needs. 

As a result, we are able to accomplish two goals: a reduction in furlough days, and 

modest improvements in training and readiness. However, even with these improvements, this is 

a military whose readiness remains seriously degraded as we head toward the budgetary 

uncertainties of FY 2014. 

Assuming that the majority of employees were furloughed one day per week beginning 

the week of July 8, this reduction in the number of furlough days will mean that most employees 

will have achieved six days (48 hours) of furloughs by August 17. However, all civilian 

employees, unless exempted from furloughs or govemed by special rules, must complete six 

days (48 hours) of furloughs. If they have not accomplished this by August 17, they must do so 

in a timely manner and before the end of this fiscali ear. 

OSDO09263-13 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 19
One specific exception to be implemented immediately is the cancellation of all furloughs 

for Department of Defense Education Activity (DoDEA) instructional and support staff on 10- 

month contracts. These personnel were already subject to only five days of furloughs in order to 

ensure a creditable year of schooling for our students; now the teaching year will not be reduced 

at all. Newly hired civilian employees whose furlough period began after the week of July 8 

must complete an equivalent of two furlough days per full pay period between the starting date 

for their furloughs and August 17. All other special circumstances will be adjudicated by the 

Under Secretary of Defense (Personnel and Readiness) and the Under Secretary of Defense 

(Comptroller). 

I want to thank our civilian workforce for their patience and continued dedication to our 

mission during these extraordinarily tough times and for their continued service and devotion to 

our Department and our country. Our civilian personnel are essential to ensuring our Department 

and our military can provide for the nation's defense. I regret the difficulties they and their 

families had to face during this furlough period. Thank you. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 20
21
president has the options when he calls [the chairman of the Joint Chiefs of Staff] or me, and 

we call [commanders] and say, 'Can we do it? Do we have the capacity to do it?"' 

One vehicle for addressing budget limitations, the recently announced force structure 

changes, is predicated on preserving combat power and readiness, Hagel said. The military's 

only responsibility is the defense of the nation, he added, and everything else has to fit within 

that framework. 

"That's not always an easy assemblage of pieces to have to come together to assure that one 

responsibility, especially during a time of oo• significant reductions in our budget," the 

defense secretary said. Preserving current readiness is corning at a cost to future readiness, 

"but I have to preserve as much as I can preserve with the resources I have," he said. If 

sequestration continues into fiscal year 2014, an additional $52 billion in cuts will occur 

across the department, Hagel added. 

As he sought additional ways to protect readiness, furloughs for the Defense Department's 

civilian employees were the last thing he wanted to do, Hagel said, but he told the Fort Bragg 

audience he had no other options. Congress was unwilling to authorize the reprogramming of 

funds that would have prevented the need to furlough about 650,000 defense civilian 

employees, he explained. 

"I could not take down that readiness line any further than where we were," he said. "We've 

essentially cut [and] frozen everything we can in order to maintain those numbers." 

This may be the most difficult time to be serving the nation, Hagel said, "but we have no 

choice but to get tlrrough it, and we will get tlrrough it." 

Though some of the services were in better fiscal shape than others going into the 

sequestration period, Hagel said, he was determined for the department to stay unified. "It's 

the whole point of the joint command," he said. "I couldn't as secretary of defense get into a 

situation where I was going to allow each service to make their own decisions on this. 00. I 

thought that everybody had to come into this together and go out together. 

"If [for] no other reason," he continued, "I did that because I just think it's the fair way to do 

it, as fair as you can be in this business." 

When people are treated unfairly, the secretary said, it does damage to the institution. 

"This is bigger than the Defense Department. It's people. We as individuals-- as human 

beings -- each want to be treated fairly, with some dignity and some respect," Hagel said. 

http://www .defense.gov/utility/printitem.aspx?print=http://www.defense.gov/news/newsarticle.aspx?i ... 

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Qrnngr.ess nf if1.e lltnit.e~ .§tat.es 

l!Dia.sqington, 1!1Qt 20515 

June 21, 2013 

The Honorable Chuck Hagel 

Secretary of Defense 

The Department of Defense 

Washington, D.C. 20301 

Dear Secretary Hagel: 

We are writing to express our concern about the determination that civilian workers at entities funded 

through Defense Working It appears that there are substantial 

legal and economic questions surrounding the decision to impose furloughs on these employees. 

We request an explanation as to whether the Department considers civilian employees at Working 

Capital fund entities to be "indirectly funded Government employees of the Department of Defense," as 

defined in 10 USC 129. If so, we further request an explanation of the legal justification the Department 

is using to impose furloughs on these civilian workers, despite the explicit protections afforded them 

under this statute. 

Furthermore, while the Department sought to alleviate a shortfall in its operating funds for fiscal year 

2013, we request the Department clarify its rationale in determining that furloughing these workers 

would reduce its operating expenses. Specifically, please provide the Department's estimate of the 

reduction in FY 2013 spending as a result of furloughing civilian workers at entities funded through 

Working Capital funds. 

We are concerned that, in addition to the loss of pay these civilian employees now face and the 

subsequent impact this will have on our local communities, moving forward with these furloughs will 

reduce the ability of our civilian workforce to complete workload which is already funded. Further 

restricting available workforce resources will result in mission delays, eventual overtime, and greater 

cost to the Department and taxpayers. 

We respectfully request your prompt attention to this important issue. 

Sincerely, 

Adam Smith 

U.S. Representative 

PRINTED ON RECYCLED PAPER 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 26
Tom Cole 

U.S. Representative 

~tb~~ U.S. Representative U.S. Representative 

~ Representative U.S. Representative 

Austin 

~e,/,.IJI Scott 

U.S. Representative 

Tom Marino Mo Brooks 

U.S. Representaf e U.S. Representative 

;1/._.U r '"-

Mike Rogers Cheri Bustos 

U.S. Representative U.S. Representative 

Bill Shuster 

U.S. Representative U.S. Representative 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 27
x,w~ Lou Barletta 

U.S. Representative 

im Griffin 

U.S. Representative 

U.S. Representative 

Mike Turner 

U.S. Representative 

Sanford 'shop 

U.S. Rep sentative U.S. Representative 

-lo.~ -ill tB.JL 

Ralph Hall 

U.S. Representative U.S. Representative 

)tftllt~ U.S. Representative U.S. Representative 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 28
Paul Tonka 

U.S. Representative 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 29
Administrative Furlough Guidance for

Proposing & Deciding Officials

Department of the Navy

24 May 2013 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 30
Table of Contents

Furlough Overview......................................................................................................................... 2

Guidance for Proposing Officials ................................................................................................. 2

Overview...................................................................................................................................... 2

Delivering/Acknowledging Notices of Proposed Furlough............................................................. 2

Hand-delivery............................................................................................................................... 3

Email Delivery .............................................................................................................................. 3

Mail Delivery ................................................................................................................................ 3

Official Time to Review Material................................................................................................... 3

Guidance for Deciding Officials.................................................................................................... 4

Overview...................................................................................................................................... 4

Administrative Record.................................................................................................................. 4

Oral Reply Process ...................................................................................................................... 5

Decision Process ......................................................................................................................... 6

References ..................................................................................................................................... 7

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 31
The Secretary of Defense has made a determination that the Department’s sequestration-imposed 

budgetary shortfalls are forcing him to direct the furlough of most Department of Defense (DoD) 

civilians for up to 11 days. As the head of the Agency, the Secretary of Defense made his decision 

after considering the input of the Secretary of the Navy, which included inputs from the CNO and 

the Commandant, regarding our efforts to meet our budgetary shortfalls, our mission requirements 

and priorities, as well as our budget projections for the remainder of the year and beyond. 

Furloughs are adverse actions governed by the requirements enumerated in 5 U.S.C., Chapter 75. A 

furlough is defined in 5 U.S.C. § 7511 as “the placing of an employee in a temporary status without 

duties and pay because of lack of work or funds or other nondisciplinary reasons.” DON employees

have a constitutionally-protected interest in their employment and, as such, are entitled to due 

process before their property right can be adversely affected. The process that is due requires that 

each employee receive advanced written notice of the proposed furlough, followed by an opportunity 

to reply to that notice to a deciding official who has the authority to change the outcome of the 

proposed furlough, followed by a written final decision from that deciding official. Furlough 

proposal and decision letters must have physical signatures from the appropriate proposing and 

deciding officials. Following the final decision, a furloughed employee is entitled to challenge the 

furlough by filing an appeal with the Merit Systems Protection Board (MSPB). The MSPB, through 

an administrative hearing, will review the bona fides of the furlough (i.e., is it based upon a “lack of 

work or funds or other nondisciplinary reasons”), as well as whether the above-described due 

process requirements were met and whether the furlough was implemented fairly. 

Guidance for Proposing Officials

Overview

The Proposing Official signs and issues Notices of Proposed Furlough letters (proposed furlough 

notice) to the affected employee. The Proposing Official should be the employee’s Department Head, 

supervisor or manager who has alignment to the Deciding Official. Proposing Officials should be in 

the employee’s chain of command. Proposing officials should work with their Command HR offices 

and/or the Director Civilian Human Resources (DCHR) throughout the notification process. Unlike 

in a misconduct or performance-based adverse action where the proposing official is, in fact, 

recommending some type of adverse action (e.g., a suspension without pay or downgrade or removal 

from Federal service), in the furlough setting, the “proposing official” is merely delivering the 

required notice and securing an acknowledgement of receipt from the employee. 

Delivering/Acknowledging Notices of Proposed Furlough

Proposing Officials are responsible for delivering or ensuring delivery of the proposed furlough 

letter. There is no statutory or regulatory requirement for an employee to acknowledge receipt of the 

proposed furlough notice. However, if challenged, the DON may have to prove an employee 

received the letter or that the DON exercised due diligence. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 32
Notices provided to employees in person should include a sign/date acknowledgment on the notice 

or on a memo for the record. Proposing officials should retain a copy of the signed proposed 

furlough notice for the record. If employee refuses to sign, notate the refusal and indicate date/time 

of service.

