Federal Managers Association

To view a copy of the testimony, please visit FMA online at: www.fedmanagers.org.

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WHAT’S HAPPENING ON CAPITOL HILL?

CONGRESS HOLDS HEARING ON MANAGING DIVERSITY IN SES

The House Oversight and Government Reform Subcommittee on the Federal Workforce, Postal Service and the District of Columbia held a joint hearing with the Senate Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia on managing the diversity of senior leadership in the Senior Executive Service (SES) and the upper level employees in the U.S. Postal Service (USPS) on April 3, 2008. Senate Subcommittee Chairman Daniel Akaka (D-Haw.) epitomized Congress’ desire to make the SES more representative of the population at large, remarking, “When an agency is developing new policies and initiatives, a diverse workforce helps ensure a cultural understanding that can lead to new, creative directions or avert unintended problems before they arise.”

The legislation being discussed was H.R. 3774 and S. 2148, which attempts to make the SES more representative of the American population by boosting the number of women and ethnic minorities into the highest echelons of public service. Both bills call for the re-establishment of the Senior Executive Resource Office within the Office of Personnel Management (OPM). This office will be authorized to guide agencies on such SES employee issues as recruitment and oversee the SES pay system. The office would establish an SES mentoring program and collect statistics on the composition of the SES. Both bills will establish a SES evaluation panel which will consist of three SES members, of whom at least one shall be a woman and one shall be a racial or ethnic minority for vacant positions in the Service.

The Government Accountability Office (GAO) testified at the hearing and demonstrated incremental increases in the number of women and minorities in the SES. In October 2000, there were 6,110 people in the SES, 23.6 percent were women and 13.8 percent were minorities. As of September 2007, the number of SES employees numbered 6,555; with women representing 29.1 percent of the SES and minorities 15.8 percent. The only decrease among minorities occurred in African American men, whose fiscal year 2007 actual representation of 5 percent was less than the October 2000 baseline of 5.5 percent. As for federal employees at the General Schedule (GS) 14 and 15 (the future SES employees) levels, the data indicated an increase for minorities and women in both of these pay levels. Currently, executive agencies use Executive Resources Boards to review the qualifications of eligible candidates for initial SES career appointments and recommend the best qualified. Another area of concern discussed at the hearing was OPM’s 2006 estimate that 90 percent of the SES will be eligible for retirement over the next ten years.

OPM Associate Director for Strategic Human Resources Policy Nancy Kichak testified that the legislation is not necessary to ensure the diversity of the SES. Kichak stated that the most effective measure for recruitment is ensuring an effective pipeline into the SES by developing future leaders through training and succession planning programs. Kichak highlighted that the best vehicle for increasing diversity in the SES is the SES candidate development programs. From January 2000 to July 2007, there were 953 graduates of agency SES candidate development programs, and 623 were placed in the SES. Twenty-seven percent of these graduates were minorities and thirty-nine percent of the graduates of these programs were women. OPM also argued that the current framework of the Executive Resources Boards could encourage more diverse board members.

Officials at federal agencies also testifying at the hearing highlighted their recruitment endeavors. Acting Chief Human Capital Officer Bray Barnes from the Department of Homeland Security (DHS) noted the strides his agency is making in boosting diversity throughout the agency and in the SES. Mr. Barnes informed the Subcommittee that DHS is preparing current GS-14s and 15s for SES positions through mentoring programs, rotational assignments, fellowships, and a SES Candidate Development Program. DHS has created an SES level Director of Recruiting and Diversity within the Chief Human Capital Office who is tasked with recruiting diverse talent for all jobs within DHS.

Federal employee management organizations were given the opportunity to voice their support or concerns with the legislation. Bill Bransford, General Counsel for the Senior Executives Association (SEA) agreed with most of the language in the proposed legislation with the exception of the provision that requires diversity panels in the selection of SES candidates. Bransford cited the panels could possibly slow the SES hiring process and that the legislation is “mandating another layer of bureaucracy in what is already a cumbersome process.”

However, the other employee organizations present argued that the voluntary recruitment of women and minorities has produced lackluster results in the SES and the top level General Schedule federal employees. They also indicated that the current number of SES employees is not representative of the general population. The employee groups countered SEA’s view, arguing the panels are a substitute to the Executive Resources Boards.

Information on H.R. 3774 and S. 2148 can be found at http://thomas.loc.gov/. Visit http://federalworkforce.oversight.house.gov/ for more information on the hearing.

GAO TO DOD: EASE RELIANCE ON CONTRACTORS

Then-Comptroller General of the United States, David Walker from the Government Accountability Office (GAO), testified at a House Armed Services Subcommittee on Readiness hearing on March 11 on the Department of Defense’s (DOD) reliance on contractors. According to GAO, in making the decision to use contractors, agencies have experienced challenges determining what functions should be contracted out, developing a workforce strategy to address the use of contractors and insuring the appropriate oversight of contractors. DOD’s reliance on contractors to support deployed forces and to perform maintenance and logistical support is a challenge DOD faces in managing a dual workforce.

