A number of human capital management tools and flexibilities are available to assist agencies in their recruitment and hiring processes. The competitive service and excepted service hiring approaches provide different and complementary ways to acquire employees in the general schedule (GS) grades of GS-15 and below. In addition, agencies may also appoint individuals to SES positions through a competitive process or make noncareer SES appointments without competition. While recognizing the need for flexibility in hiring employees, the federal government also seeks to assure that appointments are based on merit. The Civil Service Reform Act of 1978 (P.L. 95-454) set out a number of merit system principles and required that federal personnel management be implemented in a manner consistent with those principles. The principle pertaining to appointments states that “ecruitment should be from qualified individuals from appropriate sources in an endeavor to achieve a work force from all segments of society, and selection and advancement should be determined solely on the basis of relative ability, knowledge, and skills, after fair and open competition which assures that all receive equal opportunity.” OPM is responsible for implementing the Civil Service Reform Act and other personnel-related laws and for developing regulations to ensure that the intent of merit system principles is implemented. OPM delegated examining authority to Treasury—on behalf of Customs—on December 20, 1995. The delegated examining authority requires Customs to conduct competitive examinations that comply with merit system laws and regulations as interpreted by OPM’s Delegated Examining Operations Handbook. The majority of the federal civilian workforce obtained their positions by competing against others through the competitive service examination process. The examination process is one of the processes intended to assure merit system principles are complied with and includes notifying the public that the government will accept applications for a job, rating applications against minimum qualification standards, and assessing applicants’ relative competencies or knowledge, skills, and abilities (KSA)against job-related criteria to identify the most qualified applicants. The law provides for necessary exceptions to the competitive service process, however, when conditions of good administration warrant. OPM has been delegated broad authority for excepting positions from the competitive service when it determines that competitive examination for those positions is impracticable. “Impracticable to examine” means that it is impractical or unreasonable to apply the qualification standards and procedural and other requirements established for the competitive service. If OPM decides a position should be in the excepted service, OPM authorizes the positions to be filled by excepted appointment under Schedules A, B, or C. The Schedule A authority is for positions in the excepted service, other than those of a confidential or policy-determining character, for which it is impracticable to hold a competitive examination and the appointments are not subject to the basic qualification standards established by OPM. While there are many types of Schedule A positions excepted by OPM governmentwide, such as chaplains, attorneys, and certain positions for which a critical hiring need exists, agencies may also petition OPM to establish Schedule A appointing authority specifically applicable to their agency. OPM decides on such single-agency requests on a case-by-case basis. Treasury’s Schedule A authority for Customs Service positions has been approved and amended several times over a period of almost 35 years. For example, in 1963, OPM approved Treasury’s request for single- agency Schedule A appointing authority for 25 criminal investigator positions at Customs. In 1991 and 1997, OPM amended Customs’ Schedule A authority by increasing the number of criminal investigator positions at Customs to 200 and 300 positions, respectively. Individuals appointed to Schedule A positions may be converted to publicly announced competitive service positions by competing for those positions. In addition, employees in certain types of Schedule A positions—such as positions filled by mentally retarded and severely physically handicapped persons—may be converted without competition to competitive service positions upon the completion of 2 years of satisfactory service. Employees in Schedule A positions may also compete for career appointments to SES positions, or be given noncareer or limited-term SES appointments noncompetitively. Depending on the position and the status of the individual, the noncompetitve appointments may require OPM authorization and approval from the White House’s Office of Presidential Personnel. The agency appointing official determines whether an individual meets the qualification requirements of the SES position. Treasury requested, on August 6, 1998, that OPM amend Customs’ Schedule A authority to include 10 positions for oversight policy and direction of sensitive law enforcement activities. Treasury’s request letter—on behalf of Customs—explained that Customs had almost reached its limit of 300 criminal investigator positions previously authorized by its Schedule A authority. Treasury requested an amendment to the authority to authorize Customs to fill an additional 10 positions and to broaden the authority so that the positions included providing oversight and direction to sensitive law enforcement projects and coordinating such initiatives with other federal agencies at the national level, including undercover and intelligence work. The justification for including the additional 10 positions