Email Delivery

Commands may send signed proposed furlough notices to employees as a Word or Adobe pdf 

attachment using a government email account. (The email language must include whether the notice 

is a Microsoft Word or Adobe PDF file.) 

The DON recommends using the read receipt and delivery notification feature in the email system 

when issuing email notification. When using email, proposing officials should also request that the 

employee reply to the email, acknowledging receipt of the proposed furlough notice. Proposing 

officials should retain a copy of the read receipt from the employee. The employee’s email of record 

will be used to send the proposed furlough notice. 

Proposing officials should avoid using email in an industrial setting where employees may not have 

ready access to a computer. NMCI outlook may block read receipts from outside e-mail service 

providers such as Gmail, Yahoo, AOL, Comcast, etc. 

Mail Delivery

Commands may send proposed furlough notices to employees using first class postal mail to the 

mailing address of record. The employee’s mailing address of record is found in DCPDSMyWorkplace or Total Workforce Management System (TWMS). Delivery confirmation service 

can be used to confirm the date and time the first-class letter was delivered, but is not required. 

Commands do not need to use certified mail. 

Official Time to Review Material

First-line supervisors must allow the employee a reasonable amount of official time to review the 

materials relied on to support the proposed action, to prepare and answer orally and/or in writing and 

to secure affidavits – this is situation driven but typically 2-3 hours is sufficient. Supporting material 

is available at http://www.public.navy.mil/donhr/Documents/supportingmaterial.pdf 

Note: If the employee is covered by a collective bargaining agreement (CBA), the provisions of that 

agreement must be followed. 

If employee asks the Deciding Official to consider any medical documentation, the employee must 

be given a reasonable amount of time to furnish medical documentation.

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 33
Overview

The Deciding Official is responsible for rendering a final decision regarding the furlough. The 

Deciding Official usually hears and receives oral and written replies presented by affected 

employees or their representatives. If an oral reply is presented, the Deciding Official listens to and 

captures a written summary. An individual other than the Deciding Official may be delegated as the 

Reply Official, particularly in situations such as a proposed DON-wide administrative furlough 

where numerous replies may occur. If so, the delegated Reply Official should be a supervisory or 

management official with the authority to hear and receive replies and make recommendations. 

The following guidance is provided for carrying out the responsibilities of the Deciding Official. 

The Deciding Official should: 

• Generally be in a higher position than the official who proposed the action (N/A for SES)

• Be the Activity’s Commanding Officer, Executive Officer or senior civilian equivalent 

(applicable for SES and non-SES)

• Consider only the reason(s) specified in the advance written proposal notice; materials relied 

upon in support of that proposal notice; and any and all replies made by the employee and/or 

the employee’s representative (N/A SES)

• Weigh any replies that invalidate the procedures used or the reasons for the proposed 

furlough (N/A SES), for example:

o DoD declares a budget crisis no longer exists 

o Employee falls under a furlough exemption 

o Proposal notice is procedurally defective (N/A SES) 

• Sign decision notice specifying reasons for and effective date of the decision in consultation 

with the HR advisor/counsel using appropriate template

Administrative Record

The following make up the administrative record the Deciding Official must consider before 

rendering a decision on the proposal to furlough. It should be noted that consideration is limited to 

the administrative record only. 

Notice of proposed action 

• Notifies employee of proposed administrative furlough, identifies reason(s) for the furlough, 

including the basis for selecting a particular employee for furlough when some but not all 

employees in a given competitive level are being furloughed

• Includes the effective date, duration and anticipated number of furlough days/hours, and due 

process rights – including the right to reply orally and/or in writing, the right to 

representation, the right to review the information relied upon to support the proposed action, 

and the right to official time to prepare answers to the proposal notice 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 34
http://www.public.navy.mil/donhr/Documents/supportingmaterial.pdf. 

Oral Reply Process

The individual designated to receive the employee’s oral reply and location where written replies 

should be delivered (or emailed) must be clearly identified. The Deciding Official or the designated 

Reply Official should arrange for an appropriate and private space to hear oral replies and must 

consider and respond in writing to any requests for an extension to the reply period. Generally, 

requests for an extension received within the initial reply period should be granted unless precluded 

by compelling reasons; requests received after the initial replay period elapses may be granted unless 

precluded by compelling reasons.

During the meeting, the Deciding/Reply Official shall:

• Listen and take notes (or have a note taker present) during the employee’s presentation of the 

oral reply – summarize only what the employee said (and/or representative on behalf of 

employee); avoid any suggestion of judging or characterizing the employee’s remarks

• Remain noncommittal, nonjudgmental and non-challenging during the reply meeting

• The oral reply must not become an adjudication session or quasi-hearing, or a justification 

session of why a furlough is necessary or why the employee is covered by the furlough 

• Do not argue or make statements or engage in a discussion of the relative merits of the case 

• Seek clarification of reply where necessary

• The employee should not be confined solely to addressing matters of the reasons for the 

furlough (by law, the employee may make any reply and the official is required to hear any

and all replies)

• The employee may also plead extenuating circumstances, such as personal or medical 

problems 

• Under no circumstances should any indication of a decision be given or the situation be used 

to censure or otherwise discourage the employee from making any reply 

• At the termination of the reply meeting, inform the employee that the oral and written reply, 

if any, will be given full consideration in making the final decision regarding the proposed 

furlough 

• Ensure a written summary of the oral reply is preserved for the record and provided to the 

designated Deciding Official for the Deciding Official's consideration in rendering a 

decision, with a copy to the employee and the employee’s representative

• Deciding Official should direct any technical questions about the reply to the servicing HR 

advisor 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 35
The Secretary of Defense has directed that furloughs be imposed for the reasons stated in his 14 May 

2013 memorandum. The policy established by the Secretary of Defense to furlough employees, 

other than those employees that are a member of one of the approved categorical exceptions, for the 

purpose of minimizing the adverse effects on the military mission, including military readiness, of 

the Department of Defense, shall be applied by deciding officials. 

The deciding official must be someone who has the authority to change the proposed action (i.e., 

furlough) consistent with the Secretary of Defense’s decision. All Deciding officials should be 

advised to follow the review/decision process outlined below which provides guidance to implement 

the Secretary of Defense’s 14 May 2013 memorandum on furloughs: 

• Deciding officials should consider any and all replies and determine whether the reply (ies) 

forms a basis for granting relief from the furlough. Deciding officials must also make final 

decisions in cases where an employee does not submit a reply.

• In accordance with chapter 75 of Title 5 of the United States Code, its implementing 

regulations, the 14 May 2013 memorandum from the Secretary of Defense and any 

subsequent supplemental guidance provided by the Office of the Secretary of Defense 

pursuant to the 14 May 2013 memorandum, a deciding official shall determine if the 

employee is a member of one of the approved categorical exceptions and should have been 

excluded from the furlough, or if there is another basis under those authorities to grant relief 

to the individual employee. If so, grant relief. Deciding officials must ensure that the 

furlough is applied fairly across all employees. 

• The deciding official must avoid consideration of any information outside of the 

administrative record (i.e., outside of that which was relied upon to support the proposed 

furlough notice, the proposal letter itself, the reply(ies) presented by the employee or the 

employee representative on the employee’s behalf); or ensure the employee has an 

opportunity to reply to any additional information considered beyond that outlined in the 

proposal letter. 

• When a deciding official obtains new and material information that is not in the record, they 

should consult with their HR advisor or counsel to determine how best to convey that new 

and material information to the employee and provide an additional opportunity to reply. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 36
Note – Consult your command DCHR, local HR advisor or counsel with any questions regarding 

this guidance or the administrative furlough process in general. 

5 CFR 752.404 (c)(2), Employee's answer. The agency will designate an official to hear the 

employee's oral answer who has authority either to make or recommend a final decision on the 

proposed adverse action. The right to answer orally in person does not include the right to a formal 

hearing with examination of witnesses unless the agency provides for such hearing in its regulations. 

Under 5 U.S.C. 7513(c), the agency may, in its regulations, provide a hearing in place of or in 

addition to the opportunity for written and oral answer. 

(5 CFR 752.404 (f)), Agency review of medical information. When medical information is 

supplied by the employee pursuant to paragraph (c)(3) of this section, the agency may, if authorized, 

require a medical examination under the criteria of § 339.301 of this chapter, or otherwise, at its 

option, offer a medical examination in accordance with the criteria of § 339.302 of this chapter. If 

the employee has the requisite years of service under the Civil Service Retirement System or the 

Federal Employees' Retirement System, the agency must provide information concerning disability 

retirement. The agency must be aware of the affirmative obligations of the provisions of 29 CFR 

1614.203, which require reasonable accommodation of a qualified individual with a disability.

DON Civilian HR Manual Subchapter 752, Appealable actions. An appealable action (removal, 

suspension for more than 14 days or indefinite suspension, reduction in grade or pay, or furlough for 

30 days or less) entitles the affected employee to a written decision... signed by an official in a 

higher position than the official who proposed the action, unless the activity head/commander issued 

the advance notice, in which case the activity head/commander may issue the written decision (5 

CFR 752.404(f). 

5 CFR 752.404 (g) Agency decision. (1) In arriving at its decision, the agency will consider only the 

reasons specified in the notice of proposed action and any answer of the employee or his or her 

representative, or both, made to a designated official and any medical documentation reviewed under 

paragraph (f) of this section. 

See Horner v. Schuck; 843 F.2d 1368, 1375 (Fed. Cir. 1988) [88 FMSR 7013] ("if [an] employee 

can show that [a] furlough was not in accordance with the terms of his appointment, [the] employee 

is entitled to invoke [5 U.S.C.] section 7513's adverse action procedures"); see also Prior v. 

Department of the Air Force [93 FMSR 5072]. 

Clark v. Office of Personnel Management, 84 FMSR 5945 , 24 MSPR 224 (MSPB 1984). 