The federal government spent $254 billion on contractors in fiscal year 2007. Acquisition of products and services provided by contractors consumes a quarter of discretionary spending government-wide, with services making up 60 percent. GAO reported that service contracts have increased from $85.1 billion in fiscal year 1996 to $151 billion in fiscal year 2006, a 78 percent increase. This surge can be attributed to the combat operations in Iraq and Afghanistan, where there are 196,000 contractors.

Specifically, DOD’s reliance on contractors has grown exponentially. Funding for contractors to perform depot maintenance has grown from $4 billion in 1987 to $13.8 billion in fiscal year 2007, a 246 percent increase. DOD uses both government and contractor depots. During the same period, the amount of funding for depot maintenance performed at government depots increased from $8.7 billion to $16 billion, an 85 percent increase. From 1987 to 2000, funding for government depot operations remained stagnant while contractor depot operations received an 89 percent increase.

Comptroller General Walker noted that the 1995 Commission on Roles and Missions assumed outsourcing would produce a 20 percent savings on government functions due to competitive competitions. The policy that was implemented did not follow the stated aim of the Commission. GAO concluded that 91 percent of DOD depot maintenance contracts were awarded non-competitively.

Since 1992, GAO has designated DOD contract management as a high-risk area because of DOD’s acquisition workforce practices. GAO was not alone to voice this concern concerning the management of contractors by the department. The National Defense Authorization Act for Fiscal Year 2008 called for the creation of a Commission on Wartime Contracting to assess the government’s reliance on contractors in Afghanistan and Iraq. The act also created a contingency contractor training requirement for military personnel outside the acquisition workforce. As a result, DOD has taken strides to oversee contractors deployed with U.S. forces. As of February 2008, DOD had created a database that includes the records of 80,000 contractors working in Afghanistan and Iraq.

Many of the issues identified by GAO regarding the management and oversight of contractors supporting DOD functions stems from the agency’s reluctance to plan for contractors in its readiness reporting when DOD regularly reports the readiness status of its personnel. GAO is calling for agencies to clarify inherently governmental functions to illuminate ambiguity agencies could face when determining which tasks to outsource.

Overall, federal contracting practices have been under scrutiny by Congress. The House Oversight and Government Reform Committee recently passed H.R. 3033 which would establish a centralized government database on all government contracts awarded and would include information on contractors who have had contracts terminated either by another federal agency or by a state government. That same day, the Committee passed H.R. 3928 which requires contractors that receive more than 80 percent of their annual gross revenues from federal contracts disclose the names and salaries of their most highly compensated officers if the company or individual receives more than $5 million in annual gross revenue from federal contracts and if they are not a publicly traded company.

Please visit: http://www.house.gov/hasc/ for more information on the DOD hearing. The GAO report, GAO-08-572T, can be found at http://www.gao.gov/.

CONGRESS HEARS DIFFERING OPINIONS ON RETIREEZ SYSTEM

The Government Accountability Office (GAO) fired a shot across Office of Personnel Management’s (OPM) bow, chastising the agency’s progress on the federal retirement modernization program known as RetireEZ. GAO sent a letter to the Chairmen and Ranking Members of the House and Senate Appropriations Subcommittee on Financial Services and General Government on March 28, remarking on OPM’s progress report on the retirement program.

On January 31, GAO released GAO-08-345, claiming the RetireEZ system is failing to set and meet performance baselines and was overly reliant on false budget estimates. The 2008 fiscal year omnibus appropriations bill directed OPM to submit to Congress a report on how it addressed four key concerns identified by the GAO in January.

GAO narrowed its sights on the RetireEZ’s Retirement Systems Modernization (RSM) program and the Defined Benefits Technology Solution (DBTS). GAO made recommendations for improving RSM’s system testing, system defect resolution, cost estimation, and the programs earned value management. The DBTS is designed to allow federal employees and retirees an online self-service that allows users to access their retirement accounts and records, submit transactions online, monitor claims and forecast retirement income. The report faults OPM for not doing enough to demonstrate the performance of the system.

GAO’s letter to Congress reported that OPM did not verify whether the new system produces the same results as any pre-existing systems, whether the system can accurately calculate benefits, whether the test meets the performance requirements pertaining to processing and time requirements, and the operational readiness of the new system for consumers. GAO was also concerned with OPM’s failure to have the program independently tested.