under a Schedule A authority was that “due to the sensitive nature of the operations, these positions require a unique blend of special characteristics, skills and abilities that cannot be announced to the general public, and for which it is not practicable to examine.” OPM approved the authority for the 10 positions on August 21, 1998. In making the approval, OPM officials said that they had evaluated Treasury’s request and had based their decision on (1) Treasury’s assessment of whether the positions were impracticable to examine for and (2) prior Schedule A approvals that OPM had granted for circumstances similar to Treasury’s newly requested positions. Neither statute nor regulations define detailed criteria for determining which positions are impracticable to examine for. OPM officials told us they use their knowledge of the duties and responsibilities of the positions and the examination process to make a judgment as to which positions are impracticable to examine for. The OPM official who reviewed the request and recommended its approval said that her determination that it was impracticable to examine for such positions was based primarily on Customs’ assertion that the positions were sensitive in nature and involved law enforcement activities. In addition, an OPM official said that the positions, as generally described in the request, were similar to law enforcement type positions that OPM had approved in Treasury’s Office of the Under Secretary for Enforcement. In amending the Schedule A authority, OPM did not restrict its use to any specific job or occupational series. OPM said that granting general authority—without specific positions or occupational series—is a standard OPM practice. For example, OPM approved Schedule A authority at Treasury for no more than 20 positions supplementing permanent staff studying international financial, economic, trade, and energy policies and programs, with employment not to exceed 4 years. Customs appointed nine individuals to Schedule A positions using the amended authority granted by OPM between the time of OPM’s approval on August 21, 1998, and the most recent appointment on January 14, 2001. These appointments were two identical law enforcement specialists, a public affairs specialist, a law enforcement appropriations officer, a strategic trade adviser, a special assistant in the Office of Internal Affairs, a program manager for air interdiction, a deputy executive director of air/marine interdiction, and a senior adviser on various aspects of oversight policy and direction of law enforcement activities. Customs can currently create 4 new Schedule A positions under the authority for the 10 positions because 1 position was not filled and the positions—of the 3 appointees that subsequently converted to competitive service positions— were terminated and no longer exist. Although the circumstances surrounding the initial appointments of six individuals did not appear inconsistent with the authority, events subsequent to three appointments were apparently inconsistent with the justification Treasury used in first requesting the authority and may have provided two of the three appointees with an unfair competitive advantage. In addition, while the six initial Schedule A appointments did not appear inconsistent with the authority, the timing of two of the six appointments could give the appearance of political favoritism. The circumstances resulting in two Schedule A appointees eventually being hired into identical competitive service positions appear to have been inconsistent with the justification used in the original request for the Schedule A authority. The appointees—a law enforcement specialist and a public affairs specialist—were initially placed in Schedule A positions that Treasury’s request to OPM asserted could not be announced to the public and were not practicable to examine for. After the appointees performed the duties and responsibilities of these positions for over a year, Customs created identical competitive service positions, advertised the positions, examined applicants, and filled the positions with the two Schedule A appointees. Customs’ ability to ultimately hold a competition for these positions appears to have conflicted with Customs’ original justification when requesting the Schedule A authority. Further, the appointees may have gained an unfair competitive advantage while serving in the Schedule A positions. Customs’ officials stated that when it was decided that the law enforcement and public affairs specialist positions were needed, no such positions existed at Customs. Accordingly, to facilitate hiring, given the unique combination of skills required for the positions, they believed that using the Schedule A authority was appropriate and the best mechanism. About 13 months after appointing one of the law enforcement specialists and about 19 months after appointing the public affairs specialist, Customs determined that these positions should be established as competitive service positions identical to their former Schedule A positions. Customs officials justified competitively recruiting for the law enforcement position because the former Commissioner had determined that there was a permanent need for the position to improve Customs’ efforts in combating various types of crimes. Similarly, the public affairs position was created in the competitive service because the Assistant Commissioner for Public Affairs determined there was a permanent need for the position (1) to establish and maintain effective working relationships with top officials of other federal, state, and local agencies and members of the media and (2) to oversee Customs’ antidrug enforcement public affairs program.