For more information or questions email DONhrFAQ@navy.mil. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 37
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References: (a) SECDEF memorandum, Furloughs, dated 14 May 2013 

 (b) UNSECNAV memorandum, Planning Guidance for Potential Civilian 

 Furloughs, dated 21 February 2013 

Background: This guidance supersedes guidance issued by the Assistant Secretary of the Navy 

(Manpower and Reserve Affairs) (ASN (MRA)) memo of 28 February 2013. Reference (a) provides 

notification to Department of Defense (DoD) civilian employees of the plan for an administrative 

furlough. Reference (b) provides overarching planning guidance to Budget Submitting Offices 

(BSOs) regarding administrative furlough scheduling in response to the Budget Control Act of 2011 

— also known as sequestration. The guidance provides parameters to BSO Commanders and 

affords senior leaders the latitude to execute furlough schedules based upon mission requirements. 

Scheduling of furlough days is subject to local Impact and Implementation (I&I) bargaining 

requirements. To ensure continued success for the Department of the Navy (DON), major deviations 

to the general guidance provided in reference (b) must be coordinated with the Assistant Secretary of 

the Navy (Manpower & Reserve Affairs).

1. Key provisions on scheduling of furloughs: 

a. All administrative furloughs have been reduced from 176 hours/22 workdays to 

maximum of 88 hours/approximately 11 workdays. 

b. For general planning, furloughs typically will be executed in increments of approximately 

16 hours per pay period to mitigate the impact on the mission and employees; hours for 

part-time employees will be prorated based on their work schedule. 

c. Employees will receive notification of the furloughs and related timelines in accordance 

with regulatory requirements (typically 30 days’ notice). 

d. The hours/time for the administrative furloughs will be determined by BSO Commanders 

and shall be dependent upon mission requirements. 

e. BSO Commanders may delegate the coordination and scheduling of furloughs as 

appropriate for carrying out mission requirements. 

f. Plans to deviate from the general planning guidelines will be coordinated in advance with 

ASN(MRA) as there are potential ramifications to the employees and commands if 

modified plans are adopted. 

g. Scheduling of furlough days for employees is subject to local I & I bargaining 

requirements. 

h. Notifications of Personnel Actions (SF-50s) will be documented to provide scheduling 

flexibility. Notifications will identify start date, end date, maximum of 88 furlough hours, 

and requirement for supervisors to schedule furlough hours prior to the start of a pay 

period. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 45
3. BSO Commanders may decide the following: 

a. The days/ hours of furlough for each employee within the 16 hours per pay period 

guideline. 

b. Minor variations from the 16 hours per pay period based on mission requirements or 

employee requests. Examples include:

1. Due to a major deliverable the furlough hours for one or a few employees are deferred 

in one pay period and added in the ensuing pay period(s). 

2. Due to mission critical, short-term temporary duty (TDY) the furlough hours for one 

or a few employees are deferred in one pay period and added in the ensuing pay 

period(s). 

3. Employee requests for personal reasons to take no more than one week of furlough at 

one time. 

c. Adjustments/cancellation of Compressed Work Schedules and Alternate Work Schedules 

(subject to I&I bargaining for bargaining unit employees). 

d. Adjustments/cancellation of telework (subject to I&I bargaining for bargaining unit 

employees). 

e. Recall of employees from furlough status in the event of an emergency. 

4. Important points to consider in scheduling furloughs: 

a. The first factor in determining furlough schedules should be mission requirements. 

b. Employee requests may be considered to the extent they do not compromise the mission. 

c. BSO Commanders must be able to administer and track scheduling decisions. While the 

furloughs can be scheduled in increments as small as an hour at a time, BSO 

Commanders must make sure that these decisions are documented, can be tracked and 

managers and employees are adhering to all rules associated with the furlough.

a. Employees required to work hours outside of a basic workweek during which they have 

been furloughed are compensated with their rate of basic pay if overtime thresholds have 

not been met and/or with overtime pay or compensatory time off in lieu of overtime pay, 

as appropriate once the threshold has been met. 

b. Authorization for overtime/compensatory time must be provided by the BSO Commander 

or his/her designee (no lower than Echelon 3 Commander/SES) prior to the work being 

performed. 

6. BSO Commanders may not adjust employee work schedules to replace lost productivity or 

lost compensation as a result of the furlough. 

7. BSO Commanders may not transfer work from civilians to contractors or active duty 

personnel to replace lost productivity or lost compensation as a result of the furlough. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 46
8. Employees currently on leave without pay (LWOP) should be issued furlough notices unless 

they are deployed to a combat zone.

a. While in ‘full-time’ LWOP status, an employee is in a nonpay status and is not subject to 

furlough. 

b. When an employee on LWOP is returned to duty status during the furlough period, the 

employee will begin serving furlough days as scheduled. 

c. LWOP prior to the furlough period does not replace the furlough requirements. 

d. Employees who are in LWOP status during the furlough period will receive credit for 

their time spent in the status toward any remaining scheduled furlough hours. 

e. Suspension resulting from misconduct is a disciplinary adverse action. LWOP status due 

to furlough is a non-disciplinary adverse action.

9. Unless otherwise directed, holidays occurring through the end of the fiscal year (FY) will not 

be used as a furlough day for employees. If a regularly scheduled furlough day falls on a 

government holiday, it shall be moved to the preceding workday unless it falls on a Sunday 

holiday in which case, the regularly scheduled furlough day shall be moved to the following 

workday. 

a. In making holiday-related schedule adjustments BSO Commanders need to be mindful of 

the requirement for employees to be in a pay status on either the workday preceding a 

holiday or the workday following a holiday to receive pay for the holiday. 

10. Employees may not work during their furlough hours/days. 

11. Employees may not substitute paid leave or other forms of paid time off for any hours or 

days designated as furlough time.

12. In the event that an employee has taken more than the required number of furlough hours 

(e.g., BSO Commander-approved grouping of furlough days into weeks) prior to an early 

cancellation of the furlough, the employee may retroactively cancel excess furlough hours 

and substitute annual leave for those hours in accordance with DON guidance. 

13. To the extent possible, furlough time should not be scheduled during periods of temporary 

TDY. However, if required, BSO Commanders may furlough employees on TDY “in place” 

if on extended TDY. If an employee is on short-term TDY (within one pay period), BSOs 

may adjust/defer furlough hours within the pay period or from one pay period to another — 

up until 28 September 2013. If an employee is on long-term TDY (more than the equivalent 

of one full pay period) and furlough in place is not practical (e.g. the employee is on TDY at 

sea) then the employee is not expected to make up the missed furlough time. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 47
14. Employees may not participate in training during their furlough hours/days. If employees are 

participating in training during the furlough period, employees will be furloughed in 

accordance with the procedures implemented by the employee’s parent organization.

a. Parent organizations may give consideration to adjusting the employee’s/student’s 

furlough schedule to accommodate course work and educational requirements while still 

meeting the mandated furlough requirements. 

15. New hires are subject to the furlough unless covered by one of the approved exception 

categories. Newly hired employees will be provided notice immediately upon reporting onboard. Furlough days will be pro-rated across the pay periods remaining from the day after 

the furlough decision notice is issued. 

a. If a new employee does not require 30 days advance notice of furlough, their furlough 

should begin on the first full pay period after their EOD date.

b. If a new employee requires 30 days advance notice, their furlough should begin on the 

first full pay period after their notice period.

16. Employees on detail remain officially assigned to their permanent positions during a detail. If 

furlough is required, the parent command will determine how and when the detailed 

employee will be affected.

17. Leave for employees excepted from furlough should be managed at the appropriate 

management level based on workload and mission requirements. These employees are 

excepted because their presence on the job has been deemed critical. BSO Commanders (or 

their designees) may issue guidance to their subordinate activities regarding approval and 

disapproval of annual leave during the furlough period keeping in mind that management 

may disapprove leave at any time for legitimate business reasons. 

18. Major variations from the above guidance must be coordinated in advance with 

ASN (MRA). Examples may include:

a. Excepting individuals or categories of individuals from furlough. 

b. Reducing the total number of furlough hours for any employees. 

c. Grouping furlough time into week(s) for more than a few (i.e. >10) employees).

19. Requests to deviate from the planning guidance must be submitted using the Coordination 

with ASN(MRA)) on Deviation from DON Administrative Furlough Guidance form in 

accordance with the business rules outlining the process for exception replacements and sent 

to ASN(MRA)) via OCHR Director Doug Lundberg (douglas.lundberg@navy.mil

). 

20. Additional guidance is available in the DON 2013 Administrative Furlough Information and 

Frequently Asked Questions. (https://www.portal.navy.mil/donhr/OCHRHQ/Pages/Furlough.aspx)

21. Questions may be directed to DONhrfaq@navy.mil. 

Attachment: Request for Deviation from Administrative Furlough Guidance 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 48
-----Original Message-----

From: Wright, Jessica L HON OSD PR [mailto:jessica.wright@osd.mil]

Sent: Tuesday, May 21, 2013 10:38 AM

To: Westphal, Joseph W HON (US); Martinage, Robert C SES UNSECNAV,

DepUnSecNav; Fanning, Eric Hon USAF SAF/US; Lamont, Thomas R HON (US);

Garcia, Juan M HON ASN (M&RA); Ginsberg, Daniel Honorable USAF SAF/MR;

Kendall, Frank HON OSD-ATL; Fox, Christine H, HON, OSD-CAPE; Hale, Robert F

HON OSD COMPT; Vickers, Michael G HON OSD OUSDI; Rhodes, Michael L CIV OSD

ODAM; Whitman, Bryan SES OSD PA; Little, George CIV OSD PA; King, Elizabeth

L, HON OSD LA; Patton, Gary, MG, WSO-SAPRO; Hesterman, John W Lt Gen OSD PR

Cc: Vollrath, Fred E ASD OSD PR; Lumpkin, Michael CIV SD; Lettre, Marcel CIV

SD; Lippert, Mark CIV SD; Hinkle-Bowles, Paige CIV OSD PR; Yarwood, Susan A

SES CIV WHS-HRD; Anderson, Wendy R CIV SD; McCord, Mike J HON OSD COMPT;

Tamburrino, Pat SES OSD PR; Perry, Troy D COL OSD PR

Subject: Exception of Sexual Assault Prevention and Response Personnel from

Furlough Actions

Colleagues - As you are well aware, Secretary Hagel and GEN Dempsey are fully 

committed to making the changes required to instill a climate that does not 

tolerate or ignore sexist behavior, sexual harassment, or sexual assault. These 

violate everything we stand for and the values we defend, and have no place in 

the United States military. Creating a culture free of the scourge of sexual 

assault requires establishing an environment where dignity and respect is 

afforded to all, and our greatest assets as a force are the mutual bonds of trust 

that are integral to the profession of arms.