Prior to RetireEZ, federal retirees could anticipate an interim of reduced annuity payments once they retired. RetireEZ allows employees to receive their full annuity at the first payment. In response to recommendations made by GAO, OPM Director Linda Springer remarked on April 1, “We are pleased to report the majority of cases that processed to date under RetireEZ matched the legacy calculations.” Director Springer countered GAO’s assessment of the program. “In all Wave 1 cases OPM paid full retirement benefits at the payment commencement date. No longer are retirees under the new system receiving interim payments and waiting for months until their actual payments amounts are calculated… All Wave 1 new retirees are getting better service because of RetireEZ.”

OPM launched the program on February 25 and the initial rollout affected 26,000 active federal employees. Federal employees in the Executive, Legislative and Judicial Branches, as well as employees in the U.S. Postal Service will enroll in RetireEZ by February 2009. For more information on RetireEZ, please visit http://www.opm.gov/. GAO’s letter to Congress, GAO-08-576R, can be found at http://www.gao.gov/.

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WHAT’S NEW IN THE EXECUTIVE BRANCH?

NNMA BEGINNING PAY-FOR-PERFORMANCE PILOT

The Department of Energy’s (DOE) National Nuclear Security Administration (NNSA) launched a five year pilot pay-for-performance program. The new system ends the traditional General Schedule (GS) pay grades and moves into four broad pay bands. The new pay band structure features comprehensive career paths covering professional, technical, and administrative and support occupations with three or four pay bands in each career paths. This pilot follows two years of discussions, planning and design which includes three phases of employee briefings and managerial training.

The new system will allow managers the flexibility to set higher pay for their employees through appointments, promotions, and performance evaluations. NNSA believes this will assist their recruitment efforts and will allow the agency to remain competitive. The changes instituted by NNSA will allow hiring managers to offer higher starting salaries for positions.

Out of the 2,500 federal employees employed by NNSA, 2,000 will participate in the pilot program. If the program is successful, the performance-based program will become a permanent alternative to the GS system. NNSA Administrator Thomas D’Agostino stated, “NNSA needs to continue to attract high-quality people with technical skills for our important national security programs.” D’Agostino believes, “This pilot project gives us the tools necessary to do so in an ever increasingly competitive job market.”

NNSA was established in 2000 as a semi-autonomous agency within DOE, responsible for the safety, security, reliability and performance of the U.S. nuclear weapons stockpile and provides the U.S. Navy with nuclear propulsion technology. The agency responds to radiological emergencies in the U.S. and abroad.

More information can be found at: http://nnsa.energy.gov/. 

OPM ASKS CARRIERS FOR ADDITIONAL FEHBP BENEFITS

In a letter to Federal Employee Heath Benefit Program (FEHBP) providers, the Office of Personnel Management (OPM) called on the providers to “make innovative proposals to further increase consumer choice and to improve the quality offered through their health care delivery systems.”

The annual “call letter” marks the beginning of the period of negotiations over 2009 benefits and rates in FEHBP. OPM said in the letter it plans to complete the negotiations be August, allowing federal employees the opportunity to select new health care options during the annual open season that occurs in the fall.

Among OPM’s many suggestions was a call for enhanced hearing benefits for adults, including hearing aids. In addition, OPM encouraged proposals for High Deductible Health Plans (HDHP) with Health Savings Accounts (HSA) and Health Reimbursement Arrangements (HRA). OPM also suggested carriers to expand their health care cost and quality transparency initiatives, to broaden the use of health information technology (HIT) and to educate consumers on the value of HIT and transparency.

However, OPM will not entertain any proposals for enhanced FEHB dental benefits, nor will it allow for any changes to current dental or vision benefits for 2009.

The letter can be accessed at: http://www.opm.gov/carrier/carrier_letters/2008/2008-06.pdf.

MORE NEW HIRES MAKE THE PAY GRADE

The Merit Systems Protection Board (MSPB) released a report on March 25 outlining the current hiring trends of upper level federal employees from outside the government. MSPB randomly surveyed 1,000 non-supervisory and 815 supervisory new hires within the General Schedule (GS) 12 through 15 levels. The report indicates agencies are recruiting highly skilled employees outside their current employee pool for positions in information technology and national security.

Traditionally, the majority of new hires have been appointed to positions GS 11 or below. While this continues to be the norm, there is a growing trend in the number of new hires that are appointed above a GS 12. The study focused on: why supervisors hired employees outside the federal government; the demographics of the new hires and the factors influencing their hiring; what attracted the new hires to federal service; and, if barriers exist to hiring external applicants.

The MSPB study indicates that the government’s hiring practices mirrors its priorities. Eighty percent of upper level new hires were brought onboard by ten agencies, with the Department of Defense (DOD) accounting for 47 percent of hires. The majority of these positions were filled by employees who were former federal contractors and military personnel, comprising 48 percent of the upper level new hires in fiscal year 2005. The demands of the day dictate the types of people needed to be hired by an agency.