To this end the Department is excepting all civil servants who are integral to 

the Department's Sexual Assault Prevention Response Program. We have already

excepted medical personnel required to handle emergency situations and crisis 

intervention. To ensure responsive victim care, we are extending this exception 

to include full-time Sexual Victim Advocates and Sexual Assault Response 

Coordinators in the Active and Reserve Components. To ensure necessary program 

changes are implemented swiftly and efficiently, including the recent SAPR 

initiatives directed by Secretary Hagel, headquarters full-time SAPR program 

management staffs are also expected.

I ask that you identify the total number of additional exceptions this action 

will create to my office NLT than this Friday.

Jes

Jessica L. Wright

Acting Under Secretary of Defense

(Personnel and Readiness)

4000 Defense Pentagon

Washington, DC 20301-4000

703-697-2121

Jessica.wright@osd.mil

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OFFICE OF THE DIRECTOR OF NATIONAL Jl'\TTELUGENCE 

FaoM r•• D 1~1craa 

l 

05/15/2013 

From DNI Clapper: Furlough Decision Announced 

Today, the Secretary of Defense announced that, due to an O&M shortfall of more than $30 

billion this fiscal year, DoD civilian employees will be subject to 11 furlough days. 

During the past several months, Secretary Hagel and I discussed the issue of furloughs as they 

relate to DoD civilian employees funded under the National intelligence Program. We agree that 

NIP funded DoD civilians are a critical element of the Intelligence Community's mission and that 

furlough decisions regarding these employees should be made within the IC. Several months ago, 

I challenged IC leaders to develop strategies to minimize furloughs across the community. 

Through their effort and that of many others, I'm pleased to announce that I do not envision 

mandating furloughs to IC employees funded in the National intelligence Program. 

As DNI, I have a responsibility to preserve our ability to deliver the most insightful intelligence 

possible. You've heard me say it before- our people are our most valuable asset and our mission 

depends on making sure intelligence professionals are focused on the threats facing our nation. 

Secretary Hagel and I share the beliefthat furloughs disrupt lives, negatively impact national 

security and hinder our ability to carry out our mission. I support his efforts to continue to seek 

solutions to further reduce the number of furlough days imposed on DoD civilian employees 

particularly funded under the Military Intelligence Program, and the Information Systems 

Security Program. 

There is no question that under sequestration we will have to do less with less. Over time, the 

significant impact of these cuts will force us to prioritize our intelligence activities with 

increasingly limited resources. During these challenging times, when the array of threats we face 

is so vast, we need every intelligence professional focused on our mission. 

Throughout this process, you have been exceedingly patient and professional and, most important 

of all, you have remained focused on our top priorities- continuing to integrate the IC and 

providing the most insightful intelligence possible. 

I appreciate your continued patience and commitment to our mission as we work through the 

impacts of sequestration together. Thank you for all you do for the IC and for our nation. 

James R. Clapper 

Director ofNational lntelligence 

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i) Any employees who are not paid directly by accounts included in the Department of 

Defense-Military (subfunction 051) budget are excepted from furlough. For example, this 

would include employees funded by the Arlington National Cemetery (705 function) and 

DoD Civil Works (various non-051 functions) programs. These exceptions have been 

identified by the Components. Furloughing these employees would not reduce the 

expenditure of DoD budgetary resources and so would not assist in meeting sequestration 

reductions. 

The following portion of this document provides the definitive list of additional approved 

exceptions beyond those listed in the preceding paragraph. The exceptions approved for the 

safety of life and protection of property category are granted with the understanding that these 

are the minimum exceptions needed to maintain operations and provide security on a 24/7 basis 

and that furloughing these employees would result in the Department incurring additional costs 

for premium pay. Similarly, the exceptions for the medical category are approved with the 

understanding these exceptions preserve the minimum level of personnel needed to maintain 

quality of care in 24/7 emergency rooms and other critical care areas such as behavioral health, 

wounded warrior support, and disability evaluation. Furloughing these employees would result 

in unacceptable care being provided, and the Department would incur increased costs for 

premium pay or TRICARE. The exception for Child Development Centers is granted with the 

understanding that this is the minimum level needed to maintain accreditation and maintain 

quality care for children in military families. Some Department of Defense Education Activity 

employees, while not excepted from furlough, may only be furloughed when they are in a pay 

status. Therefore, they will only be subject to furlough for up to five days at the beginning of the 

2013 school year. 

Recognizing that circumstances can change in this dynamic environment, the Secretaries 

of the Military Departments, and the Principal Staff Assistants for the Defense Agencies and 

Field Activities, may approve up to 50 additional individual, mission-based, exceptions as 

needed to ensure safe and efficient operations of their respective Departments. Any such 

exception must be reported to the Acting Under Secretary of Defense (USD) for Personnel and 

Readiness and the USD Comptroller. There are no other approved exceptions provided based on 

the Components' submissions. Furlough proposal notices should be issued to all impacted 

employees beginning May 28, 2013. 

Relative to the review and decision on individual employee requests for exception, per 

guidance issued via the Principal Deputy Assistant Secretary of Defense, Readiness and Force 

Management, memorandum, dated March 13, 2013, activities should designate the Deciding 

Official. The designated Deciding Official will be no lower than a local Installation Commander, 

senior civilian or equivalent who would be in the best position to determine the fair and equitable 

application of the furlough. Deciding Official responsibilities may not be further delegated. 

Deciding Officials are charged with, and are accountable for, making final decisions on furloughs 

for individual employees after carefully considering the employee's reply, if any, and the needs of 

the Department. Deciding Officials must also ensure they make final decisions in cases where an 

employee does not submit a reply. Deciding Officials will have the authority to execute the full 

range of options with respect to providing relief in individual employee cases. This authority 

includes, but is not limited to, reducing the number of days/hours an individual employee is 

furloughed, or granting the individual employee an exception from the furlough altogether. 

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U.S. Department of Defense

Office of the Assistant Secretary of Defense (Public Affairs)

Speech

On the Web: 

http://www.defense.gov/Speeches/Speech.aspx?SpeechID=1779

Media contact: +1 (703) 697-5131/697-5132

Public contact: 

http://www.defense.gov/landing/comment.aspx

or +1 (703) 571-3343

Message from Secretary Hagel on Furloughs

3

To all Department of Defense personnel: 

As you are fully aware, the Department of Defense is facing a historic shortfall in our budget for the current fiscal year. This 

is the result of current law that went into effect March 1. It imposes deep across-the-board cuts on DoD and other federal 

agencies. Combined with higher than expected wartime operating costs, we are now short more than $30 billion in our 

operation and maintenance (O&M) accounts – which are the funds that we use to pay most civilian employees, maintain our 

military readiness, and respond to global contingencies. 

The Department has been doing everything possible to reduce this shortfall while ensuring we can defend the nation, sustain 

wartime operations, and preserve DoD’s most critical asset – our world-class civilian and military personnel. To that end, we 

have cut back sharply on facilities maintenance, worked to shift funds from investment to O&M accounts, and reduced many 

other important but non-essential programs. 

Still, these steps have not been enough to close the shortfall. Each of the military services has begun to significantly reduce 

training and maintenance of non-deployed operating forces – steps that will adversely impact military readiness. And even 

these reductions are not enough. Since deeper cuts to training and maintenance could leave our nation and our military 

exposed in the event of an unforeseen crisis, we have been forced to consider placing the majority of our civilian employees 

on administrative furlough. 

After extensive review of all options with the DoD’s senior military and civilian leadership on how we address this budget 

crisis, today I am announcing that I have decided to direct furloughs of up to 11 days for most of the Department’s civilian 

personnel. I have made this decision very reluctantly, because I know that the furloughs will disrupt lives and impact DoD 

operations. I recognize the significant hardship this places on you and your families. 

After required notifications, we will begin the furlough period on July 8 at the rate of one furlough day per week for most 

personnel. We plan to continue these furloughs through the end of the current fiscal year. If our budgetary situation permits

us to end furloughs early, I would strongly prefer to do so. That is a decision I will make later in the year. 

Furloughs for 11 days represent about half of the number we had originally planned, reflecting the Department’s vigorous 

efforts to meet our budgetary shortfalls through actions other than furlough. There will be exceptions driven by law and by 

the need to minimize harm to the execution of our core missions. For example, all employees deployed or temporarily 

assigned to a combat zone will be excepted from furloughs. 

Your managers have been given authority to develop specific furlough procedures to minimize adverse mission effects and 

also limit the harm to morale and productivity. They will be in touch with you to provide guidance and answers. 

The President and I are deeply appreciative of your patience, your hard work, and your dedication and contributions to the 

critical mission of helping protect America’s national security. I am counting on all of you to stay focused on this vital mission 

in the days ahead. As I said the day I assumed the responsibilities of Secretary of Defense, I’m proud to be part of your 

team and I’m proud to serve with you. 

Defense.gov Speech: Page 1 of 1

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 115
M-13-11 

SUBJECT: 

EXECUTIVE OFFICE OF THE PRESIDENT 

OFFICE OF MANAGEMENT AND BUDGET 

WASHINGTON, D.C. 20503 

April 4, 2013 

Ongoing Implementation of the Joint Committee Sequestration 

Section 251A of the Balanced Budget and Emergency Deficit Control Act (BBEDCA), as 

amended, on March 1, 2013, required the President to issue a sequestration order canceling $85 

billion in budgetary resources across the Federal Government for the remainder of fiscal year 

(FY) 2013. This action was required due to the failure of the Joint Select Committee on Deficit 

Reduction to propose, and the Congress to enact, legislation to reduce the deficit by $1.2 trillion. 

The Administration continues to urge Congress to take action to eliminate the Joint 

Committee sequestration and restore cancelled budgetary resources as part of a balanced 

agreement on deficit reduction. However, until Congress takes such action, executive 

departments and agencies (agencies) must continue to implement the reductions required by 

sequestration. 

This memorandum provides further guidance on specific issues regarding the 

management and implementation of sequestration that the Office of Management and Budget 

(OMB) preliminarily addressed in prior memoranda. OMB previously issued guidance on the 

appropriate implementation of sequestration in Memorandum 13-03, P Ianning for Uncertainty 

with Respect to Fiscal Year 2013 Budgetary Resources; Memorandum 13-05, Agency 

Responsibilities for Implementation of Potential Joint Committee Sequestration; and 

Memorandum 13-06, Issuance of the Sequestration Order Pursuant To Section 251A of the 

Balanced Budget and Emergency Deficit Control Act of 1985, as Amended. 

Appropriate Use of Existing Reprogramming and Transfer Authority 

Sequestration provides an agency with little discretion in deciding where and how to 

reduce spending. All non-exempt budget accounts in a given spending category must be reduced 

by a uniform percentage, and the same percentage reduction must be applied to all programs, 

projects, and activities (PPAs) within a budget account. However, depending on an agency's 

account structure and any existing flexibilities provided by law, some agencies may have a 

limited ability to realign funds to protect mission priorities. As directed by Memorandum 13-03, 

in allocating reduced budgetary resources due to sequestration, agencies should generally "use 

1 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 116
any available flexibility to reduce operational risks and minimize impacts on the agency's core 

mission in service of the American people." Agencies should also "take into account funding 

flexibilities, including the availability of reprogramming and transfer authority." 

Consistent with this guidance, agencies with reprogramming or transfer authority should 

continue to examine whether the use of these authorities would allow the agency to minimize the 

negative impact of sequestration on core mission priorities. In doing so, agencies must consider 

the long-term mission, goals, and operations of the agency and not just short-term needs. For 

example, agencies should avoid taking steps that would unduly compromise the ability to 

perform needed defeiTed maintenance on facilities, invest in critical operational functions and 

support, conduct program integrity and fraud mitigation activities, and pursue information 

technology or other infrastructure investments that are essential to support the long-term 

execution of the agency's mission. Similarly, while agencies with caiTyover balances or reserve 

funds should consider appropriate use of these funds to maintain core mission functions in the 

short term, it is important not to use these funds in a manner that would leave the agency 

vulnerable to future risks due to a potential lack of available funds in future years. 

Agencies should consult with their OMB Resource Management Office (RMO) to assess 

options for utilizing existing authorities and ensure that any proposed actions appropriately 

balance short-term and long-term mission priorities. Agencies must also consult closely with 

their OMB RMO on any proposed actions that would reduce carryover balances or reserve funds 

below historical levels. 

Funding for Agency Inspectors General 

Funds for agency Inspectors General (IGs) from non-exempt accounts are subject to 

sequestration under the March 1, 2013 sequestration order. The head of each agency has the 

fmal responsibility for implementing the reductions required by sequestration. Upon making 

such determinations, IGs have the final responsibility for determining how their authorized 

budgets will be allocated. 

To the extent an agency has discretion in implementing reductions to IG funding due to 

sequestration, agency heads should be mindful of the independence of the Office of Inspector 

General and should consult with the IG on a pre-decisional basis on matters that may impact IG 

funding. In particular, agencies must remain cognizant of the provisions in section 6 of the 

Inspector General Act of 1978, as amended, which outline the need for IGs to maintain the 

appropriate resources and services necessary to perform their statutory duties and describe the 

manner in which IG budgets are requested. 

In cases where IG funds are not intermingled with other agency funds and exist as their 

own PP A, the IG should be provided full discretion to determine how to implement the 

reductions required by sequestration. In cases where IG funds are intermingled with other 

agency funds within a PP A, while the specific amount of reductions will vary by agency and 

account, a benchmark that should be considered by the head of the agency-in consultation with 

the IG-is to apply a percentage reduction to IG funds that is same as the average percentage 

reduction for all other funds within the PP A. Upon determining the amount of the reduction for 

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 117
IG funds in such cases, the agency head should then defer as appropriate to the IG in determining 

how the IG manages the reductions. 

Agencies should consult with their OMB RMO throughout this process as well. 

Discretionary Monetary Awards 

OMB Memorandum 13-05 directs that discretionary monetary awards should not be 

issued while sequestration is in place, unless issuance of such awards is legally required. 

Discretionary monetary awards include annual performance awards, group awards, and special 

act cash awards, which comprise a sizeable majority of awards and incentives provided by the 

Federal Government to employees. Until further notice, agencies should not issue such 

monetary awards from sequestered accounts unless agency counsel determines the awards are 

legally required. Legal requirements include compliance with provisions in collective bargaining 

agreements governing awards. 1 

Consistent with past guidance, certain types of incentives are not considered discretionary 

monetary awards for the purposes of this policy. These include quality step increases (QSis); 

travel incentives recognizing employee savings on official travel; foreign language awards for 

mission-critical language needs; recruitment, retention, and relocation incentives (3Rs); student 

loan repayments; and time-off awards. While these items are permitted, in light of current 

budgetary constraints, they should be used only on a highly limited basis and in circumstances 

where they are necessary and critical to maintaining the agency's mission. In addition, 

consistent with the policy set forth in the Guidance on Awards for Fiscal Years 2011 and 2012, 

jointly issued by the Office of Personnel Management (OPM) and OMB on June 10, 2011, 

spending for QSis and 3Rs should not exceed the level of spending on such incentives for fiscal 

year 2010. 

With respect to Federal political appointees, agencies should continue to follow the 

policy set forth in the August 3, 2010 Presidential Memorandum, Freeze on Discretionary 

Awards, Bonuses, and Similar Payments for Federal Political Appointees. OPM previously 

issued guidance on implementation of this memorandum. 

Reducing Burden for State, Local, and Tribal Governments 

To the extent agencies provide grants or other forms offmancial assistance to States, 

localities, or tribal governments, agencies should consider if there are ways to help such entities 

mitigate the effects of funding reductions due to sequestration through reducing administrative 

burdens or other standard administrative processes, consistent with applicable legal requirements 

associated with the funds provided. In doing so, agencies should consult closely with their State, 

local, and tribal partners to determine whether such steps enable public funds to be used in a 

more cost-effective manner. 

1 Consistent with legal requirements, agencies may consider engaging in discussions with employees' exclusive 

representatives to explore revisions to such provisions in existing collective bargaining agreements, in recognition of 

this guidance. 

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Department of the Navy Administrative Record for FY 2013 Furlough Appeals 118
Presenters: Robert F. Hale, Undersecretary of Defense; Susan A. Yarwood, Director, Human 

Resources Directorate

March 11, 2013 

Defense Department Town Hall on Sequestration in the Pentagon 

 STAFF: Ladies and gentleman, Mr. Hale will join us in just one minute. If I could, just a 

couple of administrative announcements. We are going to broadcast this live on the Pentagon 

Channel, so if you have a badge please remove it at this time. 

 And for the same reason, we will have a couple of folks walking around with microphones 

during the question-and-answer period. Please raise your hand if you have a question so the folks 

who are listening on the Pentagon Channel can hear your question. We'll make sure we get a 

microphone to you. 

 Ladies and gentleman, the undersecretary of defense comptroller, the Honorable Robert 

Hale. 

UNDERSECRETARY OF DEFENSE ROBERT F. HALE: Hi. Sit down, please.

 All right. So, good afternoon. So it's a fairly sparse crowd. I don't whether that's good or 

bad, in terms of what we're looking at. So my goal today is to talk to you about the budgetary 

problems that we face in 2013 that are going to require -- unless we get some legislative relief --

some major changes in what we do, in training and maintenance. And as I think you all know, 

furloughs are unfortunately a possibility. 

Let me just start by saying I'm afraid I'm going to live up to the reputation that -- the motto 

that is attributed sometimes to comptrollers that we're not happy until you're not happy. But I will 

try not to do that. And please don't shoot the messenger, OK? 

All right. Next slide, please?

 So we face two problems in the Department of Defense in 2013. One of them, of course, is 

sequestration, as I think you all know, automatic budget cuts that were put in place by the Budget 

Control Act of 2011. They were never meant to be implemented. They were meant to act as a prod 

to the Congress to make a balanced changes in the deficit and -- and move forward in that regard, 

but unfortunately that didn't happen. And so now these are in effect. 

 What they do is cut virtually every budget account in the department's budget by as much as 

9 percent. The only -- and including our wartime budgets, the overseas contingency operations 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 119
funds. The only major exemption is military personnel. The president exercised his legal authority 

last summer to exempt military personnel in support of the wartime effort.

The law -- the cuts also are mindless. Some would call them dumb and across the board in 

nature. In the operating portion of our budget, they are -- each budget account has to be cut by the 

same percent, so we have to cut Army, active O&M by the same percent as Navy Reserve O&M, 

Air Force Guard O&M, and so forth, through a dozen or so accounts. 

 On the investment aspects part of our budgets, even more detail. Every line item has to be 

cut by the same percentage, about 2,500 of them in the DOD budget. 

 And we've made a decision which I think is the only one we could make to protect our 

wartime operating funding, OCO operations funding. You can't leave General Dunford and the 

troops in Afghanistan without the funds they need to protect themselves and to wind down that war. 

 But sequestration isn't our only problem. We also have serious problems with the continuing 

resolution that's in effect. Continuing resolutions are passed by Congress when they can't get 

together and decide on a budget. They are really intended to last for a few weeks or maybe a few 

months. We're on it for six months at least. 