Supervisors explained in the survey why they hired employees who were not current federal employees. Sixty-eight percent of supervisors cited the outside candidate as being the most qualified person for the position, 64 percent explained the candidate filled a skill gap while another 47 percent stated the new hire would improve the quality of the workforce.

The number of federal employees retiring and the fact that the federal government lost many mid-career federal employees in the early 1990s when the government began to downsize explains why some managers looked beyond federal employee applicants to fill positions. The number of federal employees retiring from federal service is another factor for managers looking outside their current pool of employees. In fiscal year 2004, 55,848 federal employees retired compared to 45,137 in fiscal year 2000, representing a 23 percent increase in a four year period.

New hires indicated that the hiring process can be a deterrent for many considering a position with the federal government. From the time the applicants applied to when they were hired, forty-six percent of the new hires were employed in less than two months; thirty-three percent were hired within three to four months while the remaining newly hired employees waited five or more months.

To view the MSPB report entitled In Search of Highly Skilled Workers: A Study on the Hiring of Upper Level Employees from Outside the Federal Government, visit: http://www.mspb.gov/.

HOUSING DEPARTMENT SECRETARY RESIGNS

The Department ofHousing and Urban Development (HUD) Secretary Alphonso Jackson announced his resignation on March 31, effective April 18, 2008. In a statement released by the agency, Secretary Jackson stated, “There comes a time when one must attend more diligently to personal and family matters. Now is such a time for me.” During his tenure with HUD, Jackson originally served as Deputy Secretary of the department and was later promoted to Secretary. On his watch, HUD played a role in the reconstruction of the Gulf Coast following Hurricane Katrina, which continues to this day.

Secretary Jackson’s departure comes at a time when the agency is one of the key federal departments responsible to address the sub-prime housing debacle that has affected the U.S. and global economy. President Bush issued a statement on March 31, accepting Jackson’s departure, stating, “Laura and I treasure our strong friendship with Secretary Jackson, his wife Marcia, their daughters Annette and Lesley, and their granddaughter Lauren. We wish them all the best.”

Information on Secretary Jackson’s resignation can be found at http://www.hud.gov/ and http://www.whitehouse.gov/.

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GET INVOLVED AT THESE EVENTS!  

PUBLIC SERVICE RECOGNITION WEEK DRAWING NEAR

Public Service Recognition Week, celebrated since 1985, is a time set aside each year to honor the men and women who serve America as federal, state and local government employees. Throughout the nation and around the world, public employees use this week to educate citizens about the many ways in which government serves the public and how those government services make life better for all of us. This year, the celebration runs from May 5 – 11, 2008.

Festivals, open houses, parades, community clean-up days, and fundraising events to benefit charity are just some of the ways that public employees around the country reach out to their communities. There is also the annual celebration on the National Mall in Washington, DC where over 100 federal civilian and military agencies and programs exhibited. During the event, kids are able to meet a NASA astronaut, climb aboard an F-16, take home free buttons, coloring posters, maps and puzzles. Adults take advantage of the celebration by exploring space technology with NASA, searching job databases of government agencies, receiving free health screening tests, and learning about innovations in security and defense. All the while, government employees are on hand to answer questions about what they do and why they have chosen public service careers.

For more information on how to get involved in Public Service Recognition Week, please visit http://www.excelgov.org/.

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Long Term Care Partners, LLC, FMA Corporate Partner.  Long Term Care Partners is the administrator of the Federal Long Term Care Insurance Program.  Sponsored by the U.S. Office of Personnel Management, the Program is available to Federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and their qualified relatives.  With more than 210,000 enrollees, it is the largest employer-sponsored long term care insurance program in the country.  FLTCIP policies are simple to understand and offer enrollees some distinct advantages, including comprehensive coverage, competitive and stable rates, international coverage, and administrative service standards that are the highest in the long-term care insurance industry.  Policies are sold direct through a highly-trained, non-commissioned staff with no high pressure sales tactics – simply sound advice.  Visit www.LTCFEDS.com or http://www.opm.gov/insure/ltc/index.asp for more information.

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Shaw, Bransford, Veilleux and Roth, P.C., (SBVR) concentrates its law practice on the representation of Federal employees, with a special emphasis on the representation of executives and managers.  SBVR serves as General Counsel to the Federal Managers Association and is uniquely situated to recognize the interests and viewpoints of Federal managers.  For up to two free half-hour legal consultations and reduced legal fees as an FMA member, please visit:  www.shawbransford.com.

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The Washington Report is published biweekly by the Federal Managers Association.
Jessica Klement, Editor; FMA Staff Writers.

The Federal Managers Association, established in 1913, is the oldest, largest, most influential association representing the interests of the nearly 200,000 managers, supervisors and executives serving in today’s Federal government.

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