Essentially what they say is do the same thing this fiscal year as you did last year. It's kind 

of the Groundhog Day approach to budgeting. This particular case, what they said is in fiscal '13 

for the base budget, same funding levels as in fiscal '12 for the base budget, as I said. For the OCO 

wartime budget, they did say you can use the president's request for fiscal '13.

That left us with enough total dollars -- actually, it was a little more dollars in the C.R. than 

we asked for in fiscal '13, but they're in the wrong appropriations. They're in the wrong places. We 

had significantly increased the operations and maintenance funding, our funds that are most directly 

associated with readiness from '12 to '13 and cut back on investment. The C.R. wipes that out, so 

we have too many dollars in investment, not enough dollars in O&M.

 And -- and also, unfortunately, we are executing the OCO budget at higher levels than we 

expected. When we put it together two years ago, we underestimated the operating tempos and 

some of our transportation costs. So we've got some shortfalls there. 

 And, finally, it's not on the slide, but the C.R. doesn't give us some authorities we need. We 

can't start any new programs. We can't increase rates of buys of weapons programs, have some 

bizarre restrictions on shipbuilding that essentially ensure or demand that we buy exactly the same 

ships this year as last year, doesn't make much sense, and we can't start any military construction 

programs. 

Next slide?

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 120
 So what you see on here are numbers that indicate shortfalls in the base portion of our 

operations and maintenance budget. For sequestration, the total cut for sequestration across all the 

Department of Defense, $46 billion in fiscal '13, $13 billion of that is for base budget O&M. Then 

we made the decision I mentioned before to protect our wartime operating portion of the budget. 

The only way we can do -- protect OCO is to disproportionately cut the base budget. That adds 

another $5 billion to our shortfall in the base budget. 

 I told you the continuing resolution has the money in the wrong appropriations, not enough 

O&M dollars. That adds $11 billion to our shortfall. And finally, OCO spending is here than we 

expected, as I mentioned. That adds at least another $6 billion to $7 billion. 

 Add them up, $35 billion to $36 billion short in fiscal '13 O&M, and that's about 23 percent 

of our request. Plus, we've only got seven months to go in the year, so you can roughly double that. 

We're roughly short 40 percent of the funds we need in operations and maintenance to complete 

this fiscal year. And this is DOD-wide. By service, the picture is much different. Some of the 

services are a little better off. The Army is much worse off. It has bigger problems with regard to 

protecting wartime ops, because they're so heavy there, more money in the wrong appropriation. 

The Army's almost 80 percent short of the dollars it needs for the rest of the year in operations and 

maintenance.

 So I think this explains -- some people have said, well, gee, an 8 percent or 9 percent cut, 

how can this be this big a deal? It's not, unfortunately, when you add these two problems together. 

It's more like a 40 percent cut for the department as a whole, and even more for the Army. 

 Next slide? So a couple of months ago, we could see what was coming. We hoped that it 

would get fixed, but we realized we needed to start slowing our spending in ways that tried to avoid 

some even more draconian steps later, and we began doing that with civilian hiring freezes in most 

of our services and agencies. 

 That's not without problems. We're beginning to under-man some programs where we can't 

hire at this point. We are also affecting vulnerable populations. About 44 percent of DOD civilians 

are veterans. We hire in an average time 1,500 to 2,000 people a week in the Department of 

Defense. We are cutting back jobs for veterans in the very time when we would like to find more 

jobs for that group. 

We began releasing temporary and term employees, laying them off. In this case, several 

thousand have already lost their jobs. There are 46,000 of them -- not all will certainly lose their 

jobs, but many more probably will. Cut back on travel and conferences, and I really should say 

training, business training there. I mean, conferences conjure up this notion of a week off in Vegas, 

but many of you who've been to these conferences, they are training events, but we have cut back 

many of them.

 Sharply cutting back facilities maintenance, as much as 90 percent cuts in the remainder of 

the year, so we're just not going to fix anything at our bases except mission-critical and lifethreatening problems. Base operating cost cuts, review in delaying contracts, which often is very 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 121
inefficient. I was going to sign a contract for a year. I got a deal at a certain price. Now I cut it back 

to just seven months, so I don't have to pay as much in fiscal '13. But, of course, that pushes the 

money off to '14, when things could be just as bad, and it's a good chance the contractor is going to 

say, well, you know, maybe you won't renew it, so I'm going to want a premium in order to do that, 

is probably -- well, in the end, will cost us more. 

 But this isn't going to do it. If we absorb 40 percent cuts in O&M, and overall cuts in our 

budget, we will have to take much more far-reaching actions. Next slide?

Starting with training cutbacks, that will probably really kick in I think next month, every 

service is looking at sharp cutbacks in training, fewer flying hours, fewer steaming days, less time 

spent in the -- in ground training, just across the board, and maintenance cutbacks. And the 

combination of the two of these -- and I'll talk a little more about that on the -- I think the next slide 

-- is going to seriously adversely affect our readiness. 

 We've got problems in TRICARE. If you're not familiar with it, it's a program that pays for 

private providers to provide medical care for military retirees and some active-duty dependents. It 

looked early on -- this is -- it's an account, and so it's going to take its 9 percent cut. I think we have 

worked out changes that will allow us to pay all our bills for providers, but the price for that will be 

delays in service in some of our military treatment facilities. It will mean a virtual total cessation of 

our research program in health care and also our facilities maintenance. And we'll disrupt probably 

2,500-plus investment programs, having to reduce buy sizes on short notice, delaying programs, 

and more. 

 We are also faced, unfortunately, with the possibility of furloughs of some of our civilian 

personnel. Our overall approach to furloughs is to look at them as a last resort, but not the last 

resort. We realized that if -- if we did not do some furloughs, given the enormous cuts or shortfalls 

we're facing in O&M, we had the prospect of having to cut even more on the training side and 

perhaps having civilian personnel working with no training to support or in a depot with no funds 

to induct weapons into the depot to fix. 

 So we had determined that at least under our current situation, we will propose furloughs for 

up to 22 days for most of our civilian personnel. We will impose a policy of rough consistency and 

fairness. And by that, it means in general, we will -- we will ask all of our civilians to be 

furloughed for about the same amount of time, and the exact amount yet to be determined. 

There will be some limited exceptions, but quite limited. We will accept civilian personnel 

who are actually deployed in combat zones. We'll accept civilian personnel if they are required to 

maintain safety of life and property, but only to the extent that's true. And my example is, we've got 

30 policemen on a base, they are not automatically exempt from furloughs. The managers on the 

base have to determine whether or not they can still maintain safety of life and property either 

without furloughs or perhaps with partial furloughs of the policemen in that case.

 Timing, I'm going to say more about it on the next slide. There are a whole series of steps 

that we have to go through. And I'll address that in a moment. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 122
 I think we are deeply concerned for what this is going to do. We are all well aware that 

we're talking about the potential for 20 percent cuts in pay for five months for our civilian 

personnel, obviously going to have serious -- cause serious problems for many of our civilians, 

including a number of the people I'm probably talking to right now. And from a management 

standpoint, it's certainly going to harm productivity. There's fewer people to work, and we certainly 

can't expect that with serious adverse effects on morale, productivity will remain unaffected.

 So go to the next slide, and let me talk more about the furlough planning process. We are 

the only agency in government that has to notify Congress of our intent to furlough civilian 

authorities. None others -- no others have to, so I assume they won't. We did that on February 20th. 

There is a 45-day waiting period after we submit that notification before furloughs can start. 

 We have gone out to our commands and asked them to identify specifically any civilians 

who would be subject or would be accepted from furloughs. We have that information back in on 

the process of reviewing, and our goal is to complete that review by Friday. 

 Right after we notified Congress, we began legally required bargaining with our unions. 

There's about a dozen unions with national consultation rights. We have notified them. But there 

are probably several thousand local unions, and our local commanders are in the process of 

bargaining with them. The unions in this case don't have the right to bargain not to do the 

furloughs. They do have the right to bargain on how they're implemented, and that process is going 

on. 

 Probably some time later this month, if nothing changes, we will end up having to send 

letters to all those accepted employees and propose furloughs. At that point, there's a seven-day 

reply period for people to reply to us. Then there's a 30 -- a totaled 30-day waiting period. And at 

the end of that period, we can send actually notices of decisions of furloughs, and those furloughs 

can start.

 I might add that when that formal notice is sent, each of our civilian employees has a right 

to appeal to the Merit Systems Protection Board, and it's not quite clear to us -- we've never done 

this, and I hope we never do, administrative furloughs of this kind. It's not quite clear what that 

process will be, but the appeal right is there. 

 So these furloughs could begin as early as late April. 

 Let me just pause there, because I know this is particularly important. Any particular 

questions for me on furloughs before I go on? Yes, ma'am. I have help here from the folks from 

P&R and WHS, so... 

Q: The individuals in my organization are asking if they will be able to take all 

approximately 22 days at once so that they would be eligible for unemployment compensation in 

order to offset a critical shortfall in their household budgets. Will that be an option? 

 UNDER SEC. HALE: What we have said is that our general plan was to do one day per pay 

period in order to spread this out from a workload standpoint. We did allow our managers, if there 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 123
were special reasons why they could group these days together, to propose that, but I would expect 

in general it will be one day per period so that we can -- I mean, we've got to try to maintain some 

ability to continue the mission. You saw my bar before. One of the goals set for us by our secretary 

is to minimize adverse effects.

 I'm aware of the issue. And we would consider on a case-by-case proposals to group days 

together, but in general, it'd be one day per pay period. 

Anything else?

Q: I'm from a field activity, but I do have a question as to whether you can envision any 

sequence of events over on the Hill that might lead to obviating the need for furloughs or reducing 

the number of days? 

UNDER SEC. HALE: I'm going to come to that. I'm going to hold your question for a 

moment. I stopped, and maybe I shouldn't have, but I'll get to it on the last slide and I'll tell you 

what's going on. And, yes, there is a possibility. 

 Other questions on furloughs specifically before I -- go ahead. I'll come back to you. I 

promise. 

 Q: Mr. Secretary, I don't want to beat a dead horse here. I just want to be sure I understand. 

The 22 days is irregardless of the fiscal condition of each agency? In other words, if an agency 

controls its spending to the point where it could furlough people 5 or 10 days, they don't have that 

option, correct? 

 UNDER SEC. HALE: Yes. And the reason for it is that we will have to do some crossleveling, because we've got agencies -- I mentioned the Army that's 80 percent short of its O&M in 

the last seven months. We are going to have to do things to help some agencies that can't get by 

even with 22 days, and 22 days is the maximum legal number. So what we will have to do -- and 

there are some agencies that could avoid this -- as I said, some cross-leveling of funds in order to 

help the others. 

Q: Will the employees have some flexibility in determining what day they're actually being 

furloughed? 

 UNDER SEC. HALE: That'll be up to managers. I would think there would be some 

possibilities there. I know we've tried to work out what we could within my own organization. I 

don't want to get into specific organizations. One, I don't know, but, second, I want to leave that to 

your own supervisors and managers, but I would think there'd be some options. I think we ended up 

with -- I think it's going to be Monday and Friday primarily, which probably makes sense. But there 

are probably other options. 

 OK, let me finish up and then I'll come back to questions, but I knew this was an important 

one. So we've got a lot going on here, unfortunately. Major training cutbacks, major disruptions of 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 124
investment programs, furloughs. What is it going to do to the Department of Defense's mission? 

Next slide.

It will have serious adverse effects on our readiness, and that will be the thing most 

affected. By the end of fiscal year '13, the Army estimates that about two-thirds of its brigade 

combat teams -- active brigade combat teams will no longer be at adequate levels of readiness, 

defined as C2 and above, if that's the appropriate stage in their sequence, and almost all of their 

reserve units. This would exclude the ones that are actually deployed to Afghanistan, but almost all 

of the other units. 

What does that mean? Well, it means that if we find ourselves in another contingency 

operation, we either won't be able to respond as quickly -- they'll need more time -- or if we have to 

respond as quickly, they won't be fully trained. And I think there's some -- probably wouldn't 

happen in fiscal '13, but looking into fiscal '14, the possibility of difficulties in supporting 

Afghanistan, because some of the units that would deploy a year from now, say, won't be ready. 

Similar situation in the Air Force by the end of this fiscal year, with cutbacks in flying, 

almost all of their non-deployed combat units, fighters and bombers in particular, will not be what 

they view as adequate levels of readiness, again, delaying their potential response. 

 The Navy and Marine Corps also will see cuts in readiness, but they also -- are also 

reducing their deployments. The Navy, as you probably know, has made a decision not to support 

two aircraft carrier strike groups in the gulf, even though the combatant commander has asked for 

that help as a budgetary and also some training issues involved there. They will cut back on their 

deployments in the Pacific, probably terminate all deployments to SOUTHCOM. 

 Furloughs clearly damage productivity, as I've said before, and our civilians -- I think a lot 

of people in this country have a sense that civilians are all here at the Pentagon. You all know that 

couldn't be further from the truth. Eighty-six percent of our civilians work outside the Washington, 

D.C., area. They fix our ships, our tanks, our planes. They staff our hospitals. They teach kids in 

our schools. They do virtually every support activity in the Department of Defense, and they will 

all be adversely affected.

 And I haven't said a lot about investment programs, because there are so many of them. To 

some extent, the investment -- if you remember under the C.R., I said there's too many dollars in 

investment, too few in O&M. Some of the investment is currently being shielded. It affects -- by 

the fact that we had higher levels of investment money, but there will still be cutbacks in 

procurement and some major programs. They'll be done inevitably hastily and will add the unit 

costs at a time where we're trying to just the opposite.

Next slide?

 So what are the next steps? We've got to continue planning, detail planning for what I will 

call the worst case. And by that, I mean a year-long sequestration and a continuing resolution that's 

extended through the -- through the end of this fiscal year in its current form, in its current form, 

and that includes, regrettably, continuing to plan for furloughs. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 125
 But we are monitoring congressional action closely, and some of you, obviously, are, too. 

The House last week passed a -- it was called a continuing resolution, but for us, it is actually an 

appropriations bill for the Department of Defense. It would help. It would get the money into the 

right appropriations. Remember, I said that's one of the problems with the C.R. We've got too much 

investment and not enough O&M. It would correct that problem, and that is not trivial, and it would 

certainly help us. 

 Now, it doesn't solve all our problems. It leaves sequestration in place, and it would -- it did 

not, as we'd hoped, fix some of the OCO shortfalls, but there might be some opportunity to reprogram and a technique we use to move money around to try to meet some of those problems. 

 So as I say, it doesn't fix all of our problems, but it would certainly help. The Senate is 

examining that legislation right now. The Senate Appropriations Committee, they may introduce 

their own version of it, and perhaps as early as today, and I expect some debate over that this week. 

If that bill is enacted in its current form or something similar for us, then we'll clearly need 

to go back and look at planning. I think it is premature to say exactly what it would mean until we 

see how -- exactly what's in the legislation, but it would clearly help.

We are also watching -- although there's not much to watch -- just right now for a big 

budget deal between the president and the Congress that would affect mandatory spending, perhaps 

tax reform, and allow de-triggering of sequestration, or at least that we would hope that would be 

part of the big budget deal. 

 If that happens, I suspect it won't happen until the summer. You may recall that there was 

an agreement to extend the debt ceiling through May 19th. And then there's about two months of 

period when Treasury can take steps to push off a hard hit of the debt ceiling, so it's not likely to 

occur until July, and I suspect that will be the forcing event for a big budget deal. 

 So we'll watch both -- we'll watch the Hill certainly in the next two weeks on the potential 

revisions to the continuing resolution and watch for a possible de-triggering of sequestration and try 

to replan as best we can, depending on what Congress does. 

 So, you know, I'll continue with one of my favorite quotes from Winston Churchill, when 

Churchill once said you can always trust Americans to do the right thing after they've tried 

everything else first. I keep hoping we'll get to that. It seems like we have tried everything else, to 

me, at least, and that we will do the right thing and that we will make some major changes in our 

budget that allow us to return to a more normal budgeting process and a more stable top line for 

defense.

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 126
 With that, I'm going to stop, and I would ask if there are any other questions for me. Sir? 

(CROSSTALK)

 UNDER SEC. HALE: You know, I think it's -- yes, it's possible, but I think it's premature 

until we -- wanted to see whether it's enacted or not. This is not a certainty. I mean, it's -- Congress 

has struggled. I guess that's an understatement -- to make changes like this. But if it -- if they do 

enact it, yes, I think it's possible. It's just premature to speculate on how much. And we'll need to 

look across the services are in pretty different situations. I told you the Army has by far the worst 

problem, so we'll have to look at how we can help them and see if we can bring it about.

 And I think I misspoke. I think I said one day per pay period for furloughs. Unfortunately, 

it's two days per pay period, one day a week, so -- to get to the 22 days that would -- if we started in 

late April, so I'm sorry. Let me correct that.

 Any other questions? 

 Q: Sir, you indicated we had fund scenarios where we didn't need funds. Has the department 

taken steps during this continuing resolution not to expend funds where they weren't needed and 

did not benefit the national defense, such that those funds would then be available, should we get 

an appropriation in the right areas? 

 UNDER SEC. HALE: Yeah, I mean, I think the answer is yes. First off, I -- I would like to 

think that we don't have funds that don't benefit the national security, but there are clearly some 

lower priority areas, and one of the first things we did -- even though I think it's valuable -- is to cut 

back severely on TDY travel, conferences I mentioned earlier. We -- although, again, I think it's 

valuable, you can postpone facilities maintenance, fixing the -- you know, painting the barracks. 

We'll have to do it next year, even though we may not have funds then, either, but it's a decision 

that we made.

 We did civilian hiring freezes, which I also didn't want to do. It will gradually damage our 

mission, but it's an area we felt we could begin to hold down on spending. Base operating support, 

cut 10 percent to 30 percent in the services. All of this started in the late January timeframe, and so 

it's beginning to -- it will help us minimize the more draconian steps we'll have to take if this stays 

in place for the whole year.

So, yes, we tried to take some near-term steps. Prior to March 1st, when sequestration 

kicked in, one of our criteria is that they be largely reversible, so you postpone facilities 

maintenance. If we were to have gotten back to a stable budget that we anticipated, we could 

probably have gotten that done in the last half of the year. 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 127
 But as it turns out, we're not going to be able to recover, more than likely. And so, yes, I 

think that these things will, as I say, minimize or make less draconian the steps we have to take for 

the rest of the year.

Q: Sorry.

UNDER SEC. HALE: Go ahead.

 Q: Building on your comment of largely reversible, legally speaking, is there anything that 

would prevent an individual if they chose from going back and re-coding the days that they took as 

furlough days to an annual leave day or a comp time, a travel comp time day, if a deal was reached 

and the department decided that we didn't need someone to take 22 days, we just only need 

civilians to take four days, and in this scenario, think about -- let's say I chose to do a month 

furlough the month of May, and I'd taken my full 30 days, but by the end of the May, there was a 

deal reached, and the department made a decision we only need all civilians to take five furlough 

days. If I chose, is there a legal restriction to recode my hours? 

 UNDER SEC. HALE: I'd suspect we'd have a problem paying you back. Anybody want to 

help me here?

 I mean, if you took 30 days -- 22 days right away, I don't -- I don't think -- and when we've 

seen shutdowns -- the '93 and '94 shutdown -- '94, I guess it was -- Congress actually allowed us to 

pay people for the time they were gone. That could happen again, but I find it unlikely, and so I 

think if you've taken a furlough day, I don't think you're going to get it back. But do you want to 

add to that? 

 SUSAN A. YARWOOD: I'd be happy to, sir. Hi, I'm Susan Yarwood. I'm from Washington 

Headquarters Services, the operating personnel office for the secretary of defense.

 When you sign a timecard, you are certifying that you are in a particular status. And so we 

don't see any capability to go back and change the status, because you were where you were at that 

particular time. And as the secretary said, unlike other furloughs, this is not -- we don't anticipate if 

we are unfortunately furloughed, that this is going to be the kind of furlough where you can expect 

to get money back.

 That's, again, one of the reasons why we're trying for the eight hours per week, 16 hours per 

pay period, so that people across the Department of Defense are not disproportionately impacted by 

how they take their furlough. 

UNDER SEC. HALE: Thanks, Susan. Another one here? 

 Q: Sir, can you discuss the conversations with the Senate? And have we conveyed the 

entirety of the amount we need and the flexibilities and things like that and your sense of the 

prospects on that? 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 128
 Another one down here next, and then we'll take this one first.

 Q: Hi, I'm an IPA, and I'm curious if there -- a decision has been made as to whether or not 

you might try to renegotiate this fiscal year IPA contracts. And if not, are IPAs going to be affected 

by furloughs... 

(CROSSTALK)

 UNDER SEC. HALE: So I knew there was a reason I asked Susan here. (Laughter.) 

Thank you.

 MS. YARWOOD: It depends upon where you are an IPA. So if you look at the OPM 

guidance on the web, it categorizes IPAs as a type of employee. Now, in the office of the secretary 

of defense, we have several dozen of those. And our current intent is to work with the employing 

organizations, the nonprofits, the academics, the academic organizations, and renegotiate to the 

level that the civilian employees in the department must take a cut to try to equal it out, another 

way to save some money. 

 UNDER SEC. HALE: I'm on a roll here. Don't sit down. Don't get too comfortable. 

(LAUGHTER)

 Q: No, this isn't a legal question. I just wanted to be sure we understand, the basis for the 

sequestration calculation is F.Y. '12 enacted appropriation base, and the calculation based off of 

that, not the P.B. '13 numbers, is that correct? 

 UNDER SEC. HALE: Yes. I mean, it's the -- it's the fiscal '12 continuing resolution 

annualized, but basically it's what you just said. 

 Q: Thank you, sir. 

 UNDER SEC. HALE: That's correct. If, incidentally, we get an appropriation, it will 

change, we will then use that as the base, and if you followed me, I said we have too much 

investment and not enough O&M, we're going to have more O&M, but less investment, and it will -

- it will cause us to have to go back and look at a number of our investment programs again, and 

there will probably be some more far- reaching changes required there, but we'll worry about that 

once we see it.

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 129
 UNDER SEC. HALE: Right. The $85 billion is the government-wide sequestration cut. 

Ours is -- there are two sequestrations for us potentially. The one that occurred on March 1st was 

about $41 billion. Could be another $6 billion or so, $5 billion to $6 billion, which will take us to 

$46 billion in fiscal '13. 

 Then the Budget Control Act has provisions that reduce the ceilings on spending, 

discretionary spending, through fiscal '21. And for us, DOD would be about a $52 billion cut per 

year in fiscal '14 through '21. 

 Now, if there's any good news in that, it's not governed by these kind of mindless 

sequestration rules, assuming that we comply with them, and I guess we would -- but it is a huge 

cut, and I think without question would require that we step back and re-evaluate our defense 

strategy, and then re-evaluate our program, and we'd almost certainly have to go to substantially 

smaller military forces, and so we would no longer be able to protect military personnel in that 

environment, I think, without question, and we would have to make cutbacks in support on the 

modernization, as well. 

 So we have not done that yet. We're waiting to see where Congress is headed and whether 

or not a big budget deal at least limits the size of the out-year cuts, but there are clearly some 

further cuts coming, and we will have to accommodate them. 

Q: Sir -- excuse me -- recent memos from both OMB and yourself regarding budget 

uncertainty, talked about the suspension or elimination of monetary cash awards. Obviously, we're 

coming up to the performance plan appraisal for 12s and below. Could you elaborate on that or let 

us know when we could expect to get clarifying guidance with regard to whether or not a QSI is a 

monetary award? Or can we still use time-off awards?

 UNDER SEC. HALE: I'm going to let Susan or somebody help me on the second one, but 

OMB has directed that we not -- until further notice, as their words, pay civilian awards, and so we 

will obviously abide by that. And it was in my memo. 

 Now, the -- anybody here want to help me on the QSI question? 

 MS. YARWOOD: We're working very closely with the P&R team, D.C. (pass ?), who is 

engaging with OPM every day. We are expecting OPM to come out with some clarifying guidance 

about whether or not a QSI is, in fact, a type of monetary award under the OMB memo. And so as 

soon as we get that, you'll see big blasts go out through the defense media. 

Q: (OFF-MIKE)

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 130
MS. YARWOOD: Yeah, same thing with time off. Yeah, we are -- we're waiting. And we 

are hoping that we have some flexibility.

MS. YARWOOD: Yeah. Yeah.

 UNDER SEC. HALE: You mean compensatory time off? 

MS. YARWOOD: Compensatory time off, yes. Yes, sir. 

UNDER SEC. HALE: OK.

MS. YARWOOD: (OFF-MIKE)

 UNDER SEC. HALE: You know, one of the first questions I asked when we started this 

months ago now was, we ever done this before? And fortunately, the answer is no. We've had 

furloughs. We've had laps of appropriation furloughs, and at least in '94, but I don't believe we've 

ever done anything this large. Let's hope we don't, because it's not going to be good for anybody, in 

my view, including the department. But we are kind of feeling our way with regard to the rules. 

Anything else?

 Q: Yes, sir. From a morale perspective, understand that the Senate-confirmed politicals are 

exempted from furlough. Can you tell me, have you had a rush to your office to see how many of 

the politicals are going to donate 20 percent of their pay to the Treasury? 

 UNDER SEC. HALE: I wouldn't call it a rush, but you're right. Somewhat embarrassingly, 

at least to political appointees like me, Senate- confirmed ones are exempt. The other politicals are 

not. I have not had a rush. For what it's worth, I will follow Secretary Carter's lead and others, if it 

comes to that. Another good reason for this not to happen. But, no, we have not had a rush, nor 

would I ask them. I don't need to know this. 

Just for the record, we can't cut people's pay. It's against the law. Same reason we can't let 

you work during furlough periods. I probably should have said that. I imagine you've heard that. 

You can't work during -- legally, you can't work -- you can't be on your BlackBerry, because it 

constitutes an extension of our -- of our appropriation in Congress's mind, and so it is illegal. And 

for the same reason I can't take a cut in pay, but you could make a contribution to the federal 

government or other organizations in the equal amount. 

Anything else? Ma'am? Yeah.

 Q: Considering the 22-day question that you had back there, I was wondering -- and hearing 

from over there that the Air Force may be in better shape. Is there a possibility where one service or 

the other could not furlough and another one furlough? 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 131
 What we'll do instead is try to level the money. And to the extent we have transfer authority 

to do it, we will try to move money from the services that are a little bit off and to those that are 

less well off. But I still think we will be able to look at our -- re-look at our overall plan, if and 

when we see this legislation enacted. It is premature to say whether how much that's going to help. 

All right. Yes, ma'am?

 Q: Sir, if we are continuing to operate under a continuing resolution past the current fiscal 

year, will the furloughs also continue then into the new fiscal year? 

 UNDER SEC. HALE: Banish the thought. I don't think so. I mean, if -- first off, I certainly 

hope we're not under C.R. again. But even if we are, if we're going to face these sort of cuts in the 

future, we will -- and we'll -- and we'll start soon -- we will have to re-look at our strategy. We'll 

have to begin to cut forces, military forces, to accommodate a lower budget and modernization. 

And with that, there will probably be some civilian cuts, too, but I wouldn't anticipate that we 

would do furloughs. 

The only reason we're doing these is that we're seven months, five months into the fiscal 

year. It actually costs money in the first year if we do a RIF action because of unscheduled or 

unused leave and separation payments. And so RIFs are not an option, because they would have 

made the situation worse in fiscal '13. On the other hand, if we know we're going to a lower level of 

personnel, both military and civilian, we will probably -- we will have to move to RIFs, I'm afraid, 

and probably will have to do some involuntary separations of military. But I think we would avoid 

furloughs at all cost. 

 Q: How are you doing, sir? I just wanted to clarify, for consultants paid and unpaid, will 

they be furloughed, as well? 

 UNDER SEC. HALE: Consultants? 

Q: Yes.

 UNDER SEC. HALE: Well, that's going to depend on the nature -- no, they wouldn't be 

furloughed. I mean, if you're in a consulting agreement, I don't think -- I think I'm speaking right 

here. If you're in a consulting arrangement, you got a contract with us, essentially, right? Go ahead. 

Keep me out of trouble. I know that's not easy. 

 MS. YARWOOD: I know, sir. The consultants within the Office of the Secretary of 

Defense group, if they are paid, we are asking organizations not to call them for a certain number of 

days so that their time will also be reduced. But for obviously the unpaid consultants, they can 

Department of the Navy Administrative Record for FY 2013 Furlough Appeals 132
continue to work, come to the board meetings that they support, et cetera. Does that help, (Brandon 

?)? All right.

Anything else? Yes, ma'am.

 Q: You mentioned cross-leveling funding, rather than having different applications of 

furloughs across the department. Will that require any sort of reprogramming to make that happen? 

UNDER SEC. HALE: Yes, and -- and we will be restricted at some point. There are legal 

limits on the amount of reprogramming we can do, so we're going to have to examine our situation 

once this legislation is passed, assuming it's passed, and then plot a course from there. But, yes, it 

would. 

 OK, folks. So I know this wasn't a happy time. I do appreciate your sticking with us, at least 

I hope you will, and, you know, as I said, I think we will work or way through this unfortunate set 

of events, but I appreciate what you do for the Department of Defense and for your country. So 

thank you for coming today, and have a good rest of the day. (Applause.) 

-ENDDepartment of the Navy Administrative Record for FY 2013 Furlough Appeals 133